Cover Page
Cover Page - shares | 9 Months Ended | |
Jul. 31, 2019 | Aug. 20, 2019 | |
Cover page. | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jul. 31, 2019 | |
Document Transition Report | false | |
Entity File Number | 001-37483 | |
Entity Registrant Name | HEWLETT PACKARD ENTERPRISE CO | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 47-3298624 | |
Entity Address, Address Line One | 6280 America Center Drive, | |
Entity Address, City or Town | San Jose, | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 95002 | |
City Area Code | (650) | |
Local Phone Number | 687-5817 | |
Title of 12(b) Security | Common stock, par value $0.01 per share | |
Trading Symbol | HPE | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 1,305,601,258 | |
Entity Central Index Key | 0001645590 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --10-31 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Earnings (Unaudited) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2019 | Jul. 31, 2018 | |
Net revenue: | ||||
Financing income | $ 114 | $ 109 | $ 342 | $ 332 |
Total net revenue | 7,217 | 7,764 | 21,920 | 22,906 |
Costs and expenses: | ||||
Financing interest | 74 | 69 | 222 | 207 |
Research and development | 481 | 435 | 1,404 | 1,227 |
Selling, general and administrative | 1,253 | 1,221 | 3,678 | 3,684 |
Amortization of intangible assets | 58 | 72 | 199 | 222 |
Restructuring charges | 0 | (1) | 0 | 14 |
Transformation costs | 170 | 126 | 302 | 491 |
Disaster charges | 0 | 0 | (7) | 0 |
Acquisition, disposition and other related charges | 563 | 24 | 710 | 70 |
Separation costs | 0 | (2) | 0 | 0 |
Total costs and expenses | 7,293 | 7,274 | 21,106 | 21,822 |
(Loss) earnings from continuing operations | (76) | 490 | 814 | 1,084 |
Interest and other, net | (70) | (64) | (139) | (163) |
Tax indemnification adjustments | (134) | 2 | 89 | (1,342) |
Non-service net periodic benefit credit | 12 | 26 | 45 | 90 |
Earnings from equity interests | 3 | 11 | 21 | 23 |
(Loss) earnings from continuing operations before taxes | (265) | 465 | 830 | (308) |
Benefit (provision) for taxes | 238 | (13) | (261) | 3,092 |
Net (loss) earnings from continuing operations | (27) | 452 | 569 | 2,784 |
Net loss from discontinued operations | 0 | (1) | 0 | (119) |
Net (loss) earnings | $ (27) | $ 451 | $ 569 | $ 2,665 |
Basic | ||||
Continuing operations (in dollars per share) | $ (0.02) | $ 0.30 | $ 0.42 | $ 1.79 |
Discontinued operations (in dollars per share) | 0 | 0 | 0 | (0.07) |
Total basic net earnings (loss) per share (in dollars per share) | (0.02) | 0.30 | 0.42 | 1.72 |
Diluted | ||||
Continuing operations (in dollars per share) | (0.02) | 0.29 | 0.41 | 1.76 |
Discontinued operations (in dollars per share) | 0 | 0 | 0 | (0.07) |
Total diluted net earnings (loss) per share (in dollars per share) | (0.02) | 0.29 | 0.41 | 1.69 |
Cash dividends declared per share (in dollars per share) | $ 0.1125 | $ 0.1125 | $ 0.3375 | $ 0.3750 |
Weighted-average shares used to compute net earnings per share: | ||||
Basic (in shares) | 1,334 | 1,513 | 1,367 | 1,552 |
Diluted (in shares) | 1,334 | 1,531 | 1,380 | 1,578 |
Products | ||||
Net revenue: | ||||
Total net revenue | $ 4,508 | $ 4,944 | $ 13,709 | $ 14,414 |
Costs and expenses: | ||||
Cost of products and services | 3,069 | 3,516 | 9,496 | 10,432 |
Services | ||||
Net revenue: | ||||
Total net revenue | 2,595 | 2,711 | 7,869 | 8,160 |
Costs and expenses: | ||||
Cost of products and services | $ 1,625 | $ 1,814 | $ 5,102 | $ 5,475 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2019 | Jul. 31, 2018 | |
Statement of Comprehensive Income [Abstract] | ||||
Net (loss) earnings | $ (27) | $ 451 | $ 569 | $ 2,665 |
Change in net unrealized gains (losses) on available-for-sale securities: | ||||
Net unrealized gains (losses) arising during the period | 3 | (2) | 8 | (1) |
Gains reclassified into earnings | 0 | 0 | (3) | (9) |
Change in net unrealized gains (losses) on available-for-sale securities | 3 | (2) | 5 | (10) |
Change in net unrealized gains (losses) on cash flow hedges: | ||||
Net unrealized gains arising during the period | 63 | 149 | 225 | 50 |
Net (gains) losses reclassified into earnings | (58) | (43) | (259) | 78 |
Change in net unrealized (losses) gains on cash flow hedges | 5 | 106 | (34) | 128 |
Change in unrealized components of defined benefit plans: | ||||
Net unrealized losses arising during the period | (31) | (25) | (78) | (23) |
Amortization of net actuarial loss and prior service benefit | 54 | 47 | 161 | 143 |
Curtailments, settlements and other | 5 | 9 | 12 | 11 |
Change in unrealized components of defined benefit plans | 28 | 31 | 95 | 131 |
Change in cumulative translation adjustment | (8) | (40) | (2) | (40) |
Other comprehensive income before taxes | 28 | 95 | 64 | 209 |
Benefit (provision) for taxes | 2 | (19) | 4 | (34) |
Other comprehensive income, net of taxes | 30 | 76 | 68 | 175 |
Comprehensive income | $ 3 | $ 527 | $ 637 | $ 2,840 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Millions | Jul. 31, 2019 | Oct. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 3,693 | $ 4,880 |
Accounts receivable, net of allowance for doubtful accounts | 2,965 | 3,263 |
Financing receivables | 3,567 | 3,396 |
Inventory | 2,216 | 2,447 |
Assets held for sale | 52 | 6 |
Other current assets | 2,624 | 3,280 |
Total current assets | 15,117 | 17,272 |
Property, plant and equipment | 6,000 | 6,138 |
Long-term financing receivables and other assets | 9,092 | 11,359 |
Investments in equity interests | 2,346 | 2,398 |
Goodwill | 17,587 | 17,537 |
Intangible assets | 618 | 789 |
Total assets | 50,760 | 55,493 |
Current liabilities: | ||
Notes payable and short-term borrowings | 2,207 | 2,005 |
Accounts payable | 5,203 | 6,092 |
Employee compensation and benefits | 1,454 | 1,412 |
Taxes on earnings | 160 | 378 |
Deferred revenue | 3,225 | 3,177 |
Accrued restructuring | 223 | 294 |
Other accrued liabilities | 4,686 | 3,840 |
Total current liabilities | 17,158 | 17,198 |
Long-term debt | 10,453 | 10,136 |
Other non-current liabilities | 5,569 | 6,885 |
Commitments and contingencies | ||
HPE stockholders' equity: | ||
Preferred stock, $0.01 par value (300 shares authorized; none issued and outstanding at July 31, 2019) | 0 | 0 |
Common stock, $0.01 par value (9,600 shares authorized; 1,310 and 1,423 shares issued and outstanding at July 31, 2019 and October 31, 2018, respectively) | 13 | 14 |
Additional paid-in capital | 28,629 | 30,342 |
Accumulated deficit | (7,959) | (5,899) |
Accumulated other comprehensive loss | (3,150) | (3,218) |
Total HPE stockholders' equity | 17,533 | 21,239 |
Non-controlling interests | 47 | 35 |
Total stockholders' equity | 17,580 | 21,274 |
Total liabilities and stockholders' equity | $ 50,760 | $ 55,493 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Jul. 31, 2019 | Oct. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 300,000,000 | 300,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 9,600,000,000 | 9,600,000,000 |
Common stock, shares issued | 1,310,000,000 | 1,423,000,000 |
Common stock, shares outstanding | 1,310,000,000 | 1,423,000,000 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions | 9 Months Ended | |
Jul. 31, 2019 | Jul. 31, 2018 | |
Cash flows from operating activities: | ||
Net earnings | $ 569 | $ 2,665 |
Adjustments to reconcile net earnings to net cash provided by operating activities: | ||
Depreciation and amortization | 1,919 | 1,931 |
Stock-based compensation expense | 207 | 242 |
Provision for inventory and doubtful accounts | 181 | 137 |
Restructuring charges | 146 | 399 |
Deferred taxes on earnings | 885 | (1,215) |
Earnings from equity interests | (21) | (23) |
Dividends received from equity investees | 71 | 47 |
Other, net | 134 | 55 |
Changes in operating assets and liabilities, net of acquisitions: | ||
Accounts receivable | 315 | 137 |
Financing receivables | (325) | (228) |
Inventory | 66 | (545) |
Accounts payable | (826) | 72 |
Taxes on earnings | (1,121) | (2,271) |
Restructuring | (261) | (540) |
Other assets and liabilities | 626 | 775 |
Net cash provided by operating activities | 2,565 | 1,638 |
Cash flows from investing activities: | ||
Investment in property, plant and equipment | (2,153) | (2,129) |
Proceeds from sale of property, plant and equipment | 448 | 561 |
Purchases of available-for-sale securities and other investments | (33) | (32) |
Maturities and sales of available-for-sale securities and other investments | 12 | 96 |
Financial collateral posted | (332) | (1,396) |
Financial collateral returned | 740 | 1,454 |
Payments made in connection with business acquisitions, net of cash acquired | (81) | (207) |
Proceeds from business divestitures, net | 0 | 13 |
Net cash used in investing activities | (1,399) | (1,640) |
Cash flows from financing activities: | ||
Short-term borrowings with original maturities less than 90 days, net | 25 | 84 |
Proceeds from debt, net of issuance costs | 1,010 | 894 |
Payment of debt | (872) | (2,538) |
Net proceeds related to stock-based award activities | 24 | 104 |
Repurchase of common stock | (1,965) | (2,585) |
Cash dividends paid to non-controlling interests | 0 | (9) |
Cash dividends paid | (461) | (406) |
Net cash used in financing activities | (2,239) | (4,341) |
Decrease in cash, cash equivalents and restricted cash | (1,073) | (4,343) |
Cash, cash equivalents and restricted cash at beginning of period | 5,084 | 9,592 |
Cash, cash equivalents and restricted cash at end of period | 4,011 | 5,249 |
Everett SpinCo, Inc. | ||
Cash flows from financing activities: | ||
Net transfer of cash and cash equivalents | 0 | (41) |
Seattle SpinCo, Inc. | ||
Cash flows from financing activities: | ||
Net transfer of cash and cash equivalents | $ 0 | $ 156 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) shares in Thousands, $ in Millions | Total | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Equity Attributable to the Company | Non-controlling Interests | Total Equity | |
Balance at beginning of period (in shares) at Oct. 31, 2017 | 1,595,161 | ||||||||
Balance at beginning of period at Oct. 31, 2017 | $ 16 | $ 33,583 | $ (7,238) | $ (2,895) | $ 23,466 | $ 39 | $ 23,505 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Activity related to separation and merger transactions | 125 | (186) | (61) | (61) | |||||
Net earnings | 2,665 | 2,665 | (3) | 2,662 | |||||
Other comprehensive income | $ 175 | 175 | 175 | 175 | |||||
Comprehensive income | 2,840 | (3) | 2,837 | ||||||
Issuance of common stock in connection with employee stock plans and other (in shares) | 47,491 | ||||||||
Issuance of common stock in connection with employee stock plans and other | $ 1 | 73 | 74 | 74 | |||||
Repurchases of common stock (in shares) | (160,215) | ||||||||
Repurchases of common stock | $ (2) | (2,583) | (2,585) | (2,585) | |||||
Cash dividends declared | (573) | (573) | (573) | ||||||
Stock-based compensation expense | 265 | 265 | 265 | ||||||
Balance at beginning of period (in shares) at Jul. 31, 2018 | 1,482,437 | ||||||||
Balance at end of period at Jul. 31, 2018 | $ 15 | 31,338 | (5,021) | (2,906) | 23,426 | 36 | 23,462 | ||
Balance at beginning of period (in shares) at Apr. 30, 2018 | 1,527,381 | ||||||||
Balance at beginning of period at Apr. 30, 2018 | $ 15 | 32,205 | (5,306) | (2,982) | 23,932 | 34 | 23,966 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Activity related to separation and merger transactions | (1) | (1) | (1) | ||||||
Net earnings | 451 | 451 | 2 | 453 | |||||
Other comprehensive income | $ 76 | 76 | 76 | 76 | |||||
Comprehensive income | 527 | 2 | 529 | ||||||
Issuance of common stock in connection with employee stock plans and other (in shares) | 13,711 | ||||||||
Issuance of common stock in connection with employee stock plans and other | $ 1 | 10 | 11 | 11 | |||||
Repurchases of common stock (in shares) | (58,655) | ||||||||
Repurchases of common stock | $ (1) | (934) | (935) | (935) | |||||
Cash dividends declared | (165) | (165) | (165) | ||||||
Stock-based compensation expense | 57 | 57 | 57 | ||||||
Balance at beginning of period (in shares) at Jul. 31, 2018 | 1,482,437 | ||||||||
Balance at end of period at Jul. 31, 2018 | $ 15 | 31,338 | (5,021) | (2,906) | 23,426 | 36 | 23,462 | ||
Balance at beginning of period (in shares) at Oct. 31, 2018 | 1,423,000 | 1,423,303 | |||||||
Balance at beginning of period at Oct. 31, 2018 | $ 21,274 | $ 14 | 30,342 | (5,899) | (3,218) | 21,239 | 35 | 21,274 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net earnings | 569 | 569 | 12 | 581 | |||||
Other comprehensive income | $ 68 | 68 | 68 | 68 | |||||
Comprehensive income | 637 | 12 | 649 | ||||||
Issuance of common stock in connection with employee stock plans and other (in shares) | 15,404 | ||||||||
Issuance of common stock in connection with employee stock plans and other | 23 | 23 | 23 | ||||||
Repurchases of common stock (in shares) | (128,822) | ||||||||
Repurchases of common stock | $ (1) | (1,945) | (1,946) | (1,946) | |||||
Cash dividends declared | (446) | (446) | (446) | ||||||
Effects of adoption of accounting standard updates | [1] | (2,183) | (2,183) | (2,183) | |||||
Effects of adoption of accounting standard updates | Accounting Standards Update 2016-16 | 2,300 | ||||||||
Effects of adoption of accounting standard updates | Accounting Standards Update 2014-09 | 122 | ||||||||
Stock-based compensation expense | 209 | 209 | 209 | ||||||
Balance at beginning of period (in shares) at Jul. 31, 2019 | 1,310,000 | 1,309,885 | |||||||
Balance at end of period at Jul. 31, 2019 | $ 17,580 | $ 13 | 28,629 | (7,959) | (3,150) | 17,533 | 47 | 17,580 | |
Balance at beginning of period (in shares) at Apr. 30, 2019 | 1,346,232 | ||||||||
Balance at beginning of period at Apr. 30, 2019 | $ 13 | 29,130 | (7,765) | (3,180) | 18,198 | 43 | 18,241 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net earnings | (27) | (27) | 4 | (23) | |||||
Other comprehensive income | $ 30 | 30 | 30 | 30 | |||||
Comprehensive income | 3 | 4 | 7 | ||||||
Issuance of common stock in connection with employee stock plans and other (in shares) | 2,737 | ||||||||
Issuance of common stock in connection with employee stock plans and other | 16 | 16 | 16 | ||||||
Repurchases of common stock (in shares) | (39,084) | ||||||||
Repurchases of common stock | (575) | (575) | (575) | ||||||
Cash dividends declared | (146) | (146) | (146) | ||||||
Effects of adoption of accounting standard updates | [2] | (21) | (21) | (21) | |||||
Stock-based compensation expense | 58 | 58 | 58 | ||||||
Balance at beginning of period (in shares) at Jul. 31, 2019 | 1,310,000 | 1,309,885 | |||||||
Balance at end of period at Jul. 31, 2019 | $ 17,580 | $ 13 | $ 28,629 | $ (7,959) | $ (3,150) | $ 17,533 | $ 47 | $ 17,580 | |
[1] | For the nine months ended July 31, 2019 , includes $ 2.3 billion related to an addition to accumulated deficit as a result of the adoption of an accounting standard update for Income Taxes and $ 122 million related to a reduction to accumulated deficit as a result of the adoption of the new revenue accounting standard. | ||||||||
[2] | For the three months ended July 31, 2019 , includes an adjustment related to the adoption of the new revenue accounting standard, which the Company adopted in the first quarter of fiscal 2019. |
Overview and Basis of Presentat
Overview and Basis of Presentation | 9 Months Ended |
Jul. 31, 2019 | |
Accounting Policies [Abstract] | |
Overview and Summary of Significant Accounting Policies | Overview and Summary of Significant Accounting Policies Background Hewlett Packard Enterprise Company ("Hewlett Packard Enterprise", "HPE", or the "Company") is a global technology leader focused on developing intelligent solutions that allow customers to capture, analyze and act upon data seamlessly from edge to cloud. Hewlett Packard Enterprise enables customers to accelerate business outcomes by driving new business models, creating new customer and employee experiences, and increasing operational efficiency today and into the future. Hewlett Packard Enterprise's customers range from small- and medium-sized businesses ("SMBs") to large global enterprises. On November 1, 2015, the Company became an independent publicly-traded company through a pro rata distribution by HP Inc. ("former Parent" or "HPI"), formerly known as Hewlett-Packard Company, of 100% of the outstanding shares of Hewlett Packard Enterprise Company to HP Inc.'s stockholders (the "Separation"). Discontinued Operations On April 1, 2017, HPE completed the separation and merger of its Enterprise Services business with Computer Sciences Corporation ("CSC") (collectively, the "Everett Transaction"). HPE transferred its Enterprise Services business to Everett SpinCo, Inc. (a wholly-owned subsidiary of HPE) ("Everett") and distributed all of the shares of Everett to HPE stockholders. Following the distribution, New Everett Merger Sub Inc., a wholly-owned subsidiary of Everett, merged with and into CSC and Everett changed its name to DXC Technology Company ("DXC"). On September 1, 2017, the Company completed the separation and merger of its Software business segment with Micro Focus International plc (“Micro Focus”) (collectively, the “Seattle Transaction”). HPE transferred its Software business segment to Seattle SpinCo, Inc. (a wholly-owned subsidiary of HPE) ("Seattle"), and distributed all of the shares of Seattle to HPE stockholders. Following the share distribution, Seattle MergerSub, Inc., an indirect, wholly-owned subsidiary of Micro Focus, merged with and into Seattle. The historical financial results of Everett and Seattle are reported as Net loss from discontinued operations in the Condensed Consolidated Statements of Earnings. For the three and nine months ended July 31, 2018 , this amount totaled $1 million and $119 million , respectively which primarily consisted of tax indemnification adjustments and separation costs. Acquisition On May 16, 2019, the Company entered into a definitive agreement to acquire Cray Inc. ("Cray"), a global supercomputer leader, for $35 per share in cash, in a transaction valued at approximately $1.3 billion , net of cash acquired. The transaction is expected to close by the fourth quarter of HPE’s fiscal year 2019, subject to regulatory approvals and other customary closing conditions. Cray's results of operations will be included within the Hybrid IT segment. Arbitration Settlement On August 15, 2019, an arbitration panel awarded DXC $666 million as well as post-award interest at 3% per annum compounding quarterly until payment. The panel award was made pursuant to a binding arbitration arising from a previously disclosed dispute under the separation and distribution agreement between DXC and HPE. As of July 31, 2019 , the Company had recorded a charge representing the full award settlement in its condensed consolidated financial statements. For more information, see Note 15, "Litigation and Contingencies". Basis of Presentation These Condensed Consolidated Financial Statements of the Company were prepared in accordance with United States ("U.S.") Generally Accepted Accounting Principles ("GAAP"). In the opinion of management, the accompanying unaudited Condensed Consolidated Financial Statements of Hewlett Packard Enterprise contain all adjustments, including normal recurring adjustments, necessary to present fairly the Company's financial position as of July 31, 2019 and October 31, 2018 , its results of operations for the three and nine months ended July 31, 2019 and 2018 , its cash flows for the nine months ended July 31, 2019 and 2018 , and its statements of stockholders equity for the three and nine months ended July 31, 2019 and 2018 . The results of operations for the three and nine months ended July 31, 2019 and its cash flows for the nine months ended July 31, 2019 are not necessarily indicative of the results to be expected for the full year. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with the Company's Annual Report on Form 10-K for the fiscal year ended October 31, 2018 , including "Management's Discussion and Analysis of Financial Condition and Results of Operations", "Quantitative and Qualitative Disclosures About Market Risk" and the Consolidated Financial Statements and notes thereto included in Items 7, 7A and 8, respectively, included therein. Principles of Consolidation The accompanying unaudited Condensed Consolidated Financial Statements include the accounts of the Company and all subsidiaries and affiliates in which the Company has a controlling financial interest or is the primary beneficiary. All intercompany transactions and accounts within the consolidated businesses of the Company have been eliminated. The Company accounts for investments in companies over which it has the ability to exercise significant influence but does not hold a controlling interest under the equity method of accounting, and the Company records its proportionate share of income or losses in Earnings (loss) from equity interests in the Condensed Consolidated Statements of Earnings. Non-controlling interests are presented as a separate component within Total stockholders' equity in the Condensed Consolidated Balance Sheets. Net earnings attributable to non-controlling interests are recorded within Interest and other, net in the Condensed Consolidated Statements of Earnings and are not presented separately, as they were not material for any period presented. Segment Realignment and Reclassifications See Note 2, "Segment Information", for a discussion of the Company's segment realignment. 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 the Company's Condensed Consolidated Financial Statements and accompanying notes. Actual results could differ materially from those estimates. Revenue Recognition General As a result of adopting the new revenue recognition standard ("ASC 606"), the Company now accounts for a contract with a customer when both parties have provided written approval and are committed to perform, each party’s rights including payment terms are identified, the contract has commercial substance, and collection of consideration is probable. The Company enters into contracts with customers that may include combinations of products and services, resulting in arrangements containing multiple performance obligations for hardware and software products and/or various services. The Company determines whether each product or service is distinct in order to identify the performance obligations in the contract and allocate the contract transaction price among the distinct performance obligations. Arrangements are distinct based on whether the customer can benefit from the product or service on its own or together with other resources that are readily available and whether the commitment to transfer the product or service to the customer is separately identifiable from other obligations in the contract. The Company classifies its hardware, perpetual software licenses, and software-as-a-service ("SaaS") as distinct performance obligations. Term software licenses represent multiple obligations, which include software licenses and software maintenance. In transactions where the Company delivers hardware or software, it is typically the principal and records revenue and costs of goods sold on a gross basis. Revenue is recognized when, or as, control of promised products or services is transferred to the customer in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those products or services. Variable consideration offered in contracts with customers, partners and distributors may include rebates, volume-based discounts, cooperative marketing, price protection, and other incentive programs. Variable consideration is estimated at contract inception and updated at the end of each reporting period as additional information becomes available and recognized only to the extent that it is probable that a significant reversal of any incremental revenue will not occur. Transfer of control occurs once the customer has the contractual right to use the product, generally upon shipment or once delivery and risk of loss has transferred to the customer. Transfer of control can also occur over time for maintenance and services as the customer receives the benefit over the contract term. The Company's hardware and perpetual software licenses are distinct performance obligations where revenue is recognized upfront upon transfer of control. Term software licenses include multiple performance obligations where the term licenses are recognized upfront upon transfer of control, with the associated software maintenance revenue recognized ratably over the contract term as services and software updates are provided. SaaS arrangements have one distinct performance obligation which is satisfied over time with revenue recognized ratably over the contract term as the customer consumes the services. On its product sales, the Company records consideration from shipping and handling on a gross basis within net product sales. Revenue is recorded net of any associated sales taxes. Significant Judgments The Company allocates the transaction price for the contract among the performance obligations on a relative standalone selling price basis. The standalone selling price ("SSP") is the price at which an entity would sell a promised product or service separately to a customer. The Company establishes SSP for most of its products and services based on the observable price of the products or services when sold separately in similar circumstances to similar customers. When the SSP is not directly observable, the Company estimates SSP based on management judgment by considering available data such as internal margin objectives, pricing strategies, market/competitive conditions, historical profitability data, as well as other observable inputs. The Company establishes SSP ranges for its products and services and reassesses them periodically. Judgment is applied in determining the transaction price as the Company may be required to estimate variable consideration when determining the amount of revenue to recognize. Variable consideration may include various rebates, volume-based discounts, cooperative marketing, price protection, and other incentive programs that are offered to customers, partners and distributors. When determining the amount of revenue to recognize, the Company estimates the expected usage of these programs, applying the expected value or most likely estimate and updates the estimate at each reporting period as actual utilization becomes available. The Company also considers the customers' right of return in determining the transaction price, where applicable. Contract Balances Accounts receivable and contract assets A receivable is a right to consideration in exchange for products or services the Company has transferred to a customer that is unconditional. A contract asset is a right to consideration in exchange for products or services transferred to a customer that is conditional on something other than the passage of time. A receivable is recorded when the right to consideration becomes unconditional. The Company’s contract assets include unbilled receivables which are recorded when the Company recognizes revenue in advance of billings. Unbilled receivables generally relate to services contracts where a service has been performed and control has transferred, but invoicing to the customer is subject to future milestone billings or other contractual payment schedules. The Company classifies unbilled receivables as Accounts receivable. Contract liabilities A contract liability is an obligation to transfer products or services to a customer for which the entity has received consideration, or the amount is due, from the customer. The Company’s contract liabilities primarily consist of deferred revenue. Deferred revenue is recorded when amounts invoiced to customers are in excess of revenue that can be recognized because performance obligations have not been satisfied and control of the promised products or services has not transferred to the customer. Deferred revenue largely represents amounts invoiced in advance for product (hardware/software) support contracts, consulting projects and product sales where revenue cannot be recognized yet. Costs to obtain a contract with a customer The Company capitalizes the incremental costs of obtaining a contract with a customer, primarily sales commissions, if the Company expects to recover those costs. The Company has elected, as a practical expedient, to expense the costs of obtaining a contract as incurred for contracts with terms of one year or less. The typical amortization periods used range from three to six years . The Company periodically reviews the capitalized sales commission costs for possible impairment losses. Capitalized sales commission costs are included in Other current assets and Long-term financing receivables and other assets, and the related amortization expense is included in Selling, general and administrative expense. Recent Tax Legislation On December 22, 2017, the Tax Cuts and Jobs Act (the “Tax Act”) was enacted into law. The Tax Act included significant changes to the U.S. corporate income tax structure, including a federal corporate rate reduction from 35% to 21% effective January 1, 2018, limitations on the deductibility of interest expense and executive compensation, creation of new minimum taxes such as the Base Erosion Anti-abuse Tax (“BEAT”) and the Global Intangible Low Taxed Income (“GILTI”) tax and the transition of U.S. international taxation from a worldwide tax system to a modified territorial tax system, which resulted in a one-time U.S. tax liability on those earnings which had not previously been repatriated to the U.S. (the “Transition Tax”). In December 2017, the U.S. Securities and Exchange Commission ("SEC") issued Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act ("SAB 118"), which allowed the Company to record provisional amounts during a measurement period not to extend beyond one year of the enactment date, which for the Company ended in the first quarter of fiscal 2019. In accordance with SAB 118, the accounting for the tax effects of the Tax Act was completed based on currently available legislative updates relating to the Tax Act. The Company has elected to treat taxes due on future GILTI inclusions in U.S. taxable income as a current period expense when incurred. For further details, see Note 6, "Taxes on Earnings". Recently Adopted Accounting Pronouncements In March 2017, the Financial Accounting Standards Board ("FASB") amended the existing accounting standards for retirement benefits. The amendments require the presentation of the service cost component of net periodic benefit cost in the same income statement line items as other employee compensation costs, unless eligible for capitalization. The other components of net periodic benefit costs will be presented separately from the service cost as non-operating costs. Effective at the beginning of the first quarter of fiscal 2019, in connection with the adoption of the accounting standards update for retirement benefits, the Company reflected these changes retrospectively by transferring its non-service net periodic benefit (credit) cost from operating expense to Other (income) and expense in its Condensed Consolidated Statements of Earnings. The net periodic benefit (credit) cost transferred to Other (income) and expense during the three and nine months ended July 31, 2018 were as follows. Refer to Note 5, “Retirement and Post-Retirement Benefit Plans” for additional information. Three Months Ended Nine Months Ended In millions Cost of products and services $ (14 ) $ (42 ) Research and development (1 ) (3 ) Selling, general and administrative (19 ) (53 ) Restructuring charges and transformation costs 8 8 $ (26 ) $ (90 ) In November 2016, the FASB amended the existing accounting standards for the classification and presentation of restricted cash in the statement of cash flows. The Company adopted the guidance in the first quarter of fiscal 2019, beginning November 1, 2018, using the retrospective method. As a result of adopting this accounting standards update, for the nine months ended July 31, 2018 , the Company included $43 million of restricted cash movement during the period, which was previously reported within cash used in investing activities, and is now reported within Decrease in cash, cash equivalents and restricted cash in the Company's Condensed Consolidated Statement of Cash Flows. In October 2016, the FASB amended the existing accounting standards for income taxes. The amendments require the recognition of the income tax consequences for intra-entity transfers of assets other than inventory when the transfer occurs. Prior to the amendments, current and deferred income taxes for intra-entity asset transfers were not recognized until the asset was sold to an outside party or amortized over time. The Company adopted the guidance in the first quarter of fiscal 2019, beginning November 1, 2018, using the modified retrospective method. The Company recognized $2.3 billion of income taxes as an adjustment to retained earnings in the first nine months of fiscal 2019, which was previously reported as prepaid income taxes and deferred tax assets within Corporate and unallocated assets in the Company's allocation of segment assets. In August 2016, the FASB amended the existing accounting standards for the statement of cash flows. The amendments provide guidance on eight classification issues related to the statement of cash flows. The Company adopted the guidance in the first quarter of fiscal 2019, beginning November 1, 2018, using the retrospective method. For issues that are impracticable to apply retrospectively, the amendments may be applied prospectively as of the earliest date practicable. The application of this accounting standards update did not have an impact on the Condensed Consolidated Statements of Cash Flows. In January 2016, the FASB issued guidance that requires equity investments with readily determinable fair values (other than those accounted for under the equity method or those that result in consolidation of the investee) to be measured at fair value and recognize any changes in fair value in net income. For equity investments without readily determinable fair values, the Company has elected to apply the measurement alternative, under which investments are measured at cost, less impairment, and adjusted for qualifying observable price changes on a prospective basis. The Company adopted the guidance effective November 1, 2018, and there was no impact on the Condensed Consolidated Financial Statements upon adoption. In May 2014, the FASB amended the existing accounting standards for revenue recognition. The Company adopted the new revenue standard in the first quarter of fiscal 2019 using the modified retrospective method of transition applied to contracts that were not completed as of November 1, 2018. Results and related disclosures for the reporting periods beginning after November 1, 2018 are presented under the new revenue standard, while comparative prior period results and related disclosures are not adjusted and continue to be reported in accordance with the historic accounting standard. Refer to the Revenue Recognition section above for accounting policy updates upon the adoption of the new revenue standard, and Note 7, "Balance Sheet Details" for further discussion on the impact of adoption. For disaggregation of revenue, see Note 2, "Segment Information". The following table summarizes the effects of adopting the new revenue standard at November 1, 2018 on the Condensed Consolidated Balance Sheets as an adjustment to the opening balance: Historical Accounting Effect of Adoption As Adjusted In millions Assets Accounts receivable $ 3,263 $ 38 $ 3,301 Inventory 2,447 (14) 2,433 Other current assets 3,280 50 3,330 Long-term financing receivables and other assets 11,359 44 11,403 Subtotal assets $ 20,349 $ 118 $ 20,467 Liabilities Taxes on earnings $ 378 $ 10 $ 388 Deferred revenue 3,177 (36) 3,141 Other accrued liabilities (1) 3,840 52 3,892 Other non-current liabilities 6,885 (30) 6,855 Subtotal liabilities $ 14,280 $ (4 ) $ 14,276 Stockholders' equity Accumulated deficit (1) $ (5,899 ) $ 122 $ (5,777 ) Subtotal stockholders' equity $ (5,899 ) $ 122 $ (5,777 ) Subtotal liabilities and stockholders' equity $ 8,381 $ 118 $ 8,499 (1) Includes an adjustment related to the adoption of ASC 606 that was recorded during the third quarter of fiscal 2019. The application of ASC 606 increased the Company's total net revenue by $ 23 million and $ 41 million for the three and nine months ended July 31, 2019 , respectively, and did not have a material impact to the Company's cost of sales or operating expenses for the three or nine months ended July 31, 2019. As of July 31, 2019, the balance sheet changes attributable to the impact of ASC 606 were immaterial. Recently Enacted Accounting Pronouncements In August 2018, the FASB issued guidance on a customer's accounting for implementation costs incurred in cloud-computing arrangements that are hosted by a vendor. Certain types of implementation costs should be capitalized and amortized over the term of the hosting arrangement. The Company is required to adopt the guidance in the first quarter of fiscal 2021. Early adoption is permitted. The Company is currently evaluating the timing and the impact of these amendments on its Condensed Consolidated Financial Statements. In August 2018, the FASB issued guidance which changes the disclosure requirements for fair value measurements and defined benefit plans. The Company is required to adopt the guidance in the first quarter of fiscal 2021. Early adoption is permitted. As the guidance represents a change to disclosure only, the Company does not expect the guidance to have a material impact on its Condensed Consolidated Financial Statements. In February 2018, the FASB issued guidance that allows companies to reclassify stranded tax effects resulting from the Tax Act, from accumulated other comprehensive income to retained earnings. The guidance also requires certain new disclosures regardless of the election. The Company is required to adopt the guidance in the first quarter of fiscal 2020. Early adoption is permitted. The Company is currently evaluating the timing and the impact of these amendments on its Condensed Consolidated Financial Statements. In August 2017, the FASB amended the existing accounting standards for hedge accounting. The amendments expand an entity’s ability to hedge non-financial and financial risk components and reduce complexity in fair value hedges of interest rate risk. The new guidance eliminates the requirement to separately measure and report hedge ineffectiveness and requires the entire change in the fair value of a hedging instrument to be presented in the same income statement line as the hedged item. The guidance also simplifies certain documentation and assessment requirements and modifies the accounting for components excluded from the assessment of hedge effectiveness. In April 2019, the FASB issued certain clarifications to address partial term fair value hedges, fair value hedge basis adjustments and certain transition requirements. The Company is required to adopt the guidance in the first quarter of fiscal 2020. Early adoption is permitted. The Company is currently evaluating the timing and the impact of these amendments on its Condensed Consolidated Financial Statements. In June 2016, the FASB amended the existing accounting standards for the measurement of credit losses. The amendments require an entity to estimate its lifetime expected credit loss for most financial instruments, including trade and lease receivables, and record an allowance for the portion of the amortized cost the entity does not expect to collect. The estimate of expected credit losses should consider historical information, current information, and reasonable and supportable forecasts, including estimates of prepayments. In April 2019, the FASB further clarified the scope of the credit losses standard and addressed issues related to accrued interest receivable balances, recoveries, variable interest rates and prepayment. In May 2019, the FASB issued further guidance to provide entities with an option to irrevocably elect the fair value option applied on an instrument-by-instrument basis for eligible financial instruments. The Company is required to adopt the guidance in the first quarter of fiscal 2021. Early adoption is permitted beginning in fiscal 2020. The Company is currently evaluating the timing and the impact of these amendments on its Condensed Consolidated Financial Statements. The FASB issued guidance in February 2016, with amendments in 2018 and 2019, which changes the accounting standards for leases. The amendments require lessees to record, at lease inception, a lease liability for the obligation to make lease payments and a right-of-use ("ROU") asset for the right to use the underlying asset for the lease term on their balance sheets. Lessees may elect to not recognize lease liabilities and ROU assets for most leases with terms of 12 months or less. The lease liability is measured at the present value of the lease payments over the lease term. The ROU asset will be based on the liability, adjusted for lease prepayments, lease incentives received, and the lessee's initial direct costs. For finance leases, lease expense will be the sum of interest on the lease obligation and amortization of the ROU asset, resulting in a front-loaded expense pattern. For operating leases, lease expense will generally be recognized on a straight-line basis over the lease term. The amended lessor accounting model is similar to the current model, updated to align with certain changes to the lessee model and the new revenue standard. The current sale-leaseback guidance, including guidance applicable to real estate, is also replaced with a new model for both lessees and lessors. The Company plans to adopt the guidance in the first quarter of fiscal 2020, beginning November 1, 2019, using the transition method whereby prior comparative periods will not be retrospectively presented in the Consolidated Financial Statements. The Company is currently evaluating the impact of these amendments and other available practical expedients on its Condensed Consolidated Financial Statements. In April 2019, the FASB amended its standards on recognizing and measuring financial instruments to address the scope of the guidance, the requirement for remeasurement when using the measurement alternative and certain disclosure requirements. The Company is required to adopt the guidance in the first quarter of fiscal 2021. Early adoption is permitted. The Company is currently evaluating the timing and the impact of these amendments on its Condensed Consolidated Financial Statements. There have been no other significant changes to the Company's accounting policies or recently adopted or enacted accounting pronouncements disclosed in the Company's Annual Report on Form 10-K for the fiscal year ended October 31, 2018 . |
Segment Information
Segment Information | 9 Months Ended |
Jul. 31, 2019 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information Hewlett Packard Enterprise's operations are organized into four segments for financial reporting purposes: Hybrid IT, Intelligent Edge, Financial Services ("FS"), and Corporate Investments. Hewlett Packard Enterprise's organizational structure is based on a number of factors that the Chief Operating Decision Maker ("CODM"), who is the Chief Executive Officer ("CEO"), uses to evaluate, view and run its 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 Hewlett Packard Enterprise's management to evaluate segment results. A summary description of each segment follows. Hybrid IT provides a broad portfolio of services-led and software-enabled infrastructure and solutions including secure, software-defined servers, and storage and HPE Pointnext services, thereby combining HPE's hardware, software and services capabilities to make Hybrid IT simple for its customers. Described below are the business unit capabilities within Hybrid IT. • Hybrid IT Product includes Compute and Storage. ◦ Compute. To address the full array of our customers' computing needs, HPE's compute portfolio offers both Industry Standard Servers ("ISS"), which are general purpose servers for multi-workload computing, as well as Mission-Critical Servers ("MCS"), which are servers optimized for particular workloads. HPE's general purpose servers include HPE ProLiant, secure and versatile rack and tower servers; HPE BladeSystem, a modular infrastructure that converges server, storage and networking; and HPE Synergy, a composable infrastructure for traditional and cloud-native applications. The Company's workload optimized server portfolio includes HPE Apollo for high performance computing and artificial intelligence, HPE Cloudline for cloud data centers, HPE Edgeline for computing at the network edge, HPE Integrity for mission-critical applications, and HPE SimpliVity, a hyperconverged infrastructure for virtualized workloads. ◦ Storage. With storage offerings that are AI-driven and built for cloud environments, HPE provides the right workload optimized destinations for data. Powered by HPE InfoSight advanced analytics and machine learning and HPE Cloud Volumes data mobility, HPE delivers intelligent storage for hybrid cloud environments so that customers can unlock data's full potential and derive business insights. Key solutions include HPE 3PAR Storage and HPE Nimble Storage all-flash arrays for mission critical workloads and general purpose workloads, respectively, and big data solutions running on HPE Apollo Servers. Storage also provides comprehensive data protection with HPE StoreOnce and HPE Recovery Manager Central, solutions for secondary workloads and traditional tape, storage networking and disk products, such as HPE MSA and HPE XP. • HPE Pointnext creates preferred IT experiences that power the digital business. The HPE Pointnext team and the Company's extensive partner network provide value across the IT life cycle delivering advice, transformation projects, professional services, support services and operational services for Hybrid IT. HPE Pointnext is also a provider of on-premises flexible consumption models, such as HPE GreenLake, that enable IT agility, simplify operations and align cost to business value. HPE Pointnext offerings include Operational Services, and Advisory and Professional Services. The Intelligent Edge business is comprised of enterprise networking and security solutions for businesses of any size, offering secure connectivity for campus and branch environments, operating under the Aruba brand. The primary business drivers for Intelligent Edge solutions are mobility and the Internet of Things ("IoT"). • HPE Aruba Product includes wired and wireless local area network hardware products such as Wi-Fi access points, switches, routers, sensors, and software products that include network management, network access control, analytics and assurance, and location services software. • HPE Aruba Services offers professional and support services for the Intelligent Edge portfolio of products. Financial Services provides flexible investment solutions, such as leasing, financing, IT consumption, and utility programs and asset management services, for customers that facilitate unique technology deployment models and the acquisition of complete IT solutions, including hardware, software and services from Hewlett Packard Enterprise and others. In order to provide flexible services and capabilities that support the entire IT life cycle, FS partners with customers globally to help build investment strategies that enhance their business agility and support their business transformation. FS offers a wide selection of investment solution capabilities for large enterprise customers and channel partners, along with an array of financial options to SMBs and educational and governmental entities. Corporate Investments includes Hewlett Packard Labs, Communications and Media Solutions ("CMS"), and certain business incubation projects. Segment Policy There have been no significant changes to the Company's segment accounting policies disclosed in the Company's Annual Report on Form 10-K for the fiscal year ended October 31, 2018 , except as described in the 'Segment Realignment' section below. Hewlett Packard Enterprise does not allocate to its segments certain operating expenses, which it manages at the corporate level. These unallocated costs include certain corporate costs and eliminations, stock-based compensation expense related to corporate and certain global functions, acquisition, disposition and other related charges, transformation costs, amortization of intangible assets, restructuring charges, disaster charges and separation costs. Segment Realignment Effective at the beginning of the first quarter of fiscal 2019, the Company implemented organizational changes to align its segment financial reporting more closely with its current business structure. These organizational changes primarily include: (i) the transfer of the data center networking ("DC Networking") business, which was previously reported within the Hybrid IT Product business unit in the Hybrid IT segment, to the HPE Aruba Product and HPE Aruba Services business units within the Intelligent Edge segment; (ii) the transfer of the edge compute business, which was previously reported within the HPE Aruba Product business unit in the Intelligent Edge segment, to the Hybrid IT Product business unit within the Hybrid IT segment; and (iii) the transfer of the CMS business, which was previously reported within the HPE Pointnext business unit in the Hybrid IT segment, to the Corporate Investments segment. The Company reflected these changes to its segment information retrospectively to the earliest period presented, which primarily resulted in the transfer of net revenue and operating profit for each of the businesses as described above. These changes had no impact on Hewlett Packard Enterprise's previously reported consolidated net revenue, earnings from operations, net earnings or net earnings per share ("EPS"). Segment Operating Results Hybrid IT Intelligent Edge Financial Corporate Total In millions Three months ended July 31, 2019 Net revenue $ 5,444 $ 758 $ 885 $ 130 $ 7,217 Intersegment net revenue and other 105 4 3 — 112 Total segment net revenue $ 5,549 $ 762 $ 888 $ 130 $ 7,329 Segment earnings (loss) from operations $ 704 $ 37 $ 77 $ (25 ) $ 793 Three months ended July 31, 2018 Net revenue $ 5,925 $ 783 $ 922 $ 134 $ 7,764 Intersegment net revenue and other 184 2 6 — 192 Total segment net revenue $ 6,109 $ 785 $ 928 $ 134 $ 7,956 Segment earnings (loss) from operations $ 624 $ 101 $ 72 $ (25 ) $ 772 Nine months ended July 31, 2019 Net revenue $ 16,745 $ 2,107 $ 2,695 $ 373 $ 21,920 Intersegment net revenue and other 410 7 8 — 425 Total segment net revenue $ 17,155 $ 2,114 $ 2,703 $ 373 $ 22,345 Segment earnings (loss) from operations $ 2,024 $ 66 $ 231 $ (82 ) $ 2,239 Nine months ended July 31, 2018 Net revenue $ 17,649 $ 2,132 $ 2,721 $ 404 $ 22,906 Intersegment net revenue and other 511 15 11 — 537 Total segment net revenue $ 18,160 $ 2,147 $ 2,732 $ 404 $ 23,443 Segment earnings (loss) from operations $ 1,787 $ 191 $ 215 $ (79 ) $ 2,114 The reconciliation of segment operating results to Hewlett Packard Enterprise condensed consolidated results was as follows: Three Months Ended Nine Months Ended 2019 2018 2019 2018 In millions Net Revenue: Total segments $ 7,329 $ 7,956 $ 22,345 $ 23,443 Eliminations of intersegment net revenue and other (112 ) (192 ) (425 ) (537 ) Total Hewlett Packard Enterprise condensed consolidated net revenue $ 7,217 $ 7,764 $ 21,920 $ 22,906 Earnings before taxes: Total segment earnings from operations $ 793 $ 772 $ 2,239 $ 2,114 Unallocated corporate costs and eliminations (65 ) (49 ) (179 ) (169 ) Unallocated stock-based compensation expense (13 ) (14 ) (42 ) (64 ) Amortization of intangible assets (58 ) (72 ) (199 ) (222 ) Restructuring charges — 1 — (14 ) Transformation costs (170 ) (126 ) (302 ) (491 ) Disaster charges — — 7 — Acquisition, disposition and other related charges (563 ) (24 ) (710 ) (70 ) Separation costs — 2 — — Interest and other, net (70 ) (64 ) (139 ) (163 ) Tax indemnification adjustments (134 ) 2 89 (1,342 ) Non-service net periodic benefit credit 12 26 45 90 Earnings from equity interests 3 11 21 23 Total Hewlett Packard Enterprise condensed consolidated (loss) earnings from continuing operations before taxes $ (265 ) $ 465 $ 830 $ (308 ) Net revenue by segment and business unit was as follows: Three Months Ended Nine Months Ended 2019 2018 2019 2018 In millions Hybrid IT Hybrid IT Product Compute $ 3,151 $ 3,569 $ 9,646 $ 10,350 Storage 844 887 2,761 2,747 Total Hybrid IT Product 3,995 4,456 12,407 13,097 HPE Pointnext 1,554 1,653 4,748 5,063 Total Hybrid IT 5,549 6,109 17,155 18,160 Intelligent Edge HPE Aruba Product 668 703 1,842 1,914 HPE Aruba Services 94 82 272 233 Total Intelligent Edge 762 785 2,114 2,147 Financial Services 888 928 2,703 2,732 Corporate Investments 130 134 373 404 Total segment net revenue 7,329 7,956 22,345 23,443 Eliminations of intersegment net revenue and other (112 ) (192 ) (425 ) (537 ) Total Hewlett Packard Enterprise condensed consolidated net revenue (1) $ 7,217 $ 7,764 $ 21,920 $ 22,906 (1) Revenue from leasing arrangements within Financial Services and Eliminations of intersegment net revenue and other are not subject to the new revenue standard. The Company’s net revenue by geographic regions was as follows: Three Months Ended July 31, Nine Months Ended July 31, 2019 2018 2019 2018 In millions Americas $ 2,910 $ 3,153 $ 8,582 $ 9,053 Europe, Middle East and Africa 2,614 2,783 8,251 8,407 Asia Pacific and Japan 1,693 1,828 5,087 5,446 Total Hewlett Packard Enterprise condensed consolidated net revenue (1) $ 7,217 $ 7,764 $ 21,920 $ 22,906 (1) Revenue from leasing arrangements within Financial Services and Eliminations of intersegment net revenue and other are not subject to the new revenue standard. |
Restructuring
Restructuring | 9 Months Ended |
Jul. 31, 2019 | |
Restructuring and Related Activities [Abstract] | |
Restructuring | Restructuring Summary of Restructuring Plans On September 14, 2015, former Parent's Board of Directors approved a restructuring plan (the "2015 Plan") in connection with the Separation. On May 23, 2012, former Parent adopted a multi-year restructuring plan (the "2012 Plan") designed to simplify business processes, accelerate innovation and deliver better results for customers, employees and stockholders. As of October 31, 2018, the 2015 and 2012 Plans were complete. Restructuring Activity In connection with the 2015 and 2012 Plans, a restructuring credit of $1 million and restructuring charges of $14 million were recorded by the Company for the three and nine months ended July 31, 2018 , respectively, based on restructuring activities impacting the Company's employees and infrastructure. For details on restructuring charges related to HPE Next, see Note 4, "HPE Next". Restructuring activities related to the Company's employees and infrastructure for the 2015 and 2012 Plans are presented in the table below: 2015 Plan 2012 Plan Employee Severance Infrastructure and other Employee Severance and EER Infrastructure and other Total In millions Liability as of October 31, 2018 $ 62 $ 10 $ 11 $ 1 $ 84 Cash payments (25 ) (2 ) (5 ) — (32 ) Liability as of July 31, 2019 $ 37 $ 8 $ 6 $ 1 $ 52 Total costs incurred to date, as of July 31, 2019 $ 751 $ 78 $ 1,268 $ 145 $ 2,242 Total costs expected to be incurred, as of July 31, 2019 $ 751 $ 78 $ 1,268 $ 145 $ 2,242 The current restructuring liabilities related to the plans in the table above, reported in Accrued restructuring in the Condensed Consolidated Balance Sheets at July 31, 2019 and October 31, 2018 , were $33 million and $53 million , respectively. The non-current restructuring liabilities related to the plans in the table above, reported in Other non-current liabilities in the Condensed Consolidated Balance Sheets at July 31, 2019 and October 31, 2018 , were $19 million and $31 million , respectively. Transformation Costs The HPE Next initiative is expected to be implemented through fiscal 2020, during which time the Company expects to incur expenses for workforce reductions, to upgrade and simplify its IT infrastructure, and for other non-labor actions. These costs will be partially offset by proceeds received from real estate sales. In association with the HPE Next initiative, during the three and nine months ended July 31, 2019 , the Company incurred $172 million and $310 million of net charges, of which $170 million and $302 million were recorded within Transformation costs, and $2 million and $8 million were recorded within Non-service net periodic benefit credit in the Condensed Consolidated Statements of Earnings, respectively. During the three and nine months ended July 31, 2018, the Company incurred $131 million and $499 million of net charges, of which $126 million and $491 million were recorded within Transformation costs, and $5 million and $8 million were recorded within Non-service net periodic benefit credit, in the Condensed Consolidated Statements of Earnings, respectively. Three months ended July 31, Nine months ended July 31, 2019 2018 2019 2018 In millions Program management (1) $ 3 $ 28 $ 23 $ 82 IT costs 41 38 94 107 Restructuring charges (2) 92 129 143 385 Loss (gain) on real estate sales 8 (77 ) 1 (114 ) Impairment on real estate assets 19 — 19 — Other (3) 9 13 30 39 Total $ 172 $ 131 $ 310 $ 499 (1) Primarily consists of consulting fees and other direct costs attributable to the design and implementation of the HPE Next initiative. (2) For the three and nine months ended July 31, 2019 and 2018, a portion of these costs were recorded in Non-service net periodic benefit credit in the Condensed Consolidated Statements of Earnings as described above. (3) Primarily consists of site relocation costs in connection with the HPE Next initiative. Restructuring Plan On October 16, 2017, the Company's Board of Directors approved a restructuring plan in connection with the HPE Next initiative (the "HPE Next Plan") and on September 20, 2018, the Company's Board of Directors approved a revision to that restructuring plan. As a result of the revision to the plan, cost amounts and total headcount exits were revised and the completion of the workforce reductions was extended to fiscal 2020. The changes to the workforce will vary by country, based on business needs, local legal requirements and consultations with employee work councils and other employee representatives, as appropriate. Employee Infrastructure In millions Liability as of October 31, 2018 $ 291 $ 33 Charges 115 28 Cash payments (209 ) (20 ) Non-cash items (9 ) (9 ) Liability as of July 31, 2019 $ 188 $ 32 Total costs incurred to date, as of July 31, 2019 $ 881 $ 89 Total costs expected to be incurred, as of July 31, 2019 $ 1,200 $ 180 As of July 31, 2019 and October 31, 2018 , the current restructuring liability related to the HPE Next Plan, reported in Accrued restructuring in the Condensed Consolidated Balance Sheets, was $190 million and $241 million , respectively. The non-current restructuring liability related to the HPE Next Plan, reported in Other non-current liabilities in the Condensed Consolidated Balance Sheets as of July 31, 2019 and October 31, 2018 was $30 million and $83 million , respectively. |
HPE Next
HPE Next | 9 Months Ended |
Jul. 31, 2019 | |
Restructuring and Related Activities [Abstract] | |
HPE Next | Restructuring Summary of Restructuring Plans On September 14, 2015, former Parent's Board of Directors approved a restructuring plan (the "2015 Plan") in connection with the Separation. On May 23, 2012, former Parent adopted a multi-year restructuring plan (the "2012 Plan") designed to simplify business processes, accelerate innovation and deliver better results for customers, employees and stockholders. As of October 31, 2018, the 2015 and 2012 Plans were complete. Restructuring Activity In connection with the 2015 and 2012 Plans, a restructuring credit of $1 million and restructuring charges of $14 million were recorded by the Company for the three and nine months ended July 31, 2018 , respectively, based on restructuring activities impacting the Company's employees and infrastructure. For details on restructuring charges related to HPE Next, see Note 4, "HPE Next". Restructuring activities related to the Company's employees and infrastructure for the 2015 and 2012 Plans are presented in the table below: 2015 Plan 2012 Plan Employee Severance Infrastructure and other Employee Severance and EER Infrastructure and other Total In millions Liability as of October 31, 2018 $ 62 $ 10 $ 11 $ 1 $ 84 Cash payments (25 ) (2 ) (5 ) — (32 ) Liability as of July 31, 2019 $ 37 $ 8 $ 6 $ 1 $ 52 Total costs incurred to date, as of July 31, 2019 $ 751 $ 78 $ 1,268 $ 145 $ 2,242 Total costs expected to be incurred, as of July 31, 2019 $ 751 $ 78 $ 1,268 $ 145 $ 2,242 The current restructuring liabilities related to the plans in the table above, reported in Accrued restructuring in the Condensed Consolidated Balance Sheets at July 31, 2019 and October 31, 2018 , were $33 million and $53 million , respectively. The non-current restructuring liabilities related to the plans in the table above, reported in Other non-current liabilities in the Condensed Consolidated Balance Sheets at July 31, 2019 and October 31, 2018 , were $19 million and $31 million , respectively. Transformation Costs The HPE Next initiative is expected to be implemented through fiscal 2020, during which time the Company expects to incur expenses for workforce reductions, to upgrade and simplify its IT infrastructure, and for other non-labor actions. These costs will be partially offset by proceeds received from real estate sales. In association with the HPE Next initiative, during the three and nine months ended July 31, 2019 , the Company incurred $172 million and $310 million of net charges, of which $170 million and $302 million were recorded within Transformation costs, and $2 million and $8 million were recorded within Non-service net periodic benefit credit in the Condensed Consolidated Statements of Earnings, respectively. During the three and nine months ended July 31, 2018, the Company incurred $131 million and $499 million of net charges, of which $126 million and $491 million were recorded within Transformation costs, and $5 million and $8 million were recorded within Non-service net periodic benefit credit, in the Condensed Consolidated Statements of Earnings, respectively. Three months ended July 31, Nine months ended July 31, 2019 2018 2019 2018 In millions Program management (1) $ 3 $ 28 $ 23 $ 82 IT costs 41 38 94 107 Restructuring charges (2) 92 129 143 385 Loss (gain) on real estate sales 8 (77 ) 1 (114 ) Impairment on real estate assets 19 — 19 — Other (3) 9 13 30 39 Total $ 172 $ 131 $ 310 $ 499 (1) Primarily consists of consulting fees and other direct costs attributable to the design and implementation of the HPE Next initiative. (2) For the three and nine months ended July 31, 2019 and 2018, a portion of these costs were recorded in Non-service net periodic benefit credit in the Condensed Consolidated Statements of Earnings as described above. (3) Primarily consists of site relocation costs in connection with the HPE Next initiative. Restructuring Plan On October 16, 2017, the Company's Board of Directors approved a restructuring plan in connection with the HPE Next initiative (the "HPE Next Plan") and on September 20, 2018, the Company's Board of Directors approved a revision to that restructuring plan. As a result of the revision to the plan, cost amounts and total headcount exits were revised and the completion of the workforce reductions was extended to fiscal 2020. The changes to the workforce will vary by country, based on business needs, local legal requirements and consultations with employee work councils and other employee representatives, as appropriate. Employee Infrastructure In millions Liability as of October 31, 2018 $ 291 $ 33 Charges 115 28 Cash payments (209 ) (20 ) Non-cash items (9 ) (9 ) Liability as of July 31, 2019 $ 188 $ 32 Total costs incurred to date, as of July 31, 2019 $ 881 $ 89 Total costs expected to be incurred, as of July 31, 2019 $ 1,200 $ 180 As of July 31, 2019 and October 31, 2018 , the current restructuring liability related to the HPE Next Plan, reported in Accrued restructuring in the Condensed Consolidated Balance Sheets, was $190 million and $241 million , respectively. The non-current restructuring liability related to the HPE Next Plan, reported in Other non-current liabilities in the Condensed Consolidated Balance Sheets as of July 31, 2019 and October 31, 2018 was $30 million and $83 million , respectively. |
Retirement and Post-Retirement
Retirement and Post-Retirement Benefit Plans | 9 Months Ended |
Jul. 31, 2019 | |
Retirement Benefits [Abstract] | |
Retirement and Post-Retirement Benefit Plans | Retirement and Post-Retirement Benefit Plans The Company's net pension benefit cost for defined benefit plans recognized in the Condensed Consolidated Statements of Earnings for the three and nine months ended July 31, 2019 and 2018 , was as follows: Three months ended July 31, Nine months ended July 31, 2019 2018 2019 2018 In millions Service cost $ 21 $ 26 $ 63 $ 79 Interest cost (1) 54 55 165 168 Expected return on plan assets (1) (126 ) (139 ) (386 ) (423 ) Amortization and deferrals (1) : Actuarial loss 59 52 176 158 Prior service benefit (4 ) (4 ) (12 ) (12 ) Net periodic benefit cost (credit) 4 (10 ) 6 (30 ) Settlement loss (1) 4 9 10 11 Special termination benefits (1) 1 1 2 5 Net benefit cost (credit) $ 9 $ — $ 18 $ (14 ) (1) These non-service components of net periodic benefit cost were included in Non-service net periodic benefit credit in the Condensed Consolidated Statements of Earnings. Net benefit cost for the Company's post-retirement benefit plans was not material for the three and nine months ended July 31, 2019 and 2018 . |
Taxes on Earnings
Taxes on Earnings | 9 Months Ended |
Jul. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Taxes on Earnings | Taxes on Earnings Provision for Taxes The Company's effective tax rate was 89.8% and 2.8% for the three months ended July 31, 2019 and 2018 , respectively, and 31.4% and 1,003.9% for the nine months ended July 31, 2019 and 2018 , respectively. The effective tax rates for the three and nine months ended July 31, 2019 and 2018 were significantly impacted by the Tax Act and the settlement of certain pre-Separation tax liabilities of HP Inc. For the three and nine months ended July 31, 2019 , the Company recorded $303 million of net income tax benefits and $80 million of net income tax charges, respectively, related to various items discrete to the period. For the three months ended July 31, 2019 , this amount primarily included $308 million of income tax benefits predominantly related to the change in pre-Separation tax liabilities as a result of the effective settlement of the U.S. federal income tax audit of fiscal years 2013 through 2015 for HP Inc. for which the Company shares joint and several liability and for which the Company is partially indemnified by HP Inc. under the Tax Matters Agreement and $18 million of net income tax benefits on transformation costs, and acquisition, disposition and other related charges, partially offset by $19 million of income tax charges related to uncertain tax reserves pertaining to separation activities and $14 million of income tax charges related to changes in U.S. state valuation allowances as a result of impacts of the Tax Act. For the nine months ended July 31, 2019 , the amount primarily included $365 million of income tax charges related to changes in U.S. federal and state valuation allowances as a result of impacts of the Tax Act, $40 million of income tax charges related to future withholding tax costs on distributions of earnings, and $19 million of income tax charges related to uncertain tax reserves pertaining to separation activities, partially offset by $264 million of income tax benefits related to the change in pre-Separation tax liabilities for which the Company shares joint and several liability with HP Inc. and for which the Company is partially indemnified by HP Inc. under the Tax Matters Agreement, and $75 million of income tax benefits on transformation costs, and acquisition, disposition and other related charges. For the three and nine months ended July 31, 2018 , the Company recorded $68 million and $3.3 billion of net income tax benefits, respectively, related to various items discrete to the period. For the three months ended July 31, 2018 , this amount primarily included $38 million of income tax benefits from the release of non-U.S. valuation allowances on deferred tax assets following changes in foreign tax laws, $33 million of net income tax benefits for impacts related to U.S. tax reform and $26 million of net excess tax benefits related to stock-based compensation, partially offset by $7 million of income tax charges related to tax indemnification with HP Inc. For the nine months ended July 31, 2018 , this amount primarily included $2.0 billion of income tax benefits for the effects of the settlement of certain pre-Separation Hewlett-Packard Company income tax liabilities, $713 million of net income tax benefits for impacts related to U.S. tax reform, $228 million of income tax benefits from foreign tax credits and from the release of non-U.S. valuation allowances on deferred tax assets and liabilities established in connection with the Everett Transaction following changes in foreign tax laws, $203 million of income tax benefits related to the liquidation of an insolvent non-U.S. subsidiary, $74 million of net income tax benefits on restructuring charges, separation costs and acquisition, disposition, and other related charges, $68 million of net excess tax benefits related to stock-based compensation, and $38 million of income tax benefits from the release of non-U.S. valuation allowances on deferred tax assets following changes in foreign tax laws. Recent Tax Legislation The Tax Act required the Company to incur a one-time Transition Tax on deferred foreign income not previously subject to U.S. income tax at a rate of 15.5% for foreign cash and certain other net current assets and 8% on the remaining income. The GILTI and BEAT provisions of the Tax Act became effective for the Company beginning November 1, 2018 . The Company has an October 31 fiscal year end; therefore, the lower corporate tax rate enacted by the Tax Act was phased in, resulting in a U.S. statutory federal rate of 23.3% for the fiscal year ending October 31, 2018 and 21% for the current and subsequent fiscal years. The Company completed its accounting for the tax effects of the Tax Act based on currently available legislative and regulatory updates in the first quarter of fiscal 2019, resulting in an additional tax charge of $426 million . This amount includes $438 million of income tax charges relating to additional valuation allowances against certain U.S. federal deferred tax assets, $56 million of income tax benefits resulting from the release of valuation allowances against certain U.S. state deferred tax assets, an additional $7 million of Transition Tax and $37 million of income tax charges related to future withholding tax costs on distributions of earnings. No cash payment is anticipated due to the availability of sufficient tax credits to offset the Transition Tax. The Company has elected to treat taxes due on future GILTI inclusions in U.S. taxable income as a current period expense when incurred. Uncertain Tax Positions As of July 31, 2019 and October 31, 2018 , the amount of unrecognized tax benefits was $2.6 billion and $8.8 billion , respectively, of which up to $0.8 billion and $1.1 billion , respectively, would affect the Company's effective tax rate if realized as of their respective periods. The Company is joint and severally liable for certain pre-Separation tax liabilities of HP Inc. HP Inc. is subject to numerous ongoing audits by state and foreign tax authorities. During the nine months ended July 31, 2019, HP Inc. effectively settled with the IRS on pre-Separation Hewlett-Packard Company audits for fiscal years 2013 through 2015, for which the Company had been joint and severally liable, primarily contributing to the reduction in the Company's unrecognized tax benefits of $6.2 billion . The Company recognizes interest income from favorable settlements and interest expense and penalties accrued on unrecognized tax benefits in (Benefit) provision for taxes in the Condensed Consolidated Statements of Earnings. As of July 31, 2019 and October 31, 2018 , the Company has recorded $130 million and $142 million , respectively, for interest and penalties in the Condensed Consolidated Balance Sheets. The Company engages in continuous discussions and negotiations with taxing authorities regarding tax matters in various jurisdictions. The Company does not expect complete resolution of any audit cycle within the next 12 months . However, it is reasonably possible that certain federal, foreign and state tax issues may be concluded in the next 12 months , including issues involving transfer pricing, joint and several tax liabilities and other matters. Accordingly, the Company believes it is reasonably possible that its existing unrecognized tax benefits may be reduced by an amount up to $40 million within the next 12 months , of which $7 million would affect the Company’s effective tax rate if realized. Deferred Tax Assets and Liabilities Deferred tax assets and liabilities included in the Condensed Consolidated Balance Sheets were as follows: As of July 31, 2019 October 31, 2018 In millions Deferred tax assets $ 1,657 $ 2,403 Deferred tax liabilities (278 ) (228 ) Deferred tax assets net of deferred tax liabilities $ 1,379 $ 2,175 Tax Matters Agreement and Other Income Tax Matters In connection with the Separation, the Company entered into a Tax Matters Agreement with HP Inc. In connection with the Everett and Seattle Transactions, the Company entered into a DXC Tax Matters Agreement with DXC and a Micro Focus Tax Matters Agreement with Micro Focus, respectively. For more details, see the Company's Annual Report on Form 10-K for the fiscal year ended October 31, 2018 . |
Balance Sheet Details
Balance Sheet Details | 9 Months Ended |
Jul. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Balance Sheet Details | Balance Sheet Details Balance sheet details were as follows: Cash and cash equivalents As of July 31, 2019 October 31, 2018 In millions Cash and cash equivalents $ 3,693 $ 4,880 Restricted cash 318 204 Cash, cash equivalents and restricted cash $ 4,011 $ 5,084 Inventory As of July 31, 2019 October 31, 2018 In millions Finished goods $ 1,225 $ 1,274 Purchased parts and fabricated assemblies 991 1,173 Total $ 2,216 $ 2,447 For the nine months ended July 31, 2019 , the decrease in inventory was due primarily to lower commodity costs and slower inventory replenishment as a result of improved market supply availability for key commodities. Other Current Assets As of July 31, 2019 October 31, 2018 In millions Value-added tax receivables $ 630 $ 811 Short-term tax receivables and prepaid taxes 225 535 Manufacturer and other receivables 619 937 Prepaid and other current assets 832 793 Restricted cash 318 204 Total $ 2,624 $ 3,280 For the nine months ended July 31, 2019 , the decrease in Other current assets was due primarily to a decrease in short-term tax receivables and prepaid taxes following the adoption of the new accounting standard related to income taxes in the first quarter of fiscal 2019, a decrease in manufacturer and other receivables as a result of lower collateral receivables and lower receivables from contract manufacturers, and a decrease in value-added tax receivables. Property, Plant and Equipment As of July 31, 2019 October 31, 2018 In millions Land $ 293 $ 294 Buildings and leasehold improvements 2,157 2,103 Machinery and equipment, including equipment held for lease 9,460 9,419 11,910 11,816 Accumulated depreciation (5,910 ) (5,678 ) Total $ 6,000 $ 6,138 Notes Payable and Short-Term Borrowings As of July 31, 2019 October 31, 2018 In millions Current portion of long-term debt $ 1,180 $ 1,196 FS commercial paper 671 392 Notes payable to banks, lines of credit and other (1) 356 417 Total $ 2,207 $ 2,005 (1) As of July 31, 2019 and October 31, 2018 , notes payable to banks, lines of credit and other includes $228 million and $361 million , respectively, of borrowing associated with FS and its subsidiaries. Warranties The Company's aggregate product warranty liability as of July 31, 2019 , and changes during the nine months then ended were as follows: Nine Months Ended In millions Balance at beginning of period $ 430 Accruals for warranties issued 178 Adjustments related to pre-existing warranties 6 Settlements made (212 ) Balance at end of period $ 402 Contract balances The Company’s contract balances consist of contract assets, contract liabilities, and costs to obtain a contract with a customer. Contract Assets A summary of accounts receivable, net, including unbilled receivables was as follows: As of July 31, 2019 October 31, 2018 In millions Accounts receivable, net Accounts receivable $ 2,786 $ 3,117 Unbilled receivables 210 185 Allowance for doubtful accounts (31 ) (39 ) Total $ 2,965 $ 3,263 Contract Liabilities Contract liabilities consist of deferred revenue. The aggregate balances of current and non-current deferred revenue were $5.9 billion and $5.8 billion as of July 31, 2019 and October 31, 2018 , respectively, which included $96 million and $82 million of deferred revenue related to FS, respectively. During the nine months ended July 31, 2019 , approximately $5.1 billion of deferred revenue was recognized as revenue. Remaining Performance Obligations Revenue allocated to remaining performance obligations represents contract work that has not yet been performed and does not include contracts where the customer is not committed. Remaining performance obligations estimates are subject to change and are affected by several factors, including contract terminations, changes in the scope of contracts, adjustments for revenue that has not materialized and adjustments for currency. Remaining performance obligations consist of deferred revenue. As of July 31, 2019 , the aggregate amount of remaining performance obligations was $5.9 billion . The Company expects to recognize approximately 22% of this amount as revenue over the remaining fiscal year. Costs to Obtain a Contract As of July 31, 2019 , the current and non-current portions of the capitalized costs to obtain a contract were $46 million and $69 million , which were included in Other current assets and Long-term financing receivables and other assets, respectively, in the Condensed Consolidated Balance Sheet. During the three and nine months ended July 31, 2019 , the Company amortized $12 million and $34 million |
Financing Receivables and Opera
Financing Receivables and Operating Leases | 9 Months Ended |
Jul. 31, 2019 | |
Leases [Abstract] | |
Financing Receivables and Operating Leases | Financing Receivables and Operating Leases Financing receivables represent sales-type and direct-financing leases of the Company and third-party products. These receivables typically have terms ranging from two to five years and are usually collateralized by a security interest in the underlying assets. Financing receivables also include billed receivables from operating leases. The components of financing receivables were as follows: As of July 31, 2019 October 31, 2018 In millions Minimum lease payments receivable $ 9,009 $ 8,691 Unguaranteed residual value 322 297 Unearned income (765 ) (732 ) Financing receivables, gross 8,566 8,256 Allowance for doubtful accounts (133 ) (120 ) Financing receivables, net 8,433 8,136 Less: current portion (1) (3,567 ) (3,396 ) Amounts due after one year, net (1) $ 4,866 $ 4,740 (1) The Company includes the current portion in Financing receivables, and amounts due after one year, net in Long-term financing receivables and other assets, in the accompanying Condensed Consolidated Balance Sheets. Sale of Financing Receivables During the nine months ended July 31, 2019 and 2018 , the Company entered into arrangements to transfer the contractual payments due under certain financing receivables to third party financial institutions. During the nine months ended July 31, 2019 and 2018 , the Company sold $153 million and $127 million , respectively, of financing receivables. The gains recognized on the sales of financing receivables were not material for both periods. Credit Quality Indicators The credit risk profile of gross financing receivables, based upon internal risk ratings, was as follows: As of July 31, 2019 October 31, 2018 In millions Risk Rating: Low $ 4,377 $ 4,238 Moderate 3,913 3,805 High 276 213 Total $ 8,566 $ 8,256 Accounts rated low risk typically have the equivalent of a Standard & Poor's rating of BBB– or higher, while accounts rated moderate risk generally have the equivalent of BB+ or lower. The Company classifies accounts as high risk when it considers the financing receivable to be impaired or when management believes there is a significant near-term risk of impairment. Allowance for Doubtful Accounts The allowance for doubtful accounts for financing receivables as of July 31, 2019 and October 31, 2018 and the respective changes during the nine and twelve months then ended were as follows: As of July 31, 2019 October 31, 2018 In millions Balance at beginning of period $ 120 $ 86 Provision for doubtful accounts 25 49 Write-offs (12 ) (15 ) Balance at end of period $ 133 $ 120 The gross financing receivables and related allowance evaluated for loss were as follows: As of July 31, 2019 October 31, 2018 In millions Gross financing receivables collectively evaluated for loss $ 8,120 $ 7,917 Gross financing receivables individually evaluated for loss (1) 446 339 Total $ 8,566 $ 8,256 Allowance for financing receivables collectively evaluated for loss $ 84 $ 78 Allowance for financing receivables individually evaluated for loss 49 42 Total $ 133 $ 120 (1) Includes billed operating lease receivables and billed and unbilled sales-type and direct-financing lease receivables. Non-Accrual and Past-Due Financing Receivables The following table summarizes the aging and non-accrual status of gross financing receivables: As of July 31, 2019 October 31, 2018 In millions Billed: (1) Current 1-30 days $ 319 $ 275 Past due 31-60 days 62 42 Past due 61-90 days 15 13 Past due > 90 days 86 74 Unbilled sales-type and direct-financing lease receivables 8,084 7,852 Total gross financing receivables $ 8,566 $ 8,256 Gross financing receivables on non-accrual status (2) $ 297 $ 226 Gross financing receivables 90 days past due and still accruing interest (2) $ 149 $ 113 (1) Includes billed operating lease receivables and billed sales-type and direct-financing lease receivables. (2) Includes billed operating lease receivables and billed and unbilled sales-type and direct-financing lease receivables. Operating Leases Operating lease assets included in Property, plant and equipment in the Condensed Consolidated Balance Sheets were as follows: As of July 31, 2019 October 31, 2018 In millions Equipment leased to customers $ 7,275 $ 7,290 Accumulated depreciation (3,225 ) (3,078 ) Total $ 4,050 $ 4,212 |
Goodwill
Goodwill | 9 Months Ended |
Jul. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Goodwill Goodwill allocated to the Company's reportable segments as of July 31, 2019 and the change in the respective carrying amounts during the nine months then ended were as follows: Hybrid IT Intelligent Edge Financial Services Total In millions Balance at October 31, 2018 (1) (2) $ 15,479 $ 1,914 $ 144 $ 17,537 Goodwill acquired during the period (3) 48 — — 48 Goodwill adjustments 2 — — 2 Balance at July 31, 2019 (2) $ 15,529 $ 1,914 $ 144 $ 17,587 (1) As a result of the organizational realignments effective during the first quarter of fiscal 2019, which are described in detail in Note 2, "Segment Information", goodwill was reclassified to the respective segments as of the beginning of the period using a relative fair value approach. (2) Goodwill is net of an accumulated impairment loss of $88 million related to the Corporate Investments segment which was recorded during the fourth quarter of fiscal 2018. There is no remaining goodwill in the Corporate Investments segment. (3) Goodwill acquired in connection with the acquisition of BlueData. Goodwill is tested for impairment at the reporting unit level. As of July 31, 2019 , the Company's reporting units containing goodwill are consistent with the reportable segments identified in Note 2, "Segment Information". The Company will continue to evaluate the recoverability of goodwill on an annual basis as of the beginning of its fourth fiscal quarter and whenever events or changes in circumstances indicate there may be a potential impairment. |
Fair Value
Fair Value | 9 Months Ended |
Jul. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value | 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 The Company 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 the Company's assets and liabilities that are measured at fair value on a recurring basis: As of July 31, 2019 As of October 31, 2018 Fair Value Measured Using Fair Value Measured Using Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total In millions Assets Cash Equivalents and Investments: Time deposits $ — $ 908 $ — $ 908 $ — $ 781 $ — $ 781 Money market funds 609 — — 609 2,340 — — 2,340 Foreign bonds 7 125 — 132 7 124 — 131 Other debt securities — 1 32 33 — — 25 25 Derivative Instruments: Interest rate contracts — 20 — 20 — — — — Foreign exchange contracts — 467 — 467 — 496 — 496 Total assets $ 616 $ 1,521 $ 32 $ 2,169 $ 2,347 $ 1,401 $ 25 $ 3,773 Liabilities Derivative Instruments: Interest rate contracts $ — $ 32 $ — $ 32 $ — $ 353 $ — $ 353 Foreign exchange contracts — 116 — 116 — 117 — 117 Other derivatives — 1 — 1 — 6 — 6 Total liabilities $ — $ 149 $ — $ 149 $ — $ 476 $ — $ 476 During the nine months ended July 31, 2019 , there were no transfers between levels within the fair value hierarchy. Other Fair Value Disclosures Short- and Long-Term Debt: At July 31, 2019 and October 31, 2018 , the estimated fair value of the Company's short-term and long-term debt was $13.5 billion and $12.2 billion , respectively. |
Financial Instruments
Financial Instruments | 9 Months Ended |
Jul. 31, 2019 | |
Investments, All Other Investments [Abstract] | |
Financial Instruments | Financial Instruments Cash Equivalents and Available-for-Sale Investments Cash equivalents and available-for-sale investments were as follows: As of July 31, 2019 As of October 31, 2018 Cost Gross Unrealized Gain Gross Unrealized Loss Fair Value Cost Gross Unrealized Gain Gross Unrealized Loss Fair Value In millions Cash Equivalents: Time deposits $ 908 $ — $ — $ 908 $ 781 $ — $ — $ 781 Money market funds 609 — — 609 2,340 — — 2,340 Total cash equivalents 1,517 — — 1,517 3,121 — — 3,121 Available-for-Sale Investments: Foreign bonds 110 22 — 132 113 18 — 131 Other debt securities 33 — — 33 26 — (1 ) 25 Total available-for-sale investments 143 22 — 165 139 18 (1 ) 156 Total cash equivalents and available-for-sale debt investments $ 1,660 $ 22 $ — $ 1,682 $ 3,260 $ 18 $ (1 ) $ 3,277 As of July 31, 2019 and October 31, 2018 , the carrying amount of cash equivalents approximated fair value due to the short period of time to maturity. Time deposits were primarily issued by institutions outside the U.S. as of July 31, 2019 and October 31, 2018 . The estimated fair value of the available-for-sale debt investments may not be representative of values that will be realized in the future. Contractual maturities of available-for-sale debt investments were as follows: July 31, 2019 Amortized Cost Fair Value In millions Due in one to five years $ 10 $ 10 Due in more than five years 133 155 $ 143 $ 165 Equity Investments Equity securities investments in privately held companies are included in Long-term financing receivables and other assets in the Condensed Consolidated Balance Sheets. The carrying amount of these investments without readily determinable fair values amounted to $184 million and $162 million at July 31, 2019 and October 31, 2018 , respectively. Investments in equity securities that are accounted for using the equity method are included in Investments in equity interests in the Condensed Consolidated Balance Sheets. These investments amounted to $2.3 billion and $2.4 billion at July 31, 2019 and October 31, 2018 , respectively. Fair Value of Derivative Instruments in the Condensed Consolidated Balance Sheets The gross notional and fair value of derivative instruments in the Condensed Consolidated Balance Sheets were as follows: As of July 31, 2019 As of October 31, 2018 Fair Value Fair Value Outstanding Gross Notional Other Current Assets Long-Term Financing Receivables and Other Assets Other Accrued Liabilities Long-Term Other Liabilities Outstanding Gross Notional Other Current Assets Long-Term Financing Receivables and Other Assets Other Accrued Liabilities Long-Term Other Liabilities In millions Derivatives designated as hedging instruments Fair value hedges: Interest rate contracts $ 6,850 $ — $ 20 $ — $ 32 $ 6,850 $ — $ — $ — $ 353 Cash flow hedges: Foreign currency contracts 8,539 218 157 24 23 8,423 270 107 11 15 Net investment hedges: Foreign currency contracts 1,745 25 30 18 18 1,737 32 41 13 11 Total derivatives designated as hedging instruments 17,134 243 207 42 73 17,010 302 148 24 379 Derivatives not designated as hedging instruments Foreign currency contracts 5,206 36 1 26 7 6,780 41 5 55 12 Other derivatives 103 — — 1 — 104 — — 6 — Total derivatives not designated as hedging instruments 5,309 36 1 27 7 6,884 41 5 61 12 Total derivatives $ 22,443 $ 279 $ 208 $ 69 $ 80 $ 23,894 $ 343 $ 153 $ 85 $ 391 Offsetting of Derivative Instruments The Company recognizes all derivative instruments on a gross basis in the Condensed Consolidated Balance Sheets. The Company's derivative instruments are subject to master netting arrangements and collateral security arrangements. The Company does not offset the fair value of its derivative instruments against the fair value of cash collateral posted under collateral security agreements. As of July 31, 2019 and October 31, 2018 , information related to the potential effect of the Company's use of the master netting agreements and collateral security agreements were as follows: As of July 31, 2019 In the Condensed Consolidated Balance Sheets (i) (ii) (iii) = (i)–(ii) (iv) (v) (vi) = (iii)–(iv)–(v) Gross Amounts Not Offset Gross Amount Recognized Gross Amount Offset Net Amount Presented Derivatives Financial Collateral Net Amount In millions Derivative assets $ 487 $ — $ 487 $ 125 $ 316 (1) $ 46 Derivative liabilities $ 149 $ — $ 149 $ 125 $ 5 (2) $ 19 As of October 31, 2018 In the Condensed Consolidated Balance Sheets (i) (ii) (iii) = (i)–(ii) (iv) (v) (vi) = (iii)–(iv)–(v) Gross Amounts Not Offset Gross Amount Recognized Gross Amount Offset Net Amount Presented Derivatives Financial Collateral Net Amount In millions Derivative assets $ 496 $ — $ 496 $ 179 $ 205 (1) $ 112 Derivative liabilities $ 476 $ — $ 476 $ 179 $ 302 (2) $ (5 ) (1) Represents the cash collateral posted by counterparties as of the respective reporting date for the Company's asset position, net of derivative amounts that could be offset, as of, generally, two business days prior to the respective reporting date. (2) Represents the collateral posted by the Company in cash or through the re-use of counterparty cash collateral as of the respective reporting date for the Company's liability position, net of derivative amounts that could be offset, as of, generally, two business days prior to the respective reporting date. As of July 31, 2019 , of the $5 million of collateral posted, $4 million was in cash and $1 million was through re-use of counterparty collateral. As of October 31, 2018 , $302 million of collateral posted was entirely in cash. Effect of Derivative Instruments on the Condensed Consolidated Statements of Earnings The pre-tax effect of derivative instruments and related hedged items in a fair value hedging relationship for the three and nine months ended July 31, 2019 and 2018 were as follows: Gains (Losses) Recognized in Earnings on Derivative and Related Hedged Item Derivative Instrument Location Three months ended July 31, 2019 Nine months ended July 31, 2019 Hedged Item Location Three months ended July 31, 2019 Nine months ended July 31, 2019 In millions In millions Interest rate contracts Interest and other, net $ 123 $ 341 Fixed-rate debt Interest and other, net $ (123 ) $ (341 ) Gains (Losses) Recognized in Earnings on Derivative and Related Hedged Item Derivative Instrument Location Three months ended July 31, 2018 Nine months ended July 31, 2018 Hedged Item Location Three months ended July 31, 2018 Nine months ended July 31, 2018 In millions In millions Interest rate contracts Interest and other, net $ 16 $ (194 ) Fixed-rate debt Interest and other, net $ (16 ) $ 194 The pre-tax effect of derivative instruments in cash flow and net investment hedging relationships for the three and nine months ended July 31, 2019 were as follows: Gains (Losses) Recognized in Other Comprehensive Income ("OCI") on Derivatives (Effective Portion) Gains (Losses) Reclassified from Accumulated OCI Into Earnings (Effective Portion) Three months ended July 31, 2019 Nine months ended July 31, 2019 Location Three months ended July 31, 2019 Nine months ended July 31, 2019 In millions In millions Cash flow hedges: Foreign currency contracts $ 43 $ 102 Net revenue $ 42 $ 168 Foreign currency contracts 20 123 Interest and other, net 16 91 Total cash flow hedges $ 63 $ 225 Net earnings from continuing operations $ 58 $ 259 Net investment hedges: Foreign currency contracts $ (18 ) $ (23 ) Interest and other, net $ — $ — The pre-tax effect of derivative instruments in cash flow and net investment hedging relationships for the three and nine months ended July 31, 2018 was as follows: Gains (Losses) Recognized in Other Comprehensive Income ("OCI") on Derivatives (Effective Portion) Gains (Losses) Reclassified from Accumulated OCI Into Earnings (Effective Portion) Three months ended July 31, 2018 Nine months ended July 31, 2018 Location Three months ended July 31, 2018 Nine months ended July 31, 2018 In millions In millions Cash flow hedges: Foreign currency contracts $ 121 $ 59 Net revenue $ 29 $ (82 ) Foreign currency contracts 28 (9 ) Interest and other, net 14 4 Total cash flow hedges $ 149 $ 50 Net earnings from continuing operations $ 43 $ (78 ) Net investment hedges: Foreign currency contracts $ 57 $ 31 Interest and other, net $ — $ — As of July 31, 2019 and 2018 , no portion of the hedging instruments' gain or loss was excluded from the assessment of effectiveness for fair value, cash flow or net investment hedges. Hedge ineffectiveness for fair value, cash flow, and net investment hedges was not material for the three and nine months ended July 31, 2019 and 2018 . As of July 31, 2019 , the Company expects to reclassify an estimated net Accumulated other comprehensive gain of approximately $80 million , net of taxes, to earnings in the next twelve months, along with the earnings effects of the related forecasted transactions associated with cash flow hedges. The pre-tax effect of derivative instruments not designated as hedging instruments on the Condensed Consolidated Statements of Earnings for the three and nine months ended July 31, 2019 and 2018 was as follows: Gains (Losses) Recognized in Earnings on Derivatives Location Three months ended July 31, 2019 Three months ended July 31, 2018 Nine months ended July 31, 2019 Nine months ended July 31, 2018 In millions Foreign currency contracts Interest and other, net $ 55 $ 233 $ (68 ) $ 104 Other derivatives Interest and other, net (2 ) — 5 — Total $ 53 $ 233 $ (63 ) $ 104 |
Borrowings
Borrowings | 9 Months Ended |
Jul. 31, 2019 | |
Debt Disclosure [Abstract] | |
Borrowings | Borrowings Commercial Paper Hewlett Packard Enterprise's Board of Directors has authorized the issuance of up to $4.0 billion in aggregate principal amount of commercial paper by Hewlett Packard Enterprise. Hewlett Packard Enterprise's subsidiaries are authorized to issue up to an additional $1.0 billion in aggregate principal amount of commercial paper. Hewlett Packard Enterprise maintains two commercial paper programs, and a wholly-owned subsidiary maintains a third program. Hewlett Packard Enterprise's U.S. program provides for the issuance of U.S. dollar-denominated commercial paper up to a maximum aggregate principal amount of $4.0 billion . Hewlett Packard Enterprise's euro commercial paper program provides for the issuance of commercial paper outside of the U.S. denominated in U.S. dollars, euros or British pounds up to a maximum aggregate principal amount of $3.0 billion or the equivalent in those alternative currencies. The combined aggregate principal amount of commercial paper outstanding under those programs at any one time cannot exceed the $4.0 billion authorized by Hewlett Packard Enterprise's Board of Directors. The Hewlett Packard Enterprise subsidiary's euro Commercial Paper/Certificate of Deposit Program provides for the issuance of commercial paper in various currencies of up to a maximum aggregate principal amount of $1.0 billion , which was increased from $500 million , by way of an amendment in April 2019. As of July 31, 2019 and October 31, 2018 , no borrowings were outstanding under Hewlett Packard Enterprise’s two commercial paper programs, and $671 million and $392 million , respectively, were outstanding under the subsidiary’s program. Revolving Credit Facility On August 16, 2019, the Company entered into a revolving credit facility (the "Credit Agreement"), together with the lenders named therein, JPMorgan Chase Bank, N.A. ("JPMorgan"), as co-administrative agent and administrative processing agent, and Citibank, N.A., as co-administrative agent, providing for a senior, unsecured revolving credit facility with aggregate lending commitments of $4.75 billion . Loans under the revolving credit facility may be used for general corporate purposes. Commitments under the Credit Agreement are available for a period of five years , which period may be extended, subject to satisfaction of certain conditions, by up to two one-year periods. Commitment fees, interest rates and other terms of borrowing under the credit facility vary based on Hewlett Packard Enterprise's external credit rating. This credit facility replaces the Company's prior credit facility that was entered into on November 1, 2015, which was terminated in connection with its entering into the new credit facility. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Jul. 31, 2019 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders' Equity Taxes related to Other Comprehensive Income Three months ended July 31, Nine months ended July 31, 2019 2018 2019 2018 In millions Taxes on change in net unrealized gains (losses) on cash flow hedges: Tax (provision) on net unrealized gains arising during the period $ (6 ) $ (20 ) $ (24 ) $ (6 ) Tax provision (benefit) on net (gains) losses reclassified into earnings 7 5 31 (11 ) 1 (15 ) 7 (17 ) Taxes on change in unrealized components of defined benefit plans: Tax benefit on net unrealized losses arising during the period 5 3 13 2 Tax provision on amortization of net actuarial loss and prior service benefit (3 ) (4 ) (9 ) (10 ) Tax provision on curtailments, settlements and other — (5 ) (7 ) (12 ) 2 (6 ) (3 ) (20 ) Tax (provision) benefit on change in cumulative translation adjustment (1 ) 2 — 3 Tax benefit (provision) on other comprehensive income $ 2 $ (19 ) $ 4 $ (34 ) Changes and reclassifications related to Other Comprehensive Income, net of taxes Three months ended July 31, Nine months ended July 31, 2019 2018 2019 2018 In millions Other comprehensive income, net of taxes: Change in net unrealized gains (losses) on available-for-sale securities: Net unrealized gains (losses) arising during the period $ 3 $ (2 ) $ 8 $ (1 ) Gains reclassified into earnings — — (3 ) (9 ) 3 (2 ) 5 (10 ) Change in net unrealized gains (losses) on cash flow hedges: Net unrealized gains arising during the period 57 129 201 44 Net (gains) losses reclassified into earnings (1) (51 ) (38 ) (228 ) 67 6 91 (27 ) 111 Change in unrealized components of defined benefit plans: Net unrealized losses arising during the period (26 ) (22 ) (65 ) (21 ) Amortization of net actuarial loss and prior service benefit (2) 51 43 152 133 Curtailments, settlements and other 5 4 5 (1 ) 30 25 92 111 Change in cumulative translation adjustment (9 ) (38 ) (2 ) (37 ) Other comprehensive income, net of taxes $ 30 $ 76 $ 68 $ 175 (1) For more details on the reclassification of pre-tax net (gains) losses on cash flow hedges into the Condensed Consolidated Statements of Earnings, see Note 11, "Financial Instruments". (2) These components are included in the computation of net pension and post-retirement benefit cost in Note 5, "Retirement and Post-Retirement Benefit Plans". The components of Accumulated other comprehensive loss, net of taxes as of July 31, 2019 , and changes during the nine months ended July 31, 2019 were as follows: Net unrealized gains (losses) on available-for-sale securities Net unrealized gains (losses) on cash flow hedges Unrealized components of defined benefit plans Cumulative translation adjustment Accumulated other comprehensive loss In millions Balance at beginning of period $ 17 $ 106 $ (2,922 ) $ (419 ) $ (3,218 ) Other comprehensive income (loss) before reclassifications 8 201 (65 ) (2 ) 142 Reclassifications of (gains) losses into earnings (3 ) (228 ) 157 — (74 ) Balance at end of period $ 22 $ 79 $ (2,830 ) $ (421 ) $ (3,150 ) Share Repurchase Program For the nine months ended July 31, 2019 , the Company repurchased and settled a total of 130 million shares under its share repurchase program through open market repurchases, which included 2.4 million shares that were unsettled open market repurchases as of October 31, 2018. Additionally, as of July 31, 2019 , the Company had unsettled open market repurchases of 1.2 million shares. Shares repurchased during the nine months ended July 31, 2019 were recorded as a $1.9 billion reduction to stockholders' equity. As of July 31, 2019 , the Company had a remaining authorization of $ 2.7 billion for future share repurchases. |
Net Earnings Per Share
Net Earnings Per Share | 9 Months Ended |
Jul. 31, 2019 | |
Earnings Per Share [Abstract] | |
Net Earnings Per Share | Net Earnings Per Share The Company calculates basic net EPS using net earnings and the weighted-average number of shares outstanding during the reporting period. Diluted net EPS includes the weighted-average dilutive effect of restricted stock units, stock options, and performance-based awards. The reconciliations of the numerators and denominators of each of the basic and diluted net EPS calculations were as follows: Three months ended July 31, Nine months ended July 31, 2019 2018 2019 2018 In millions, except per share amounts Numerator: Net (loss) earnings from continuing operations $ (27 ) $ 452 $ 569 $ 2,784 Net loss from discontinued operations — (1 ) — (119 ) Net (loss) earnings $ (27 ) $ 451 $ 569 $ 2,665 Denominator: Weighted-average shares used to compute basic net EPS 1,334 1,513 1,367 1,552 Dilutive effect of employee stock plans — 18 13 26 Weighted-average shares used to compute diluted net EPS 1,334 1,531 1,380 1,578 Basic net (loss) earnings per share: Continuing operations $ (0.02 ) $ 0.30 $ 0.42 $ 1.79 Discontinued operations (1) — — — (0.07 ) Basic net (loss) earnings per share $ (0.02 ) $ 0.30 $ 0.42 $ 1.72 Diluted net (loss) earnings per share: Continuing operations $ (0.02 ) $ 0.29 $ 0.41 $ 1.76 Discontinued operations (1)(2) — — — (0.07 ) Diluted net (loss) earnings per share $ (0.02 ) $ 0.29 $ 0.41 $ 1.69 Anti-dilutive weighted-average stock awards (3) 44 2 4 3 (1) EPS for discontinued operations was calculated by deducting the EPS from continuing operations from the total EPS. (2) U.S. GAAP requires the denominator used in the diluted net EPS calculation for discontinued operations to be the same as that of continuing operations, regardless of net earnings (loss) from continuing operations. (3) The Company excludes shares potentially issuable under employee stock plans that could dilute basic net EPS in the future from the calculation of diluted net earnings (loss) per share, as their effect, if included, would have been anti-dilutive for the periods presented. |
Litigation and Contingencies
Litigation and Contingencies | 9 Months Ended |
Jul. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Litigation and Contingencies | Litigation and Contingencies Hewlett Packard Enterprise is involved in various lawsuits, claims, investigations and proceedings including those consisting of Intellectual Property ("IP"), commercial, securities, employment, employee benefits and environmental matters, which arise in the ordinary course of business. In addition, as part of the Separation and Distribution Agreement, Hewlett Packard Enterprise and HP Inc. (formerly known as "Hewlett-Packard Company") agreed to cooperate with each other in managing certain existing litigation related to both parties' businesses. The Separation and Distribution Agreement included provisions that allocate liability and financial responsibility for pending litigation involving the parties, as well as provide for cross-indemnification of the parties against liabilities to one party arising out of liabilities allocated to the other party. The Separation and Distribution Agreement also included provisions that assign to the parties responsibility for managing pending and future litigation related to the general corporate matters of HP Inc. arising prior to the Separation. Hewlett Packard Enterprise records a liability when it believes that it is both probable that a liability has been incurred and the amount of loss can be reasonably estimated. Significant judgment is required to determine both the probability of having incurred a liability and the estimated amount of the liability. Hewlett Packard Enterprise reviews these matters at least quarterly and adjusts these liabilities to reflect the impact of negotiations, settlements, rulings, advice of legal counsel and other updated information and events pertaining to a particular matter. Litigation is inherently unpredictable. However, Hewlett Packard Enterprise believes it has valid defenses with respect to legal matters pending against us. 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. Hewlett Packard Enterprise believes it has recorded adequate provisions for any such matters and, as of July 31, 2019 , it was not reasonably possible that a material loss had been incurred in connection with such matters in excess of the amounts recognized in its financial statements. Litigation, Proceedings and Investigations DXC Technology Indemnification Demand. On March 27, 2018, DXC Technology (“DXC”) served an arbitration demand on HPE under the Separation and Distribution Agreement by and between HPE and DXC (f/k/a Everett SpinCo, Inc.) dated May 24, 2016, relating to the separation of HPE’s Enterprise Services business (the “ES Business”). The arbitration demand asserts that HPE is required to indemnify DXC for any transferred long-term capitalized lease obligations of the ES Business that exceed the threshold amount of $250 million . DXC contends that this $250 million threshold was exceeded by approximately $1.0 billion because the valuation of the assets underlying certain leases did not justify their classification as operating leases based on the terms of such leases, thereby rendering them long-term capitalized lease obligations. The arbitration demand follows DXC's November 8, 2017 request for indemnification on this same issue. On August 15, 2019, the arbitration panel ruled in DXC’s favor, issuing DXC an award in the amount of $632 million . The arbitration panel also awarded pre-judgment interest of $34 million . Ross and Rogus v. Hewlett Packard Enterprise Company. On November 8, 2018, a putative class action complaint was filed in the Superior Court of California, County of Santa Clara alleging that HPE pays its California-based female employees “systemically lower compensation” than HPE pays male employees performing substantially similar work. The complaint alleges various California state law claims, including California’s Equal Pay Act, Fair Employment and Housing Act, and Unfair Competition Law, and seeks certification of a California-only class of female employees employed in certain “Covered Positions.” The complaint seeks damages, statutory and civil penalties, attorneys’ fees and costs. On April 2, 2019, HPE filed a demurrer to all causes of action and an alternative motion to strike portions of the complaint. On July 2, 2019, the court denied HPE’s demurrer as to the claims of the putative class and granted HPE’s demurrer as to the claims of the individual plaintiffs. 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 Ltd ("HP India"), a subsidiary of HP Inc., 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. Prior to the issuance of the show cause 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 and to not interrupt the transaction of business by HP India. On April 11, 2012, the Bangalore Commissioner of Customs issued an order on the products-related show cause 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 show cause notice. On April 20, 2012, the Commissioner issued an order on the parts-related show cause 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 show cause notice so as to avoid certain penalties. HP India filed appeals of the Commissioner's orders before 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. The Customs Tribunal did not order any additional deposit to be made under the parts order. In December 2013, HP India filed applications before the Customs Tribunal seeking early hearing of the appeals as well as an extension of the stay of deposit as to HP India and the individuals already granted until final disposition of the appeals. On February 7, 2014, the application for extension of the stay of deposit was granted by the Customs Tribunal until disposal of the appeals. On October 27, 2014, the Customs Tribunal commenced hearings on the cross-appeals of the Commissioner's orders. The Customs Tribunal rejected HP India's request to remand the matter to the Commissioner on procedural grounds. The hearings were scheduled to reconvene on April 6, 2015, and again on November 3, 2015 and April 11, 2016, but were canceled at the request of the Customs Tribunal. The hearing was rescheduled for January 15, 2019 but was postponed and has not yet been rescheduled. ECT Proceedings . In January 2011, the postal service of Brazil, Empresa Brasileira de Correios e Telégrafos ("ECT"), notified a former subsidiary of HP Inc. in Brazil ("HP Brazil") that it had initiated administrative proceedings to consider whether to suspend HP Brazil's right to bid and contract with ECT related to alleged improprieties in the bidding and contracting processes whereby employees of HP Brazil and employees of several other companies allegedly coordinated their bids and fixed results for three ECT contracts in 2007 and 2008. In late July 2011, ECT notified HP Brazil it had decided to apply the penalties against HP Brazil and suspend HP Brazil's right to bid and contract with ECT for five years , based upon the evidence before it. In August 2011, HP Brazil appealed ECT's decision. In April 2013, ECT rejected HP Brazil's appeal, and the administrative proceedings were closed with the penalties against HP Brazil remaining in place. In parallel, in September 2011, HP Brazil filed a civil action against ECT seeking to have ECT's decision revoked. HP Brazil also requested an injunction suspending the application of the penalties until a final ruling on the merits of the case. The court of first instance has not issued a decision on the merits of the case, but it has denied HP Brazil's request for injunctive relief. HP Brazil appealed the denial of its request for injunctive relief to the intermediate appellate court, which issued a preliminary ruling denying the request for injunctive relief but reducing the length of the sanctions from five to two years . HP Brazil appealed that decision and, in December 2011, obtained a ruling staying enforcement of ECT's sanctions until a final ruling on the merits of the case. HP Brazil expects the decision to be issued in 2019 and any subsequent appeal on the merits to last several years. Forsyth, et al. vs. HP Inc. and Hewlett Packard Enterprise. This purported class and collective action was filed on August 18, 2016 and an amended complaint was filed on December 19, 2016 in the United States District Court for the Northern District of California, against HP Inc. and Hewlett Packard Enterprise alleging defendants violated the Federal Age Discrimination in Employment Act ("ADEA"), the California Fair Employment and Housing Act, California public policy and the California Business and Professions Code by terminating older workers and replacing them with younger workers. Plaintiffs seek to certify a nationwide collective action under the ADEA comprised of all individuals aged 40 and older who had their employment terminated by an HP entity pursuant to a work force reduction ("WFR") plan on or after December 9, 2014 for individuals terminated in deferral states and on or after April 8, 2015 in non-deferral states. Plaintiffs also seek to certify a Rule 23 class under California law comprised of all persons 40 years or older employed by defendants in the state of California and terminated pursuant to a WFR plan on or after August 18, 2012. On September 20, 2017, the court granted the defendants' motion to compel arbitration and administratively closed the case pending resolution of the arbitration proceedings. On November 30, 2017, three named plaintiffs filed a single arbitration demand. Thirteen additional plaintiffs later joined the arbitration. On December 22, 2017, defendants filed a motion to (1) stay the case pending arbitrations and (2) enjoin the demanded arbitration and require each plaintiff to file a separate arbitration demand. On February 6, 2018, the court granted the motion to stay and denied the motion to enjoin. The claims of these sixteen arbitration named plaintiffs have been resolved. Additional opt-in plaintiffs have since been added to the litigation and the parties are engaged in the arbitration process for those claims. The Forsyth class action remains stayed. Wall v. Hewlett Packard Enterprise Company and HP Inc. This certified California class action and Private Attorney General Act action was filed against Hewlett-Packard Company on January 17, 2012 and the fifth amended (and operative) complaint was filed against HP Inc. and Hewlett Packard Enterprise on June 28, 2016 in the Superior Court of California, County of Orange. The complaint alleges that the defendants paid earned incentive compensation late and failed to timely pay final wages in violation of the California Labor Code. On August 9, 2016, the court ordered the class certified without prejudice to a future motion to amend or modify the class certification order or to decertify. The scheduled January 22, 2018 trial date was vacated following the parties’ notification to the court that they had reached a preliminary agreement to resolve the dispute. The parties subsequently finalized and executed a settlement agreement and, on May 9, 2018, plaintiff filed a motion seeking preliminary approval of the settlement. On July 2, 2018, the court issued an order granting preliminary approval of the settlement. On December 21, 2018, the court issued an order granting final approval of the settlement and setting a hearing for September 27, 2019 to confirm that the settlement distributions have been made. A Qualified Settlement Fund has been fully funded. Jackson, et al. v. HP Inc. and Hewlett Packard Enterprise. This putative nationwide class action was filed on July 24, 2017 in the United States District Court for the Northern District of California, San Jose Division. Plaintiffs purport to bring the lawsuit on behalf of themselves and other similarly situated African-Americans and individuals over the age of forty. Plaintiffs allege that defendants engaged in a pattern and practice of racial and age discrimination in lay-offs and promotions. Plaintiffs filed an amended complaint on September 29, 2017. Plaintiffs seek damages, attorneys’ fees and costs, and declaratory and injunctive relief. On January 12, 2018, defendants moved to transfer the matter to the federal district court in the Northern District of Georgia. Defendants also moved to dismiss the claims on various grounds and to strike certain aspects of the proposed class definition. On July 11, 2018, the court granted defendants' motion to dismiss this action for improper venue, and also partially dismissed and struck certain claims without prejudice to re-filing in the appropriate venue. On July 23, 2018, plaintiffs re-filed their lawsuit in the United States District Court for the Northern District of Georgia. On August 9, 2018, Plaintiffs filed a notice of appeal of the dismissal of the Northern District of California action with the Ninth Circuit Court of Appeals. On August 15, 2018, Plaintiffs filed a motion to stay their lawsuit in the Northern District of Georgia, which was granted by the court. Hewlett-Packard Company v. Oracle (Itanium). On June 15, 2011, HP Inc. filed suit against Oracle in the Superior Court of California, County of Santa Clara in connection with Oracle's March 2011 announcement that it was discontinuing software support for HP Inc.’s Itanium-based line of mission critical servers. HP Inc. asserted, among other things, that Oracle’s actions breached the contract that was signed by the parties as part of the settlement of the litigation relating to Oracle’s hiring of Mark Hurd. The matter eventually progressed to trial, which was bifurcated into two phases. HP Inc. prevailed in the first phase of the trial, in which the court ruled that the contract at issue required Oracle to continue to offer its software products on HP Inc.'s Itanium-based servers for as long as HP Inc. decided to sell such servers. Phase 2 of the trial was then postponed by Oracle’s appeal of the trial court’s denial of Oracle’s “anti-SLAPP” motion, in which Oracle argued that HP Inc.’s damages claim infringed on Oracle’s First Amendment rights. On August 27, 2015, the California Court of Appeal rejected Oracle’s appeal. The matter was remanded to the trial court for Phase 2 of the trial, which began on May 23, 2016, and was submitted to the jury on June 29, 2016. On June 30, 2016, the jury returned a verdict in favor of HP Inc., awarding HP Inc. approximately $3 billion in damages: $1.7 billion for past lost profits and $1.3 billion for future lost profits. On October 20, 2016, the court entered judgment for this amount with interest accruing until the judgment is paid. Oracle’s motion for a new trial was denied on December 19, 2016, and Oracle filed its notice of appeal from the trial court’s judgment on January 17, 2017. On February 2, 2017, HP Inc. filed a notice of cross-appeal challenging the trial court’s denial of prejudgment interest. Oracle filed its opening brief in the California Court of Appeal on March 7, 2019. HP Inc.’s answering/cross-opening brief was filed on June 12, 2019. On May 16, 2019, HP Inc. filed its application to renew the judgment. As of May 16, 2019, the renewed judgment is approximately $3.8 billion . Daily interest on the renewed judgment is now accruing at $1.037 million . Pursuant to the terms of the Separation and Distribution Agreement, HP Inc. and Hewlett Packard Enterprise will share equally in any recovery from Oracle once Hewlett Packard Enterprise has been reimbursed for all costs incurred in the prosecution of the action prior to the HP Inc. /Hewlett Packard Enterprise separation on November 1, 2015. Oracle America, Inc., et al. v. Hewlett Packard Enterprise Company (Terix copyright matter). On March 22, 2016, Oracle filed a complaint against HPE in the United States District Court for the Northern District of California, alleging copyright infringement, interference with contract, intentional interference with prospective economic relations, and unfair competition. Oracle’s claims arise out of HPE’s prior use of a third-party maintenance provider named Terix Computer Company, Inc. (“Terix”). Oracle contends that in connection with HPE’s use of Terix as a subcontractor for certain customers of HPE’s multivendor support business, Oracle’s copyrights were infringed, and HPE is liable for vicarious and contributory infringement and related claims. The lawsuit against HPE follows a prior lawsuit brought by Oracle against Terix in 2013 relating to Terix’s alleged unauthorized provision of Solaris patches to customers on Oracle hardware. On June 14, 2018, the court heard oral argument on HPE's and Oracle's cross-motions for summary judgment. The court has not yet ruled on the parties' motions. On January 29, 2019, the court granted HPE’s Motion for Summary Judgment as to all of Oracle’s claims and vacated the trial date. On February 20, 2019, the court entered judgment in favor of HPE, dismissing Oracle’s claims in their entirety. Oracle has appealed the trial court’s ruling to the United States Court of Appeals for the Ninth Circuit. Oracle’s opening brief was filed on July 29, 2019. HPE’s responsive brief currently is due September 27, 2019. Network-1 Technologies, Inc. v. Alcatel-Lucent USA Inc., et al. This patent infringement action was filed on September 15, 2011 in the United States District Court for the Eastern District of Texas, alleging that various Hewlett Packard Enterprise switches and access points infringe Network-1’s patent relating to the 802.3af and 802.3at “Power over Ethernet” standards. Network-1 seeks damages, attorneys’ fees and costs, and declaratory and injunctive relief. The Network-1 patent at issue expires in 2020. A jury trial was conducted beginning on November 6, 2017. On November 13, 2017, the jury returned a verdict in favor of HPE, finding that HPE did not infringe Network-1’s patent and that the patent was invalid. On August 29 2018, the court denied Network-1's motion for a new trial on infringement and entered the jury's verdict finding that HPE does not infringe the relevant Network-1 patent. The court also granted Network-1's motion for Judgment as a Matter of Law on validity. Network-1 has appealed the jury verdict of non-infringement to the United States Court of Appeals for the Federal Circuit. HPE has cross-appealed the court’s decision to grant Network-1's motion for Judgment as a Matter of Law on validity. Appellate briefing has been completed. Shared Litigation with HP Inc., DXC and Micro Focus As part of the Separation and Distribution Agreements between Hewlett Packard Enterprise and HP Inc., Hewlett Packard Enterprise and DXC, and Hewlett Packard Enterprise and Seattle SpinCo, the parties to each agreement agreed to cooperate with each other in managing certain existing litigation related to both parties' businesses. The Separation and Distribution Agreements also included provisions that assign to the parties responsibility for managing pending and future litigation related to the general corporate matters of HP Inc. (in the case of the separation of Hewlett Packard Enterprise from HP Inc.) or of Hewlett Packard Enterprise (in the case of the separation of DXC from Hewlett Packard Enterprise and the separation of Seattle SpinCo from Hewlett Packard Enterprise), in each case arising prior to the applicable separation. |
Indemnifications
Indemnifications | 9 Months Ended |
Jul. 31, 2019 | |
Guarantees and Product Warranties [Abstract] | |
Indemnifications | Indemnifications General Cross-indemnification and Tax Matters Agreements with HP Inc., DXC and Micro Focus In connection with the Separation and the Everett and Seattle Transactions, the Company entered into a Separation and Distribution Agreement and Tax Matters Agreement with HP Inc., DXC and affiliates, and Micro Focus and affiliates, effective November 1, 2015, March 31, 2017 and September 1, 2017, respectively. For further details on these agreements, see the Company's Annual Report on Form 10-K for the fiscal year ended October 31, 2018. As of July 31, 2019 and October 31, 2018 , the Company’s receivable and payable balances related to indemnified litigation matters and other contingencies, and income tax-related indemnification covered by these agreements were as follows: As of July 31, 2019 October 31, 2018 In millions Litigation matters and other contingencies Receivable $ 88 $ 104 Payable $ 57 $ 83 Income tax-related indemnification (1) Net indemnification receivable - long-term (2) $ 266 $ 16 Net indemnification receivable - short-term $ 13 $ 17 Net indemnification payable - long-term $ 9 $ 9 Net indemnification payable - short-term (3) $ 102 $ 26 (1) The actual amount that the Company may receive or pay could vary depending upon the outcome of certain unresolved tax matters, which may not be resolved for several years. (2) For the nine months ended July 31, 2019 , the increase in Net indemnification receivable - long-term was due primarily to the effects of U.S. tax reform on tax attributes related to fiscal periods prior to the Separation. (3) For the nine months ended July 31, 2019 , the increase in Net indemnification payable - short-term was due primarily to the effective settlement of the U.S. federal income tax audit of fiscal years 2013 through 2015 for HP Inc. for which the Company was joint and severally liable and for which the Company was partially indemnified by HP Inc. under the Tax Matters Agreement. |
Overview and Basis of Present_2
Overview and Basis of Presentation (Policies) | 9 Months Ended |
Jul. 31, 2019 | |
Accounting Policies [Abstract] | |
Discontinued Operations | Discontinued Operations On April 1, 2017, HPE completed the separation and merger of its Enterprise Services business with Computer Sciences Corporation ("CSC") (collectively, the "Everett Transaction"). HPE transferred its Enterprise Services business to Everett SpinCo, Inc. (a wholly-owned subsidiary of HPE) ("Everett") and distributed all of the shares of Everett to HPE stockholders. Following the distribution, New Everett Merger Sub Inc., a wholly-owned subsidiary of Everett, merged with and into CSC and Everett changed its name to DXC Technology Company ("DXC"). On September 1, 2017, the Company completed the separation and merger of its Software business segment with Micro Focus International plc (“Micro Focus”) (collectively, the “Seattle Transaction”). HPE transferred its Software business segment to Seattle SpinCo, Inc. (a wholly-owned subsidiary of HPE) ("Seattle"), and distributed all of the shares of Seattle to HPE stockholders. Following the share distribution, Seattle MergerSub, Inc., an indirect, wholly-owned subsidiary of Micro Focus, merged with and into Seattle. |
Acquisition | Acquisition On May 16, 2019, the Company entered into a definitive agreement to acquire Cray Inc. ("Cray"), a global supercomputer leader, for $35 per share in cash, in a transaction valued at approximately $1.3 billion , net of cash acquired. The transaction is expected to close by the fourth quarter of HPE’s fiscal year 2019, subject to regulatory approvals and other customary closing conditions. Cray's results of operations will be included within the Hybrid IT segment. |
Arbitration Settlement | Arbitration Settlement On August 15, 2019, an arbitration panel awarded DXC $666 million as well as post-award interest at 3% per annum compounding quarterly until payment. The panel award was made pursuant to a binding arbitration arising from a previously disclosed dispute under the separation and distribution agreement between DXC and HPE. As of July 31, 2019 , the Company had recorded a charge representing the full award settlement in its condensed consolidated financial statements. For more information, see Note 15, "Litigation and Contingencies". |
Basis of Presentation | Basis of Presentation These Condensed Consolidated Financial Statements of the Company were prepared in accordance with United States ("U.S.") Generally Accepted Accounting Principles ("GAAP"). In the opinion of management, the accompanying unaudited Condensed Consolidated Financial Statements of Hewlett Packard Enterprise contain all adjustments, including normal recurring adjustments, necessary to present fairly the Company's financial position as of July 31, 2019 and October 31, 2018 , its results of operations for the three and nine months ended July 31, 2019 and 2018 , its cash flows for the nine months ended July 31, 2019 and 2018 , and its statements of stockholders equity for the three and nine months ended July 31, 2019 and 2018 . The results of operations for the three and nine months ended July 31, 2019 and its cash flows for the nine months ended July 31, 2019 are not necessarily indicative of the results to be expected for the full year. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with the Company's Annual Report on Form 10-K for the fiscal year ended October 31, 2018 , including "Management's Discussion and Analysis of Financial Condition and Results of Operations", "Quantitative and Qualitative Disclosures About Market Risk" and the Consolidated Financial Statements and notes thereto included in Items 7, 7A and 8, respectively, included therein. |
Principles of Consolidation | Principles of Consolidation The accompanying unaudited Condensed Consolidated Financial Statements include the accounts of the Company and all subsidiaries and affiliates in which the Company has a controlling financial interest or is the primary beneficiary. All intercompany transactions and accounts within the consolidated businesses of the Company have been eliminated. The Company accounts for investments in companies over which it has the ability to exercise significant influence but does not hold a controlling interest under the equity method of accounting, and the Company records its proportionate share of income or losses in Earnings (loss) from equity interests in the Condensed Consolidated Statements of Earnings. Non-controlling interests are presented as a separate component within Total stockholders' equity in the Condensed Consolidated Balance Sheets. Net earnings attributable to non-controlling interests are recorded within Interest and other, net in the Condensed Consolidated Statements of Earnings and are not presented separately, as they were not material for any period presented. |
Use of Estimates | Use of Estimates |
Revenue Recognition | Revenue Recognition General As a result of adopting the new revenue recognition standard ("ASC 606"), the Company now accounts for a contract with a customer when both parties have provided written approval and are committed to perform, each party’s rights including payment terms are identified, the contract has commercial substance, and collection of consideration is probable. The Company enters into contracts with customers that may include combinations of products and services, resulting in arrangements containing multiple performance obligations for hardware and software products and/or various services. The Company determines whether each product or service is distinct in order to identify the performance obligations in the contract and allocate the contract transaction price among the distinct performance obligations. Arrangements are distinct based on whether the customer can benefit from the product or service on its own or together with other resources that are readily available and whether the commitment to transfer the product or service to the customer is separately identifiable from other obligations in the contract. The Company classifies its hardware, perpetual software licenses, and software-as-a-service ("SaaS") as distinct performance obligations. Term software licenses represent multiple obligations, which include software licenses and software maintenance. In transactions where the Company delivers hardware or software, it is typically the principal and records revenue and costs of goods sold on a gross basis. Revenue is recognized when, or as, control of promised products or services is transferred to the customer in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those products or services. Variable consideration offered in contracts with customers, partners and distributors may include rebates, volume-based discounts, cooperative marketing, price protection, and other incentive programs. Variable consideration is estimated at contract inception and updated at the end of each reporting period as additional information becomes available and recognized only to the extent that it is probable that a significant reversal of any incremental revenue will not occur. Transfer of control occurs once the customer has the contractual right to use the product, generally upon shipment or once delivery and risk of loss has transferred to the customer. Transfer of control can also occur over time for maintenance and services as the customer receives the benefit over the contract term. The Company's hardware and perpetual software licenses are distinct performance obligations where revenue is recognized upfront upon transfer of control. Term software licenses include multiple performance obligations where the term licenses are recognized upfront upon transfer of control, with the associated software maintenance revenue recognized ratably over the contract term as services and software updates are provided. SaaS arrangements have one distinct performance obligation which is satisfied over time with revenue recognized ratably over the contract term as the customer consumes the services. On its product sales, the Company records consideration from shipping and handling on a gross basis within net product sales. Revenue is recorded net of any associated sales taxes. Significant Judgments The Company allocates the transaction price for the contract among the performance obligations on a relative standalone selling price basis. The standalone selling price ("SSP") is the price at which an entity would sell a promised product or service separately to a customer. The Company establishes SSP for most of its products and services based on the observable price of the products or services when sold separately in similar circumstances to similar customers. When the SSP is not directly observable, the Company estimates SSP based on management judgment by considering available data such as internal margin objectives, pricing strategies, market/competitive conditions, historical profitability data, as well as other observable inputs. The Company establishes SSP ranges for its products and services and reassesses them periodically. Judgment is applied in determining the transaction price as the Company may be required to estimate variable consideration when determining the amount of revenue to recognize. Variable consideration may include various rebates, volume-based discounts, cooperative marketing, price protection, and other incentive programs that are offered to customers, partners and distributors. When determining the amount of revenue to recognize, the Company estimates the expected usage of these programs, applying the expected value or most likely estimate and updates the estimate at each reporting period as actual utilization becomes available. The Company also considers the customers' right of return in determining the transaction price, where applicable. Contract Balances Accounts receivable and contract assets A receivable is a right to consideration in exchange for products or services the Company has transferred to a customer that is unconditional. A contract asset is a right to consideration in exchange for products or services transferred to a customer that is conditional on something other than the passage of time. A receivable is recorded when the right to consideration becomes unconditional. The Company’s contract assets include unbilled receivables which are recorded when the Company recognizes revenue in advance of billings. Unbilled receivables generally relate to services contracts where a service has been performed and control has transferred, but invoicing to the customer is subject to future milestone billings or other contractual payment schedules. The Company classifies unbilled receivables as Accounts receivable. Contract liabilities A contract liability is an obligation to transfer products or services to a customer for which the entity has received consideration, or the amount is due, from the customer. The Company’s contract liabilities primarily consist of deferred revenue. Deferred revenue is recorded when amounts invoiced to customers are in excess of revenue that can be recognized because performance obligations have not been satisfied and control of the promised products or services has not transferred to the customer. Deferred revenue largely represents amounts invoiced in advance for product (hardware/software) support contracts, consulting projects and product sales where revenue cannot be recognized yet. Costs to obtain a contract with a customer The Company capitalizes the incremental costs of obtaining a contract with a customer, primarily sales commissions, if the Company expects to recover those costs. The Company has elected, as a practical expedient, to expense the costs of obtaining a contract as incurred for contracts with terms of one year or less. The typical amortization periods used range from three to six years . The Company periodically reviews the capitalized sales commission costs for possible impairment losses. Capitalized sales commission costs are included in Other current assets and Long-term financing receivables and other assets, and the related amortization expense is included in Selling, general and administrative expense. |
Recent Tax Legislation | Recent Tax Legislation On December 22, 2017, the Tax Cuts and Jobs Act (the “Tax Act”) was enacted into law. The Tax Act included significant changes to the U.S. corporate income tax structure, including a federal corporate rate reduction from 35% to 21% effective January 1, 2018, limitations on the deductibility of interest expense and executive compensation, creation of new minimum taxes such as the Base Erosion Anti-abuse Tax (“BEAT”) and the Global Intangible Low Taxed Income (“GILTI”) tax and the transition of U.S. international taxation from a worldwide tax system to a modified territorial tax system, which resulted in a one-time U.S. tax liability on those earnings which had not previously been repatriated to the U.S. (the “Transition Tax”). In December 2017, the U.S. Securities and Exchange Commission ("SEC") issued Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act ("SAB 118"), which allowed the Company to record provisional amounts during a measurement period not to extend beyond one year of the enactment date, which for the Company ended in the first quarter of fiscal 2019. In accordance with SAB 118, the accounting for the tax effects of the Tax Act was completed based on currently available legislative updates relating to the Tax Act. The Company has elected to treat taxes due on future GILTI inclusions in U.S. taxable income as a current period expense when incurred. For further details, see Note 6, "Taxes on Earnings". |
Recently Adopted Accounting Pronouncements and Recently Enacted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In March 2017, the Financial Accounting Standards Board ("FASB") amended the existing accounting standards for retirement benefits. The amendments require the presentation of the service cost component of net periodic benefit cost in the same income statement line items as other employee compensation costs, unless eligible for capitalization. The other components of net periodic benefit costs will be presented separately from the service cost as non-operating costs. Effective at the beginning of the first quarter of fiscal 2019, in connection with the adoption of the accounting standards update for retirement benefits, the Company reflected these changes retrospectively by transferring its non-service net periodic benefit (credit) cost from operating expense to Other (income) and expense in its Condensed Consolidated Statements of Earnings. The net periodic benefit (credit) cost transferred to Other (income) and expense during the three and nine months ended July 31, 2018 were as follows. Refer to Note 5, “Retirement and Post-Retirement Benefit Plans” for additional information. Three Months Ended Nine Months Ended In millions Cost of products and services $ (14 ) $ (42 ) Research and development (1 ) (3 ) Selling, general and administrative (19 ) (53 ) Restructuring charges and transformation costs 8 8 $ (26 ) $ (90 ) In November 2016, the FASB amended the existing accounting standards for the classification and presentation of restricted cash in the statement of cash flows. The Company adopted the guidance in the first quarter of fiscal 2019, beginning November 1, 2018, using the retrospective method. As a result of adopting this accounting standards update, for the nine months ended July 31, 2018 , the Company included $43 million of restricted cash movement during the period, which was previously reported within cash used in investing activities, and is now reported within Decrease in cash, cash equivalents and restricted cash in the Company's Condensed Consolidated Statement of Cash Flows. In October 2016, the FASB amended the existing accounting standards for income taxes. The amendments require the recognition of the income tax consequences for intra-entity transfers of assets other than inventory when the transfer occurs. Prior to the amendments, current and deferred income taxes for intra-entity asset transfers were not recognized until the asset was sold to an outside party or amortized over time. The Company adopted the guidance in the first quarter of fiscal 2019, beginning November 1, 2018, using the modified retrospective method. The Company recognized $2.3 billion of income taxes as an adjustment to retained earnings in the first nine months of fiscal 2019, which was previously reported as prepaid income taxes and deferred tax assets within Corporate and unallocated assets in the Company's allocation of segment assets. In August 2016, the FASB amended the existing accounting standards for the statement of cash flows. The amendments provide guidance on eight classification issues related to the statement of cash flows. The Company adopted the guidance in the first quarter of fiscal 2019, beginning November 1, 2018, using the retrospective method. For issues that are impracticable to apply retrospectively, the amendments may be applied prospectively as of the earliest date practicable. The application of this accounting standards update did not have an impact on the Condensed Consolidated Statements of Cash Flows. In January 2016, the FASB issued guidance that requires equity investments with readily determinable fair values (other than those accounted for under the equity method or those that result in consolidation of the investee) to be measured at fair value and recognize any changes in fair value in net income. For equity investments without readily determinable fair values, the Company has elected to apply the measurement alternative, under which investments are measured at cost, less impairment, and adjusted for qualifying observable price changes on a prospective basis. The Company adopted the guidance effective November 1, 2018, and there was no impact on the Condensed Consolidated Financial Statements upon adoption. In May 2014, the FASB amended the existing accounting standards for revenue recognition. The Company adopted the new revenue standard in the first quarter of fiscal 2019 using the modified retrospective method of transition applied to contracts that were not completed as of November 1, 2018. Results and related disclosures for the reporting periods beginning after November 1, 2018 are presented under the new revenue standard, while comparative prior period results and related disclosures are not adjusted and continue to be reported in accordance with the historic accounting standard. Refer to the Revenue Recognition section above for accounting policy updates upon the adoption of the new revenue standard, and Note 7, "Balance Sheet Details" for further discussion on the impact of adoption. For disaggregation of revenue, see Note 2, "Segment Information". The following table summarizes the effects of adopting the new revenue standard at November 1, 2018 on the Condensed Consolidated Balance Sheets as an adjustment to the opening balance: Historical Accounting Effect of Adoption As Adjusted In millions Assets Accounts receivable $ 3,263 $ 38 $ 3,301 Inventory 2,447 (14) 2,433 Other current assets 3,280 50 3,330 Long-term financing receivables and other assets 11,359 44 11,403 Subtotal assets $ 20,349 $ 118 $ 20,467 Liabilities Taxes on earnings $ 378 $ 10 $ 388 Deferred revenue 3,177 (36) 3,141 Other accrued liabilities (1) 3,840 52 3,892 Other non-current liabilities 6,885 (30) 6,855 Subtotal liabilities $ 14,280 $ (4 ) $ 14,276 Stockholders' equity Accumulated deficit (1) $ (5,899 ) $ 122 $ (5,777 ) Subtotal stockholders' equity $ (5,899 ) $ 122 $ (5,777 ) Subtotal liabilities and stockholders' equity $ 8,381 $ 118 $ 8,499 (1) Includes an adjustment related to the adoption of ASC 606 that was recorded during the third quarter of fiscal 2019. The application of ASC 606 increased the Company's total net revenue by $ 23 million and $ 41 million for the three and nine months ended July 31, 2019 , respectively, and did not have a material impact to the Company's cost of sales or operating expenses for the three or nine months ended July 31, 2019. As of July 31, 2019, the balance sheet changes attributable to the impact of ASC 606 were immaterial. Recently Enacted Accounting Pronouncements In August 2018, the FASB issued guidance on a customer's accounting for implementation costs incurred in cloud-computing arrangements that are hosted by a vendor. Certain types of implementation costs should be capitalized and amortized over the term of the hosting arrangement. The Company is required to adopt the guidance in the first quarter of fiscal 2021. Early adoption is permitted. The Company is currently evaluating the timing and the impact of these amendments on its Condensed Consolidated Financial Statements. In August 2018, the FASB issued guidance which changes the disclosure requirements for fair value measurements and defined benefit plans. The Company is required to adopt the guidance in the first quarter of fiscal 2021. Early adoption is permitted. As the guidance represents a change to disclosure only, the Company does not expect the guidance to have a material impact on its Condensed Consolidated Financial Statements. In February 2018, the FASB issued guidance that allows companies to reclassify stranded tax effects resulting from the Tax Act, from accumulated other comprehensive income to retained earnings. The guidance also requires certain new disclosures regardless of the election. The Company is required to adopt the guidance in the first quarter of fiscal 2020. Early adoption is permitted. The Company is currently evaluating the timing and the impact of these amendments on its Condensed Consolidated Financial Statements. In August 2017, the FASB amended the existing accounting standards for hedge accounting. The amendments expand an entity’s ability to hedge non-financial and financial risk components and reduce complexity in fair value hedges of interest rate risk. The new guidance eliminates the requirement to separately measure and report hedge ineffectiveness and requires the entire change in the fair value of a hedging instrument to be presented in the same income statement line as the hedged item. The guidance also simplifies certain documentation and assessment requirements and modifies the accounting for components excluded from the assessment of hedge effectiveness. In April 2019, the FASB issued certain clarifications to address partial term fair value hedges, fair value hedge basis adjustments and certain transition requirements. The Company is required to adopt the guidance in the first quarter of fiscal 2020. Early adoption is permitted. The Company is currently evaluating the timing and the impact of these amendments on its Condensed Consolidated Financial Statements. In June 2016, the FASB amended the existing accounting standards for the measurement of credit losses. The amendments require an entity to estimate its lifetime expected credit loss for most financial instruments, including trade and lease receivables, and record an allowance for the portion of the amortized cost the entity does not expect to collect. The estimate of expected credit losses should consider historical information, current information, and reasonable and supportable forecasts, including estimates of prepayments. In April 2019, the FASB further clarified the scope of the credit losses standard and addressed issues related to accrued interest receivable balances, recoveries, variable interest rates and prepayment. In May 2019, the FASB issued further guidance to provide entities with an option to irrevocably elect the fair value option applied on an instrument-by-instrument basis for eligible financial instruments. The Company is required to adopt the guidance in the first quarter of fiscal 2021. Early adoption is permitted beginning in fiscal 2020. The Company is currently evaluating the timing and the impact of these amendments on its Condensed Consolidated Financial Statements. The FASB issued guidance in February 2016, with amendments in 2018 and 2019, which changes the accounting standards for leases. The amendments require lessees to record, at lease inception, a lease liability for the obligation to make lease payments and a right-of-use ("ROU") asset for the right to use the underlying asset for the lease term on their balance sheets. Lessees may elect to not recognize lease liabilities and ROU assets for most leases with terms of 12 months or less. The lease liability is measured at the present value of the lease payments over the lease term. The ROU asset will be based on the liability, adjusted for lease prepayments, lease incentives received, and the lessee's initial direct costs. For finance leases, lease expense will be the sum of interest on the lease obligation and amortization of the ROU asset, resulting in a front-loaded expense pattern. For operating leases, lease expense will generally be recognized on a straight-line basis over the lease term. The amended lessor accounting model is similar to the current model, updated to align with certain changes to the lessee model and the new revenue standard. The current sale-leaseback guidance, including guidance applicable to real estate, is also replaced with a new model for both lessees and lessors. The Company plans to adopt the guidance in the first quarter of fiscal 2020, beginning November 1, 2019, using the transition method whereby prior comparative periods will not be retrospectively presented in the Consolidated Financial Statements. The Company is currently evaluating the impact of these amendments and other available practical expedients on its Condensed Consolidated Financial Statements. In April 2019, the FASB amended its standards on recognizing and measuring financial instruments to address the scope of the guidance, the requirement for remeasurement when using the measurement alternative and certain disclosure requirements. The Company is required to adopt the guidance in the first quarter of fiscal 2021. Early adoption is permitted. The Company is currently evaluating the timing and the impact of these amendments on its Condensed Consolidated Financial Statements. There have been no other significant changes to the Company's accounting policies or recently adopted or enacted accounting pronouncements disclosed in the Company's Annual Report on Form 10-K for the fiscal year ended October 31, 2018 . |
Segment Policy | Segment Policy There have been no significant changes to the Company's segment accounting policies disclosed in the Company's Annual Report on Form 10-K for the fiscal year ended October 31, 2018 , except as described in the 'Segment Realignment' section below. Hewlett Packard Enterprise does not allocate to its segments certain operating expenses, which it manages at the corporate level. These unallocated costs include certain corporate costs and eliminations, stock-based compensation expense related to corporate and certain global functions, acquisition, disposition and other related charges, transformation costs, amortization of intangible assets, restructuring charges, disaster charges and separation costs. |
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 The Company 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. |
Overview and Basis of Present_3
Overview and Basis of Presentation (Tables) | 9 Months Ended |
Jul. 31, 2019 | |
Accounting Policies [Abstract] | |
New Accounting Pronouncements and Changes in Accounting Principles | The following table summarizes the effects of adopting the new revenue standard at November 1, 2018 on the Condensed Consolidated Balance Sheets as an adjustment to the opening balance: Historical Accounting Effect of Adoption As Adjusted In millions Assets Accounts receivable $ 3,263 $ 38 $ 3,301 Inventory 2,447 (14) 2,433 Other current assets 3,280 50 3,330 Long-term financing receivables and other assets 11,359 44 11,403 Subtotal assets $ 20,349 $ 118 $ 20,467 Liabilities Taxes on earnings $ 378 $ 10 $ 388 Deferred revenue 3,177 (36) 3,141 Other accrued liabilities (1) 3,840 52 3,892 Other non-current liabilities 6,885 (30) 6,855 Subtotal liabilities $ 14,280 $ (4 ) $ 14,276 Stockholders' equity Accumulated deficit (1) $ (5,899 ) $ 122 $ (5,777 ) Subtotal stockholders' equity $ (5,899 ) $ 122 $ (5,777 ) Subtotal liabilities and stockholders' equity $ 8,381 $ 118 $ 8,499 (1) Includes an adjustment related to the adoption of ASC 606 that was recorded during the third quarter of fiscal 2019. three and nine months ended July 31, 2018 were as follows. Refer to Note 5, “Retirement and Post-Retirement Benefit Plans” for additional information. Three Months Ended Nine Months Ended In millions Cost of products and services $ (14 ) $ (42 ) Research and development (1 ) (3 ) Selling, general and administrative (19 ) (53 ) Restructuring charges and transformation costs 8 8 $ (26 ) $ (90 ) |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Jul. 31, 2019 | |
Segment Reporting [Abstract] | |
Segment Operating Results from Continuing Operations | Segment Operating Results Hybrid IT Intelligent Edge Financial Corporate Total In millions Three months ended July 31, 2019 Net revenue $ 5,444 $ 758 $ 885 $ 130 $ 7,217 Intersegment net revenue and other 105 4 3 — 112 Total segment net revenue $ 5,549 $ 762 $ 888 $ 130 $ 7,329 Segment earnings (loss) from operations $ 704 $ 37 $ 77 $ (25 ) $ 793 Three months ended July 31, 2018 Net revenue $ 5,925 $ 783 $ 922 $ 134 $ 7,764 Intersegment net revenue and other 184 2 6 — 192 Total segment net revenue $ 6,109 $ 785 $ 928 $ 134 $ 7,956 Segment earnings (loss) from operations $ 624 $ 101 $ 72 $ (25 ) $ 772 Nine months ended July 31, 2019 Net revenue $ 16,745 $ 2,107 $ 2,695 $ 373 $ 21,920 Intersegment net revenue and other 410 7 8 — 425 Total segment net revenue $ 17,155 $ 2,114 $ 2,703 $ 373 $ 22,345 Segment earnings (loss) from operations $ 2,024 $ 66 $ 231 $ (82 ) $ 2,239 Nine months ended July 31, 2018 Net revenue $ 17,649 $ 2,132 $ 2,721 $ 404 $ 22,906 Intersegment net revenue and other 511 15 11 — 537 Total segment net revenue $ 18,160 $ 2,147 $ 2,732 $ 404 $ 23,443 Segment earnings (loss) from operations $ 1,787 $ 191 $ 215 $ (79 ) $ 2,114 |
Reconciliation of Segment Operating Results | The reconciliation of segment operating results to Hewlett Packard Enterprise condensed consolidated results was as follows: Three Months Ended Nine Months Ended 2019 2018 2019 2018 In millions Net Revenue: Total segments $ 7,329 $ 7,956 $ 22,345 $ 23,443 Eliminations of intersegment net revenue and other (112 ) (192 ) (425 ) (537 ) Total Hewlett Packard Enterprise condensed consolidated net revenue $ 7,217 $ 7,764 $ 21,920 $ 22,906 Earnings before taxes: Total segment earnings from operations $ 793 $ 772 $ 2,239 $ 2,114 Unallocated corporate costs and eliminations (65 ) (49 ) (179 ) (169 ) Unallocated stock-based compensation expense (13 ) (14 ) (42 ) (64 ) Amortization of intangible assets (58 ) (72 ) (199 ) (222 ) Restructuring charges — 1 — (14 ) Transformation costs (170 ) (126 ) (302 ) (491 ) Disaster charges — — 7 — Acquisition, disposition and other related charges (563 ) (24 ) (710 ) (70 ) Separation costs — 2 — — Interest and other, net (70 ) (64 ) (139 ) (163 ) Tax indemnification adjustments (134 ) 2 89 (1,342 ) Non-service net periodic benefit credit 12 26 45 90 Earnings from equity interests 3 11 21 23 Total Hewlett Packard Enterprise condensed consolidated (loss) earnings from continuing operations before taxes $ (265 ) $ 465 $ 830 $ (308 ) |
Schedule of Net Revenue by Segment and Business Unit | Net revenue by segment and business unit was as follows: Three Months Ended Nine Months Ended 2019 2018 2019 2018 In millions Hybrid IT Hybrid IT Product Compute $ 3,151 $ 3,569 $ 9,646 $ 10,350 Storage 844 887 2,761 2,747 Total Hybrid IT Product 3,995 4,456 12,407 13,097 HPE Pointnext 1,554 1,653 4,748 5,063 Total Hybrid IT 5,549 6,109 17,155 18,160 Intelligent Edge HPE Aruba Product 668 703 1,842 1,914 HPE Aruba Services 94 82 272 233 Total Intelligent Edge 762 785 2,114 2,147 Financial Services 888 928 2,703 2,732 Corporate Investments 130 134 373 404 Total segment net revenue 7,329 7,956 22,345 23,443 Eliminations of intersegment net revenue and other (112 ) (192 ) (425 ) (537 ) Total Hewlett Packard Enterprise condensed consolidated net revenue (1) $ 7,217 $ 7,764 $ 21,920 $ 22,906 (1) Revenue from leasing arrangements within Financial Services and Eliminations of intersegment net revenue and other are not subject to the new revenue standard. |
Net Revenue by Geographic Areas | The Company’s net revenue by geographic regions was as follows: Three Months Ended July 31, Nine Months Ended July 31, 2019 2018 2019 2018 In millions Americas $ 2,910 $ 3,153 $ 8,582 $ 9,053 Europe, Middle East and Africa 2,614 2,783 8,251 8,407 Asia Pacific and Japan 1,693 1,828 5,087 5,446 Total Hewlett Packard Enterprise condensed consolidated net revenue (1) $ 7,217 $ 7,764 $ 21,920 $ 22,906 (1) Revenue from leasing arrangements within Financial Services and Eliminations of intersegment net revenue and other are not subject to the new revenue standard. |
Restructuring (Tables)
Restructuring (Tables) | 9 Months Ended |
Jul. 31, 2019 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Restructuring Activities | Restructuring activities related to the Company's employees and infrastructure for the 2015 and 2012 Plans are presented in the table below: 2015 Plan 2012 Plan Employee Severance Infrastructure and other Employee Severance and EER Infrastructure and other Total In millions Liability as of October 31, 2018 $ 62 $ 10 $ 11 $ 1 $ 84 Cash payments (25 ) (2 ) (5 ) — (32 ) Liability as of July 31, 2019 $ 37 $ 8 $ 6 $ 1 $ 52 Total costs incurred to date, as of July 31, 2019 $ 751 $ 78 $ 1,268 $ 145 $ 2,242 Total costs expected to be incurred, as of July 31, 2019 $ 751 $ 78 $ 1,268 $ 145 $ 2,242 Employee Infrastructure In millions Liability as of October 31, 2018 $ 291 $ 33 Charges 115 28 Cash payments (209 ) (20 ) Non-cash items (9 ) (9 ) Liability as of July 31, 2019 $ 188 $ 32 Total costs incurred to date, as of July 31, 2019 $ 881 $ 89 Total costs expected to be incurred, as of July 31, 2019 $ 1,200 $ 180 |
HPE Next (Tables)
HPE Next (Tables) | 9 Months Ended |
Jul. 31, 2019 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Related Costs | In association with the HPE Next initiative, during the three and nine months ended July 31, 2019 , the Company incurred $172 million and $310 million of net charges, of which $170 million and $302 million were recorded within Transformation costs, and $2 million and $8 million were recorded within Non-service net periodic benefit credit in the Condensed Consolidated Statements of Earnings, respectively. During the three and nine months ended July 31, 2018, the Company incurred $131 million and $499 million of net charges, of which $126 million and $491 million were recorded within Transformation costs, and $5 million and $8 million were recorded within Non-service net periodic benefit credit, in the Condensed Consolidated Statements of Earnings, respectively. Three months ended July 31, Nine months ended July 31, 2019 2018 2019 2018 In millions Program management (1) $ 3 $ 28 $ 23 $ 82 IT costs 41 38 94 107 Restructuring charges (2) 92 129 143 385 Loss (gain) on real estate sales 8 (77 ) 1 (114 ) Impairment on real estate assets 19 — 19 — Other (3) 9 13 30 39 Total $ 172 $ 131 $ 310 $ 499 (1) Primarily consists of consulting fees and other direct costs attributable to the design and implementation of the HPE Next initiative. (2) For the three and nine months ended July 31, 2019 and 2018, a portion of these costs were recorded in Non-service net periodic benefit credit in the Condensed Consolidated Statements of Earnings as described above. (3) |
Schedule of Restructuring Reserve by Cost | Restructuring activities related to the Company's employees and infrastructure for the 2015 and 2012 Plans are presented in the table below: 2015 Plan 2012 Plan Employee Severance Infrastructure and other Employee Severance and EER Infrastructure and other Total In millions Liability as of October 31, 2018 $ 62 $ 10 $ 11 $ 1 $ 84 Cash payments (25 ) (2 ) (5 ) — (32 ) Liability as of July 31, 2019 $ 37 $ 8 $ 6 $ 1 $ 52 Total costs incurred to date, as of July 31, 2019 $ 751 $ 78 $ 1,268 $ 145 $ 2,242 Total costs expected to be incurred, as of July 31, 2019 $ 751 $ 78 $ 1,268 $ 145 $ 2,242 Employee Infrastructure In millions Liability as of October 31, 2018 $ 291 $ 33 Charges 115 28 Cash payments (209 ) (20 ) Non-cash items (9 ) (9 ) Liability as of July 31, 2019 $ 188 $ 32 Total costs incurred to date, as of July 31, 2019 $ 881 $ 89 Total costs expected to be incurred, as of July 31, 2019 $ 1,200 $ 180 |
Retirement and Post-Retiremen_2
Retirement and Post-Retirement Benefit Plans (Tables) | 9 Months Ended |
Jul. 31, 2019 | |
Retirement Benefits [Abstract] | |
Summary of Net Benefit Cost | The Company's net pension benefit cost for defined benefit plans recognized in the Condensed Consolidated Statements of Earnings for the three and nine months ended July 31, 2019 and 2018 , was as follows: Three months ended July 31, Nine months ended July 31, 2019 2018 2019 2018 In millions Service cost $ 21 $ 26 $ 63 $ 79 Interest cost (1) 54 55 165 168 Expected return on plan assets (1) (126 ) (139 ) (386 ) (423 ) Amortization and deferrals (1) : Actuarial loss 59 52 176 158 Prior service benefit (4 ) (4 ) (12 ) (12 ) Net periodic benefit cost (credit) 4 (10 ) 6 (30 ) Settlement loss (1) 4 9 10 11 Special termination benefits (1) 1 1 2 5 Net benefit cost (credit) $ 9 $ — $ 18 $ (14 ) (1) These non-service components of net periodic benefit cost were included in Non-service net periodic benefit credit in the Condensed Consolidated Statements of Earnings. |
Taxes on Earnings (Tables)
Taxes on Earnings (Tables) | 9 Months Ended |
Jul. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of Deferred Tax Assets and Liabilities | Deferred tax assets and liabilities included in the Condensed Consolidated Balance Sheets were as follows: As of July 31, 2019 October 31, 2018 In millions Deferred tax assets $ 1,657 $ 2,403 Deferred tax liabilities (278 ) (228 ) Deferred tax assets net of deferred tax liabilities $ 1,379 $ 2,175 |
Balance Sheet Details (Tables)
Balance Sheet Details (Tables) | 9 Months Ended |
Jul. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Cash and Cash Equivalents | Cash and cash equivalents As of July 31, 2019 October 31, 2018 In millions Cash and cash equivalents $ 3,693 $ 4,880 Restricted cash 318 204 Cash, cash equivalents and restricted cash $ 4,011 $ 5,084 |
Schedule of Inventory | Inventory As of July 31, 2019 October 31, 2018 In millions Finished goods $ 1,225 $ 1,274 Purchased parts and fabricated assemblies 991 1,173 Total $ 2,216 $ 2,447 |
Schedule of Other Current Assets | Other Current Assets As of July 31, 2019 October 31, 2018 In millions Value-added tax receivables $ 630 $ 811 Short-term tax receivables and prepaid taxes 225 535 Manufacturer and other receivables 619 937 Prepaid and other current assets 832 793 Restricted cash 318 204 Total $ 2,624 $ 3,280 |
Schedule of Property, Plant and Equipment | Property, Plant and Equipment As of July 31, 2019 October 31, 2018 In millions Land $ 293 $ 294 Buildings and leasehold improvements 2,157 2,103 Machinery and equipment, including equipment held for lease 9,460 9,419 11,910 11,816 Accumulated depreciation (5,910 ) (5,678 ) Total $ 6,000 $ 6,138 |
Notes Payable and Short-Term Borrowings | Notes Payable and Short-Term Borrowings As of July 31, 2019 October 31, 2018 In millions Current portion of long-term debt $ 1,180 $ 1,196 FS commercial paper 671 392 Notes payable to banks, lines of credit and other (1) 356 417 Total $ 2,207 $ 2,005 (1) As of July 31, 2019 and October 31, 2018 , notes payable to banks, lines of credit and other includes $228 million and $361 million , respectively, of borrowing associated with FS and its subsidiaries. |
Changes in Aggregate Product Warranty Liabilities | The Company's aggregate product warranty liability as of July 31, 2019 , and changes during the nine months then ended were as follows: Nine Months Ended In millions Balance at beginning of period $ 430 Accruals for warranties issued 178 Adjustments related to pre-existing warranties 6 Settlements made (212 ) Balance at end of period $ 402 |
Summary of Accounts Receivable, Net | A summary of accounts receivable, net, including unbilled receivables was as follows: As of July 31, 2019 October 31, 2018 In millions Accounts receivable, net Accounts receivable $ 2,786 $ 3,117 Unbilled receivables 210 185 Allowance for doubtful accounts (31 ) (39 ) Total $ 2,965 $ 3,263 |
Financing Receivables and Ope_2
Financing Receivables and Operating Leases (Tables) | 9 Months Ended |
Jul. 31, 2019 | |
Leases [Abstract] | |
Components of Financing Receivables | The components of financing receivables were as follows: As of July 31, 2019 October 31, 2018 In millions Minimum lease payments receivable $ 9,009 $ 8,691 Unguaranteed residual value 322 297 Unearned income (765 ) (732 ) Financing receivables, gross 8,566 8,256 Allowance for doubtful accounts (133 ) (120 ) Financing receivables, net 8,433 8,136 Less: current portion (1) (3,567 ) (3,396 ) Amounts due after one year, net (1) $ 4,866 $ 4,740 (1) The Company includes the current portion in Financing receivables, and amounts due after one year, net in Long-term financing receivables and other assets, in the accompanying Condensed Consolidated Balance Sheets. |
Credit Risk Profile of Gross Financing Receivables | The credit risk profile of gross financing receivables, based upon internal risk ratings, was as follows: As of July 31, 2019 October 31, 2018 In millions Risk Rating: Low $ 4,377 $ 4,238 Moderate 3,913 3,805 High 276 213 Total $ 8,566 $ 8,256 |
Allowance for Doubtful Accounts for Financing Receivables | The allowance for doubtful accounts for financing receivables as of July 31, 2019 and October 31, 2018 and the respective changes during the nine and twelve months then ended were as follows: As of July 31, 2019 October 31, 2018 In millions Balance at beginning of period $ 120 $ 86 Provision for doubtful accounts 25 49 Write-offs (12 ) (15 ) Balance at end of period $ 133 $ 120 |
Gross Financing Receivables and Related Allowance Evaluated for Loss | The gross financing receivables and related allowance evaluated for loss were as follows: As of July 31, 2019 October 31, 2018 In millions Gross financing receivables collectively evaluated for loss $ 8,120 $ 7,917 Gross financing receivables individually evaluated for loss (1) 446 339 Total $ 8,566 $ 8,256 Allowance for financing receivables collectively evaluated for loss $ 84 $ 78 Allowance for financing receivables individually evaluated for loss 49 42 Total $ 133 $ 120 (1) Includes billed operating lease receivables and billed and unbilled sales-type and direct-financing lease receivables. |
Summary of the Aging and Non-accrual Status of Gross Financing Receivables | The following table summarizes the aging and non-accrual status of gross financing receivables: As of July 31, 2019 October 31, 2018 In millions Billed: (1) Current 1-30 days $ 319 $ 275 Past due 31-60 days 62 42 Past due 61-90 days 15 13 Past due > 90 days 86 74 Unbilled sales-type and direct-financing lease receivables 8,084 7,852 Total gross financing receivables $ 8,566 $ 8,256 Gross financing receivables on non-accrual status (2) $ 297 $ 226 Gross financing receivables 90 days past due and still accruing interest (2) $ 149 $ 113 (1) Includes billed operating lease receivables and billed sales-type and direct-financing lease receivables. (2) Includes billed operating lease receivables and billed and unbilled sales-type and direct-financing lease receivables. |
Operating Lease Assets Included in Machinery and Equipment | Operating lease assets included in Property, plant and equipment in the Condensed Consolidated Balance Sheets were as follows: As of July 31, 2019 October 31, 2018 In millions Equipment leased to customers $ 7,275 $ 7,290 Accumulated depreciation (3,225 ) (3,078 ) Total $ 4,050 $ 4,212 |
Goodwill (Tables)
Goodwill (Tables) | 9 Months Ended |
Jul. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Allocation and Changes in the Carrying Amount of Goodwill | Goodwill allocated to the Company's reportable segments as of July 31, 2019 and the change in the respective carrying amounts during the nine months then ended were as follows: Hybrid IT Intelligent Edge Financial Services Total In millions Balance at October 31, 2018 (1) (2) $ 15,479 $ 1,914 $ 144 $ 17,537 Goodwill acquired during the period (3) 48 — — 48 Goodwill adjustments 2 — — 2 Balance at July 31, 2019 (2) $ 15,529 $ 1,914 $ 144 $ 17,587 (1) As a result of the organizational realignments effective during the first quarter of fiscal 2019, which are described in detail in Note 2, "Segment Information", goodwill was reclassified to the respective segments as of the beginning of the period using a relative fair value approach. (2) Goodwill is net of an accumulated impairment loss of $88 million related to the Corporate Investments segment which was recorded during the fourth quarter of fiscal 2018. There is no remaining goodwill in the Corporate Investments segment. (3) Goodwill acquired in connection with the acquisition of BlueData. |
Fair Value (Tables)
Fair Value (Tables) | 9 Months Ended |
Jul. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Schedule of Assets and Liabilities Measured at Fair Value on a Recurring Basis | The following table presents the Company's assets and liabilities that are measured at fair value on a recurring basis: As of July 31, 2019 As of October 31, 2018 Fair Value Measured Using Fair Value Measured Using Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total In millions Assets Cash Equivalents and Investments: Time deposits $ — $ 908 $ — $ 908 $ — $ 781 $ — $ 781 Money market funds 609 — — 609 2,340 — — 2,340 Foreign bonds 7 125 — 132 7 124 — 131 Other debt securities — 1 32 33 — — 25 25 Derivative Instruments: Interest rate contracts — 20 — 20 — — — — Foreign exchange contracts — 467 — 467 — 496 — 496 Total assets $ 616 $ 1,521 $ 32 $ 2,169 $ 2,347 $ 1,401 $ 25 $ 3,773 Liabilities Derivative Instruments: Interest rate contracts $ — $ 32 $ — $ 32 $ — $ 353 $ — $ 353 Foreign exchange contracts — 116 — 116 — 117 — 117 Other derivatives — 1 — 1 — 6 — 6 Total liabilities $ — $ 149 $ — $ 149 $ — $ 476 $ — $ 476 |
Financial Instruments (Tables)
Financial Instruments (Tables) | 9 Months Ended |
Jul. 31, 2019 | |
Investments, All Other Investments [Abstract] | |
Cash Equivalents and Available-for-Sale Investments | Cash equivalents and available-for-sale investments were as follows: As of July 31, 2019 As of October 31, 2018 Cost Gross Unrealized Gain Gross Unrealized Loss Fair Value Cost Gross Unrealized Gain Gross Unrealized Loss Fair Value In millions Cash Equivalents: Time deposits $ 908 $ — $ — $ 908 $ 781 $ — $ — $ 781 Money market funds 609 — — 609 2,340 — — 2,340 Total cash equivalents 1,517 — — 1,517 3,121 — — 3,121 Available-for-Sale Investments: Foreign bonds 110 22 — 132 113 18 — 131 Other debt securities 33 — — 33 26 — (1 ) 25 Total available-for-sale investments 143 22 — 165 139 18 (1 ) 156 Total cash equivalents and available-for-sale debt investments $ 1,660 $ 22 $ — $ 1,682 $ 3,260 $ 18 $ (1 ) $ 3,277 |
Contractual Maturities of Investments in Available-for-Sale Debt Securities | Contractual maturities of available-for-sale debt investments were as follows: July 31, 2019 Amortized Cost Fair Value In millions Due in one to five years $ 10 $ 10 Due in more than five years 133 155 $ 143 $ 165 |
Gross Notional and Fair Value of Derivative Instruments in the Condensed Consolidated Balance Sheets | The gross notional and fair value of derivative instruments in the Condensed Consolidated Balance Sheets were as follows: As of July 31, 2019 As of October 31, 2018 Fair Value Fair Value Outstanding Gross Notional Other Current Assets Long-Term Financing Receivables and Other Assets Other Accrued Liabilities Long-Term Other Liabilities Outstanding Gross Notional Other Current Assets Long-Term Financing Receivables and Other Assets Other Accrued Liabilities Long-Term Other Liabilities In millions Derivatives designated as hedging instruments Fair value hedges: Interest rate contracts $ 6,850 $ — $ 20 $ — $ 32 $ 6,850 $ — $ — $ — $ 353 Cash flow hedges: Foreign currency contracts 8,539 218 157 24 23 8,423 270 107 11 15 Net investment hedges: Foreign currency contracts 1,745 25 30 18 18 1,737 32 41 13 11 Total derivatives designated as hedging instruments 17,134 243 207 42 73 17,010 302 148 24 379 Derivatives not designated as hedging instruments Foreign currency contracts 5,206 36 1 26 7 6,780 41 5 55 12 Other derivatives 103 — — 1 — 104 — — 6 — Total derivatives not designated as hedging instruments 5,309 36 1 27 7 6,884 41 5 61 12 Total derivatives $ 22,443 $ 279 $ 208 $ 69 $ 80 $ 23,894 $ 343 $ 153 $ 85 $ 391 |
Offsetting Assets | As of July 31, 2019 and October 31, 2018 , information related to the potential effect of the Company's use of the master netting agreements and collateral security agreements were as follows: As of July 31, 2019 In the Condensed Consolidated Balance Sheets (i) (ii) (iii) = (i)–(ii) (iv) (v) (vi) = (iii)–(iv)–(v) Gross Amounts Not Offset Gross Amount Recognized Gross Amount Offset Net Amount Presented Derivatives Financial Collateral Net Amount In millions Derivative assets $ 487 $ — $ 487 $ 125 $ 316 (1) $ 46 Derivative liabilities $ 149 $ — $ 149 $ 125 $ 5 (2) $ 19 As of October 31, 2018 In the Condensed Consolidated Balance Sheets (i) (ii) (iii) = (i)–(ii) (iv) (v) (vi) = (iii)–(iv)–(v) Gross Amounts Not Offset Gross Amount Recognized Gross Amount Offset Net Amount Presented Derivatives Financial Collateral Net Amount In millions Derivative assets $ 496 $ — $ 496 $ 179 $ 205 (1) $ 112 Derivative liabilities $ 476 $ — $ 476 $ 179 $ 302 (2) $ (5 ) (1) Represents the cash collateral posted by counterparties as of the respective reporting date for the Company's asset position, net of derivative amounts that could be offset, as of, generally, two business days prior to the respective reporting date. (2) Represents the collateral posted by the Company in cash or through the re-use of counterparty cash collateral as of the respective reporting date for the Company's liability position, net of derivative amounts that could be offset, as of, generally, two business days prior to the respective reporting date. As of July 31, 2019 , of the $5 million of collateral posted, $4 million was in cash and $1 million was through re-use of counterparty collateral. As of October 31, 2018 , $302 million of collateral posted was entirely in cash. |
Offsetting Liabilities | As of July 31, 2019 and October 31, 2018 , information related to the potential effect of the Company's use of the master netting agreements and collateral security agreements were as follows: As of July 31, 2019 In the Condensed Consolidated Balance Sheets (i) (ii) (iii) = (i)–(ii) (iv) (v) (vi) = (iii)–(iv)–(v) Gross Amounts Not Offset Gross Amount Recognized Gross Amount Offset Net Amount Presented Derivatives Financial Collateral Net Amount In millions Derivative assets $ 487 $ — $ 487 $ 125 $ 316 (1) $ 46 Derivative liabilities $ 149 $ — $ 149 $ 125 $ 5 (2) $ 19 As of October 31, 2018 In the Condensed Consolidated Balance Sheets (i) (ii) (iii) = (i)–(ii) (iv) (v) (vi) = (iii)–(iv)–(v) Gross Amounts Not Offset Gross Amount Recognized Gross Amount Offset Net Amount Presented Derivatives Financial Collateral Net Amount In millions Derivative assets $ 496 $ — $ 496 $ 179 $ 205 (1) $ 112 Derivative liabilities $ 476 $ — $ 476 $ 179 $ 302 (2) $ (5 ) (1) Represents the cash collateral posted by counterparties as of the respective reporting date for the Company's asset position, net of derivative amounts that could be offset, as of, generally, two business days prior to the respective reporting date. (2) Represents the collateral posted by the Company in cash or through the re-use of counterparty cash collateral as of the respective reporting date for the Company's liability position, net of derivative amounts that could be offset, as of, generally, two business days prior to the respective reporting date. As of July 31, 2019 , of the $5 million of collateral posted, $4 million was in cash and $1 million was through re-use of counterparty collateral. As of October 31, 2018 , $302 million of collateral posted was entirely in cash. |
Pre-tax Effect of Derivative Instruments and Related Hedged Items in a Fair Value Hedging Relationship | The pre-tax effect of derivative instruments and related hedged items in a fair value hedging relationship for the three and nine months ended July 31, 2019 and 2018 were as follows: Gains (Losses) Recognized in Earnings on Derivative and Related Hedged Item Derivative Instrument Location Three months ended July 31, 2019 Nine months ended July 31, 2019 Hedged Item Location Three months ended July 31, 2019 Nine months ended July 31, 2019 In millions In millions Interest rate contracts Interest and other, net $ 123 $ 341 Fixed-rate debt Interest and other, net $ (123 ) $ (341 ) Gains (Losses) Recognized in Earnings on Derivative and Related Hedged Item Derivative Instrument Location Three months ended July 31, 2018 Nine months ended July 31, 2018 Hedged Item Location Three months ended July 31, 2018 Nine months ended July 31, 2018 In millions In millions Interest rate contracts Interest and other, net $ 16 $ (194 ) Fixed-rate debt Interest and other, net $ (16 ) $ 194 |
Pre-tax Effect of Derivative Instruments in Cash Flow and Net Investment Hedging Relationships | The pre-tax effect of derivative instruments in cash flow and net investment hedging relationships for the three and nine months ended July 31, 2019 were as follows: Gains (Losses) Recognized in Other Comprehensive Income ("OCI") on Derivatives (Effective Portion) Gains (Losses) Reclassified from Accumulated OCI Into Earnings (Effective Portion) Three months ended July 31, 2019 Nine months ended July 31, 2019 Location Three months ended July 31, 2019 Nine months ended July 31, 2019 In millions In millions Cash flow hedges: Foreign currency contracts $ 43 $ 102 Net revenue $ 42 $ 168 Foreign currency contracts 20 123 Interest and other, net 16 91 Total cash flow hedges $ 63 $ 225 Net earnings from continuing operations $ 58 $ 259 Net investment hedges: Foreign currency contracts $ (18 ) $ (23 ) Interest and other, net $ — $ — The pre-tax effect of derivative instruments in cash flow and net investment hedging relationships for the three and nine months ended July 31, 2018 was as follows: Gains (Losses) Recognized in Other Comprehensive Income ("OCI") on Derivatives (Effective Portion) Gains (Losses) Reclassified from Accumulated OCI Into Earnings (Effective Portion) Three months ended July 31, 2018 Nine months ended July 31, 2018 Location Three months ended July 31, 2018 Nine months ended July 31, 2018 In millions In millions Cash flow hedges: Foreign currency contracts $ 121 $ 59 Net revenue $ 29 $ (82 ) Foreign currency contracts 28 (9 ) Interest and other, net 14 4 Total cash flow hedges $ 149 $ 50 Net earnings from continuing operations $ 43 $ (78 ) Net investment hedges: Foreign currency contracts $ 57 $ 31 Interest and other, net $ — $ — |
Pre-tax Effect of Derivative Instruments Not Designated as Hedging Instruments on the Condensed Consolidated and Combined Statements of Earnings | The pre-tax effect of derivative instruments not designated as hedging instruments on the Condensed Consolidated Statements of Earnings for the three and nine months ended July 31, 2019 and 2018 was as follows: Gains (Losses) Recognized in Earnings on Derivatives Location Three months ended July 31, 2019 Three months ended July 31, 2018 Nine months ended July 31, 2019 Nine months ended July 31, 2018 In millions Foreign currency contracts Interest and other, net $ 55 $ 233 $ (68 ) $ 104 Other derivatives Interest and other, net (2 ) — 5 — Total $ 53 $ 233 $ (63 ) $ 104 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 9 Months Ended |
Jul. 31, 2019 | |
Equity [Abstract] | |
Taxes Related to Other Comprehensive Income (Loss) | Taxes related to Other Comprehensive Income Three months ended July 31, Nine months ended July 31, 2019 2018 2019 2018 In millions Taxes on change in net unrealized gains (losses) on cash flow hedges: Tax (provision) on net unrealized gains arising during the period $ (6 ) $ (20 ) $ (24 ) $ (6 ) Tax provision (benefit) on net (gains) losses reclassified into earnings 7 5 31 (11 ) 1 (15 ) 7 (17 ) Taxes on change in unrealized components of defined benefit plans: Tax benefit on net unrealized losses arising during the period 5 3 13 2 Tax provision on amortization of net actuarial loss and prior service benefit (3 ) (4 ) (9 ) (10 ) Tax provision on curtailments, settlements and other — (5 ) (7 ) (12 ) 2 (6 ) (3 ) (20 ) Tax (provision) benefit on change in cumulative translation adjustment (1 ) 2 — 3 Tax benefit (provision) on other comprehensive income $ 2 $ (19 ) $ 4 $ (34 ) |
Changes and Reclassifications Related to Other Comprehensive Income (Loss), Net of Taxes | Changes and reclassifications related to Other Comprehensive Income, net of taxes Three months ended July 31, Nine months ended July 31, 2019 2018 2019 2018 In millions Other comprehensive income, net of taxes: Change in net unrealized gains (losses) on available-for-sale securities: Net unrealized gains (losses) arising during the period $ 3 $ (2 ) $ 8 $ (1 ) Gains reclassified into earnings — — (3 ) (9 ) 3 (2 ) 5 (10 ) Change in net unrealized gains (losses) on cash flow hedges: Net unrealized gains arising during the period 57 129 201 44 Net (gains) losses reclassified into earnings (1) (51 ) (38 ) (228 ) 67 6 91 (27 ) 111 Change in unrealized components of defined benefit plans: Net unrealized losses arising during the period (26 ) (22 ) (65 ) (21 ) Amortization of net actuarial loss and prior service benefit (2) 51 43 152 133 Curtailments, settlements and other 5 4 5 (1 ) 30 25 92 111 Change in cumulative translation adjustment (9 ) (38 ) (2 ) (37 ) Other comprehensive income, net of taxes $ 30 $ 76 $ 68 $ 175 (1) For more details on the reclassification of pre-tax net (gains) losses on cash flow hedges into the Condensed Consolidated Statements of Earnings, see Note 11, "Financial Instruments". (2) These components are included in the computation of net pension and post-retirement benefit cost in Note 5, "Retirement and Post-Retirement Benefit Plans". |
Components of Accumulated Other Comprehensive Loss, Net of Taxes | The components of Accumulated other comprehensive loss, net of taxes as of July 31, 2019 , and changes during the nine months ended July 31, 2019 were as follows: Net unrealized gains (losses) on available-for-sale securities Net unrealized gains (losses) on cash flow hedges Unrealized components of defined benefit plans Cumulative translation adjustment Accumulated other comprehensive loss In millions Balance at beginning of period $ 17 $ 106 $ (2,922 ) $ (419 ) $ (3,218 ) Other comprehensive income (loss) before reclassifications 8 201 (65 ) (2 ) 142 Reclassifications of (gains) losses into earnings (3 ) (228 ) 157 — (74 ) Balance at end of period $ 22 $ 79 $ (2,830 ) $ (421 ) $ (3,150 ) |
Net Earnings Per Share (Tables)
Net Earnings Per Share (Tables) | 9 Months Ended |
Jul. 31, 2019 | |
Earnings Per Share [Abstract] | |
Reconciliations of the Numerators and Denominators of the Basic and Diluted Net EPS Calculations | The reconciliations of the numerators and denominators of each of the basic and diluted net EPS calculations were as follows: Three months ended July 31, Nine months ended July 31, 2019 2018 2019 2018 In millions, except per share amounts Numerator: Net (loss) earnings from continuing operations $ (27 ) $ 452 $ 569 $ 2,784 Net loss from discontinued operations — (1 ) — (119 ) Net (loss) earnings $ (27 ) $ 451 $ 569 $ 2,665 Denominator: Weighted-average shares used to compute basic net EPS 1,334 1,513 1,367 1,552 Dilutive effect of employee stock plans — 18 13 26 Weighted-average shares used to compute diluted net EPS 1,334 1,531 1,380 1,578 Basic net (loss) earnings per share: Continuing operations $ (0.02 ) $ 0.30 $ 0.42 $ 1.79 Discontinued operations (1) — — — (0.07 ) Basic net (loss) earnings per share $ (0.02 ) $ 0.30 $ 0.42 $ 1.72 Diluted net (loss) earnings per share: Continuing operations $ (0.02 ) $ 0.29 $ 0.41 $ 1.76 Discontinued operations (1)(2) — — — (0.07 ) Diluted net (loss) earnings per share $ (0.02 ) $ 0.29 $ 0.41 $ 1.69 Anti-dilutive weighted-average stock awards (3) 44 2 4 3 (1) EPS for discontinued operations was calculated by deducting the EPS from continuing operations from the total EPS. (2) U.S. GAAP requires the denominator used in the diluted net EPS calculation for discontinued operations to be the same as that of continuing operations, regardless of net earnings (loss) from continuing operations. (3) The Company excludes shares potentially issuable under employee stock plans that could dilute basic net EPS in the future from the calculation of diluted net earnings (loss) per share, as their effect, if included, would have been anti-dilutive for the periods presented. |
Indemnifications (Tables)
Indemnifications (Tables) | 9 Months Ended |
Jul. 31, 2019 | |
Guarantees and Product Warranties [Abstract] | |
Schedule of Indemnified Litigation Matters and Other Contingencies | As of July 31, 2019 and October 31, 2018 , the Company’s receivable and payable balances related to indemnified litigation matters and other contingencies, and income tax-related indemnification covered by these agreements were as follows: As of July 31, 2019 October 31, 2018 In millions Litigation matters and other contingencies Receivable $ 88 $ 104 Payable $ 57 $ 83 Income tax-related indemnification (1) Net indemnification receivable - long-term (2) $ 266 $ 16 Net indemnification receivable - short-term $ 13 $ 17 Net indemnification payable - long-term $ 9 $ 9 Net indemnification payable - short-term (3) $ 102 $ 26 (1) The actual amount that the Company may receive or pay could vary depending upon the outcome of certain unresolved tax matters, which may not be resolved for several years. (2) For the nine months ended July 31, 2019 , the increase in Net indemnification receivable - long-term was due primarily to the effects of U.S. tax reform on tax attributes related to fiscal periods prior to the Separation. (3) For the nine months ended July 31, 2019 , the increase in Net indemnification payable - short-term was due primarily to the effective settlement of the U.S. federal income tax audit of fiscal years 2013 through 2015 for HP Inc. for which the Company was joint and severally liable and for which the Company was partially indemnified by HP Inc. under the Tax Matters Agreement. |
Overview and Basis of Present_4
Overview and Basis of Presentation - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | Aug. 15, 2019 | May 16, 2019 | Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2019 | Jul. 31, 2018 |
Segment Reporting Information [Line Items] | ||||||
Net loss from discontinued operations | $ 0 | $ 1 | $ 0 | $ 119 | ||
Change in restricted cash | 43 | |||||
Total net revenue | 7,217 | $ 7,764 | 21,920 | $ 22,906 | ||
Subsequent Event | Cross-Indemnifications | Everett SpinCo, Inc. | Settled Litigation | ||||||
Segment Reporting Information [Line Items] | ||||||
Amount awarded to other party | $ 666 | |||||
Post-award interest rate | 3.00% | |||||
Accounting Standards Update 2016-16 | ||||||
Segment Reporting Information [Line Items] | ||||||
Effects of adoption of accounting standard updates | $ 2,300 | $ 2,300 | ||||
Minimum | ||||||
Segment Reporting Information [Line Items] | ||||||
Capitalized contract cost amortization period | 3 years | 3 years | ||||
Maximum | ||||||
Segment Reporting Information [Line Items] | ||||||
Capitalized contract cost amortization period | 6 years | 6 years | ||||
Cray Inc. | ||||||
Segment Reporting Information [Line Items] | ||||||
Share price paid (in usd per share) | $ 35 | |||||
Consideration transferred | $ 1,300 | |||||
Effect of Adoption | ||||||
Segment Reporting Information [Line Items] | ||||||
Total net revenue | $ 23 | $ 41 |
Overview and Basis of Present_5
Overview and Basis of Presentation - Changes to Net Periodic Benefit Cost (Details) - Accounting Standards Update 2017-07 - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended |
Jul. 31, 2018 | Jul. 31, 2018 | |
Other (Income) and Expense | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Net benefit cost (credit) | $ (26) | $ (90) |
Cost of products and services | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Net benefit cost (credit) | (14) | (42) |
Research and development | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Net benefit cost (credit) | (1) | (3) |
Selling, general and administrative | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Net benefit cost (credit) | (19) | (53) |
Restructuring charges and transformation costs | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Net benefit cost (credit) | $ 8 | $ 8 |
Overview and Basis of Present_6
Overview and Basis of Presentation - Effects of New Accounting Standards (Details) - USD ($) $ in Millions | Jul. 31, 2019 | Nov. 01, 2018 | Oct. 31, 2018 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Accounts receivable | $ 2,965 | $ 3,263 | |
Inventory | 2,216 | 2,447 | |
Other current assets | 2,624 | 3,280 | |
Long-term financing receivables and other assets | 9,092 | 11,359 | |
Total assets | 50,760 | 55,493 | |
Taxes on earnings | 160 | 378 | |
Deferred revenue | 3,225 | 3,177 | |
Other accrued liabilities | 4,686 | 3,840 | |
Other non-current liabilities | 5,569 | 6,885 | |
Accumulated deficit | (7,959) | (5,899) | |
Total HPE stockholders' equity | 17,533 | 21,239 | |
Total liabilities and stockholders' equity | $ 50,760 | 55,493 | |
Accounting Standards Update 2014-09 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Accounts receivable | $ 3,301 | ||
Inventory | 2,433 | ||
Other current assets | 3,330 | ||
Long-term financing receivables and other assets | 11,403 | ||
Total assets | 20,467 | ||
Taxes on earnings | 388 | ||
Deferred revenue | 3,141 | ||
Other accrued liabilities | 3,892 | ||
Other non-current liabilities | 6,855 | ||
Subtotal liabilities | 14,276 | ||
Accumulated deficit | (5,777) | ||
Total HPE stockholders' equity | (5,777) | ||
Total liabilities and stockholders' equity | 8,499 | ||
Accounting Standards Update 2014-09 | Historical Accounting Method | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Accounts receivable | 3,263 | ||
Inventory | 2,447 | ||
Other current assets | 3,280 | ||
Long-term financing receivables and other assets | 11,359 | ||
Total assets | 20,349 | ||
Taxes on earnings | 378 | ||
Deferred revenue | 3,177 | ||
Other accrued liabilities | 3,840 | ||
Other non-current liabilities | 6,885 | ||
Subtotal liabilities | 14,280 | ||
Accumulated deficit | (5,899) | ||
Total HPE stockholders' equity | (5,899) | ||
Total liabilities and stockholders' equity | $ 8,381 | ||
Accounting Standards Update 2014-09 | Effect of Adoption | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Accounts receivable | 38 | ||
Inventory | (14) | ||
Other current assets | 50 | ||
Long-term financing receivables and other assets | 44 | ||
Total assets | 118 | ||
Taxes on earnings | 10 | ||
Deferred revenue | (36) | ||
Other accrued liabilities | 52 | ||
Other non-current liabilities | (30) | ||
Subtotal liabilities | (4) | ||
Accumulated deficit | 122 | ||
Total HPE stockholders' equity | 122 | ||
Total liabilities and stockholders' equity | $ 118 |
Segment Information - Narrative
Segment Information - Narrative (Details) | 9 Months Ended |
Jul. 31, 2019segment | |
Segment Reporting [Abstract] | |
Number of segments | 4 |
Segment Information - Segment O
Segment Information - Segment Operating Results from Continuing Operations (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2019 | Jul. 31, 2018 | |
Segment Reporting Information [Line Items] | ||||
Net revenue | $ 7,217 | $ 7,764 | $ 21,920 | $ 22,906 |
Segment earnings (loss) from operations | (76) | 490 | 814 | 1,084 |
Intersegment net revenue and other | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | (112) | (192) | (425) | (537) |
Operating Segment | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | 7,329 | 7,956 | 22,345 | 23,443 |
Segment earnings (loss) from operations | 793 | 772 | 2,239 | 2,114 |
Hybrid IT | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | 5,444 | 5,925 | 16,745 | 17,649 |
Hybrid IT | Intersegment net revenue and other | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | (105) | (184) | (410) | (511) |
Hybrid IT | Operating Segment | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | 5,549 | 6,109 | 17,155 | 18,160 |
Segment earnings (loss) from operations | 704 | 624 | 2,024 | 1,787 |
Intelligent Edge | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | 758 | 783 | 2,107 | 2,132 |
Intelligent Edge | Intersegment net revenue and other | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | (4) | (2) | (7) | (15) |
Intelligent Edge | Operating Segment | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | 762 | 785 | 2,114 | 2,147 |
Segment earnings (loss) from operations | 37 | 101 | 66 | 191 |
Financial Services | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | 885 | 922 | 2,695 | 2,721 |
Financial Services | Intersegment net revenue and other | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | (3) | (6) | (8) | (11) |
Financial Services | Operating Segment | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | 888 | 928 | 2,703 | 2,732 |
Segment earnings (loss) from operations | 77 | 72 | 231 | 215 |
Corporate Investments | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | 130 | 134 | 373 | 404 |
Corporate Investments | Intersegment net revenue and other | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | 0 | 0 | 0 | 0 |
Corporate Investments | Operating Segment | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | 130 | 134 | 373 | 404 |
Segment earnings (loss) from operations | $ (25) | $ (25) | $ (82) | $ (79) |
Segment Information - Reconcili
Segment Information - Reconciliation of Segment Operating Results (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2019 | Jul. 31, 2018 | |
Net revenue: | ||||
Net revenue | $ 7,217 | $ 7,764 | $ 21,920 | $ 22,906 |
Earnings before taxes: | ||||
Total segment earnings from operations | (76) | 490 | 814 | 1,084 |
Amortization of intangible assets | (58) | (72) | (199) | (222) |
Restructuring charges | 0 | 1 | 0 | (14) |
Transformation costs | (170) | (126) | (302) | (491) |
Disaster charges | 0 | 0 | 7 | 0 |
Acquisition and other related charges | (563) | (24) | (710) | (70) |
Separation costs | 0 | 2 | 0 | 0 |
Interest and other, net | (70) | (64) | (139) | (163) |
Tax indemnification adjustments | (134) | 2 | 89 | (1,342) |
Non-service net periodic benefit credit | 12 | 26 | 45 | 90 |
Earnings from equity interests | 3 | 11 | 21 | 23 |
(Loss) earnings from continuing operations before taxes | (265) | 465 | 830 | (308) |
Operating Segment | ||||
Net revenue: | ||||
Net revenue | 7,329 | 7,956 | 22,345 | 23,443 |
Earnings before taxes: | ||||
Total segment earnings from operations | 793 | 772 | 2,239 | 2,114 |
Elimination of intersegment net revenue and other | ||||
Net revenue: | ||||
Net revenue | (112) | (192) | (425) | (537) |
Segment Reconciling Items | ||||
Earnings before taxes: | ||||
Unallocated corporate costs and eliminations | (65) | (49) | (179) | (169) |
Unallocated stock-based compensation expense | (13) | (14) | (42) | (64) |
Amortization of intangible assets | (58) | (72) | (199) | (222) |
Restructuring charges | 0 | 1 | 0 | (14) |
Transformation costs | (170) | (126) | (302) | (491) |
Disaster charges | 0 | 0 | 7 | 0 |
Acquisition and other related charges | (563) | (24) | (710) | (70) |
Separation costs | 0 | 2 | 0 | 0 |
Interest and other, net | (70) | (64) | (139) | (163) |
Tax indemnification adjustments | (134) | 2 | 89 | (1,342) |
Non-service net periodic benefit credit | 12 | 26 | 45 | 90 |
Earnings from equity interests | $ 3 | $ 11 | $ 21 | $ 23 |
Segment Information - Schedule
Segment Information - Schedule of Net Revenue by Segment and Business Unit (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2019 | Jul. 31, 2018 | |
Segment Reporting Information [Line Items] | ||||
Net revenue | $ 7,217 | $ 7,764 | $ 21,920 | $ 22,906 |
Products | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | 4,508 | 4,944 | 13,709 | 14,414 |
Services | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | 2,595 | 2,711 | 7,869 | 8,160 |
Hybrid IT | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | 5,444 | 5,925 | 16,745 | 17,649 |
Intelligent Edge | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | 758 | 783 | 2,107 | 2,132 |
Financial Services | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | 885 | 922 | 2,695 | 2,721 |
Corporate Investments | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | 130 | 134 | 373 | 404 |
Operating Segment | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | 7,329 | 7,956 | 22,345 | 23,443 |
Operating Segment | Hybrid IT | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | 5,549 | 6,109 | 17,155 | 18,160 |
Operating Segment | Hybrid IT | Hybrid IT Product | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | 3,995 | 4,456 | 12,407 | 13,097 |
Operating Segment | Hybrid IT | Hybrid IT Product | Compute | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | 3,151 | 3,569 | 9,646 | 10,350 |
Operating Segment | Hybrid IT | Hybrid IT Product | Storage | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | 844 | 887 | 2,761 | 2,747 |
Operating Segment | Hybrid IT | HPE Pointnext | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | 1,554 | 1,653 | 4,748 | 5,063 |
Operating Segment | Intelligent Edge | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | 762 | 785 | 2,114 | 2,147 |
Operating Segment | Intelligent Edge | Products | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | 668 | 703 | 1,842 | 1,914 |
Operating Segment | Intelligent Edge | Services | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | 94 | 82 | 272 | 233 |
Operating Segment | Financial Services | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | 888 | 928 | 2,703 | 2,732 |
Operating Segment | Corporate Investments | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | 130 | 134 | 373 | 404 |
Elimination of intersegment net revenue and other | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | (112) | (192) | (425) | (537) |
Elimination of intersegment net revenue and other | Hybrid IT | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | (105) | (184) | (410) | (511) |
Elimination of intersegment net revenue and other | Intelligent Edge | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | (4) | (2) | (7) | (15) |
Elimination of intersegment net revenue and other | Financial Services | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | (3) | (6) | (8) | (11) |
Elimination of intersegment net revenue and other | Corporate Investments | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | $ 0 | $ 0 | $ 0 | $ 0 |
Segment Information - Revenue b
Segment Information - Revenue by Geographic Region (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2019 | Jul. 31, 2018 | |
Segment Reporting Information [Line Items] | ||||
Total net revenue | $ 7,217 | $ 7,764 | $ 21,920 | $ 22,906 |
Americas | ||||
Segment Reporting Information [Line Items] | ||||
Total net revenue | 2,910 | 3,153 | 8,582 | 9,053 |
Europe, Middle East and Africa | ||||
Segment Reporting Information [Line Items] | ||||
Total net revenue | 2,614 | 2,783 | 8,251 | 8,407 |
Asia Pacific and Japan | ||||
Segment Reporting Information [Line Items] | ||||
Total net revenue | $ 1,693 | $ 1,828 | $ 5,087 | $ 5,446 |
Restructuring - Narrative (Deta
Restructuring - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2019 | Jul. 31, 2018 | Oct. 31, 2018 | |
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring charges | $ 0 | $ 1 | $ 0 | $ (14) | |
Current restructuring liability reported in Accrued restructuring | 223 | 223 | $ 294 | ||
Non-current restructuring liability reported in Other liabilities | 19 | 19 | 31 | ||
Restructuring Plan All | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Current restructuring liability reported in Accrued restructuring | $ 33 | $ 33 | $ 53 |
Restructuring - Schedule of Res
Restructuring - Schedule of Restructuring Activities (Details) $ in Millions | 9 Months Ended |
Jul. 31, 2019USD ($) | |
Restructuring Reserve | |
Balance at the beginning of the period | $ 84 |
Cash payments | (32) |
Balance at the end of the period | 52 |
Total costs incurred to date, as of July 31, 2019 | 2,242 |
Total costs expected to be incurred, as of July 31, 2019 | 2,242 |
Employee Severance | 2015 Plan | |
Restructuring Reserve | |
Balance at the beginning of the period | 62 |
Cash payments | (25) |
Balance at the end of the period | 37 |
Total costs incurred to date, as of July 31, 2019 | 751 |
Total costs expected to be incurred, as of July 31, 2019 | 751 |
Infrastructure and other | 2015 Plan | |
Restructuring Reserve | |
Balance at the beginning of the period | 10 |
Cash payments | (2) |
Balance at the end of the period | 8 |
Total costs incurred to date, as of July 31, 2019 | 78 |
Total costs expected to be incurred, as of July 31, 2019 | 78 |
Infrastructure and other | 2012 Plan | |
Restructuring Reserve | |
Balance at the beginning of the period | 1 |
Cash payments | 0 |
Balance at the end of the period | 1 |
Total costs incurred to date, as of July 31, 2019 | 145 |
Total costs expected to be incurred, as of July 31, 2019 | 145 |
Employee Severance and EER | 2012 Plan | |
Restructuring Reserve | |
Balance at the beginning of the period | 11 |
Cash payments | (5) |
Balance at the end of the period | 6 |
Total costs incurred to date, as of July 31, 2019 | 1,268 |
Total costs expected to be incurred, as of July 31, 2019 | $ 1,268 |
HPE Next - Narrative (Details)
HPE Next - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2019 | Jul. 31, 2018 | Oct. 31, 2018 | |
Restructuring Cost and Reserve [Line Items] | |||||
Transformation costs | $ 170 | $ 126 | $ 302 | $ 491 | |
Current restructuring liability reported in Accrued restructuring | 223 | 223 | $ 294 | ||
Long-term portion of restructuring reserve, recorded in Other liabilities | 19 | 19 | 31 | ||
HPE Next | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Transformation costs | 172 | 131 | 310 | 499 | |
Current restructuring liability reported in Accrued restructuring | 190 | 190 | 241 | ||
Long-term portion of restructuring reserve, recorded in Other liabilities | 30 | 30 | $ 83 | ||
Transformation Costs | HPE Next | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Transformation costs | 170 | 126 | 302 | 491 | |
Non-Service Net Periodic Benefit Credit | HPE Next | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Transformation costs | $ 2 | $ 5 | $ 8 | $ 8 |
HPE Next - Transformation Costs
HPE Next - Transformation Costs (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2019 | Jul. 31, 2018 | |
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | $ 0 | $ (1) | $ 0 | $ 14 |
Total | 170 | 126 | 302 | 491 |
HPE Next | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Program management | 3 | 28 | 23 | 82 |
IT costs | 41 | 38 | 94 | 107 |
Restructuring charges | 92 | 129 | 143 | 385 |
Loss (gain) on real estate sales | 8 | (77) | 1 | (114) |
Impairment on real estate assets | 19 | 0 | 19 | 0 |
Other | 9 | 13 | 30 | 39 |
Total | $ 172 | $ 131 | $ 310 | $ 499 |
HPE Next - Schedule of Restruct
HPE Next - Schedule of Restructuring Activity (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2019 | Jul. 31, 2018 | |
Restructuring Reserve | ||||
Balance at the beginning of the period | $ 84 | |||
Charges | $ 0 | $ (1) | 0 | $ 14 |
Cash payments | (32) | |||
Balance at the end of the period | 52 | 52 | ||
Total costs incurred to date, as of July 31, 2019 | 2,242 | 2,242 | ||
HPE Next | ||||
Restructuring Reserve | ||||
Charges | 92 | $ 129 | 143 | $ 385 |
HPE Next | Employee Severance | ||||
Restructuring Reserve | ||||
Balance at the beginning of the period | 291 | |||
Charges | 115 | |||
Cash payments | (209) | |||
Non-cash items | (9) | |||
Balance at the end of the period | 188 | 188 | ||
Total costs incurred to date, as of July 31, 2019 | 881 | 881 | ||
Total costs expected to be incurred, as of July 31, 2019 | 1,200 | 1,200 | ||
HPE Next | Infrastructure and other | ||||
Restructuring Reserve | ||||
Balance at the beginning of the period | 33 | |||
Charges | 28 | |||
Cash payments | (20) | |||
Non-cash items | (9) | |||
Balance at the end of the period | 32 | 32 | ||
Total costs incurred to date, as of July 31, 2019 | 89 | 89 | ||
Total costs expected to be incurred, as of July 31, 2019 | $ 180 | $ 180 |
Retirement and Post-Retiremen_3
Retirement and Post-Retirement Benefit Plans (Details) - Benefit Plans - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2019 | Jul. 31, 2018 | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Service cost | $ 21 | $ 26 | $ 63 | $ 79 |
Interest cost | 54 | 55 | 165 | 168 |
Expected return on plan assets | (126) | (139) | (386) | (423) |
Amortization and deferrals: | ||||
Actuarial loss | 59 | 52 | 176 | 158 |
Prior service benefit | (4) | (4) | (12) | (12) |
Net periodic benefit cost (credit) | 4 | (10) | 6 | (30) |
Settlement loss | 4 | 9 | 10 | 11 |
Special termination benefits | 1 | 1 | 2 | 5 |
Net benefit cost (credit) | $ 9 | $ 0 | $ 18 | $ (14) |
Taxes on Earnings - Narrative (
Taxes on Earnings - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Jul. 31, 2019 | Jan. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2019 | Jul. 31, 2018 | Oct. 31, 2018 | |
Income Tax Examination [Line Items] | ||||||
Effective tax rate (as a percent) | 89.80% | 2.80% | 31.40% | 1003.90% | ||
Net income tax charges (benefits) | $ (303) | $ (68) | $ 80 | $ (3,300) | ||
Pre-Separation tax matters | 308 | 264 | 2,000 | |||
Transformation costs, acquisition of business, disposition and other related charges | 18 | 75 | ||||
Increase in unrecognized tax benefits from separation activities | 19 | 19 | ||||
Release of non-U.S. valuation allowances on deferred tax assets | 38 | |||||
Income tax benefit from U.S. tax reform | 33 | 713 | ||||
Net excess tax benefits related to stock compensation | 26 | 68 | ||||
Tax indemnification amount | $ 7 | |||||
Foreign tax credit | 38 | |||||
Benefit from liquidation of business | 203 | |||||
Income tax benefit on restructuring charges, separation costs, transformation costs and acquisition and other related charges | 74 | |||||
Additional tax charge | $ 426 | |||||
Transition tax | 7 | |||||
Withholding tax charges | 37 | 40 | ||||
Unrecognized tax benefits | 2,600 | 2,600 | $ 8,800 | |||
Unrecognized tax benefits that would affect effective tax rate if realized | 800 | 800 | 1,100 | |||
Decrease in unrecognized tax benefits resulting from settlements with taxing authorities | 6,200 | |||||
Accrued income tax for interest and penalties | 130 | $ 130 | $ 142 | |||
Likelihood of no resolution period | 12 months | |||||
Reasonably possible reduction in existing unrecognized tax benefits within the next 12 months | 40 | $ 40 | ||||
Likelihood of conclusion period for certain federal, foreign and state tax issues | 12 months | |||||
Significant change in unrecognized tax benefits that would impact effective tax rate | 7 | $ 7 | ||||
Domestic and State and Local Jurisdictions [Member] | ||||||
Income Tax Examination [Line Items] | ||||||
Income tax charges related to change in valuation allowances | $ 365 | |||||
Domestic Tax Authority [Member] | ||||||
Income Tax Examination [Line Items] | ||||||
Valuation allowance of deferred tax assets | 438 | |||||
State and Local Jurisdiction [Member] | ||||||
Income Tax Examination [Line Items] | ||||||
Income tax charges related to change in valuation allowances | $ 14 | |||||
Valuation allowance of deferred tax assets | $ 56 | |||||
Everett SpinCo | ||||||
Income Tax Examination [Line Items] | ||||||
Foreign tax credit | $ 228 |
Taxes on Earnings - Schedule of
Taxes on Earnings - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Millions | Jul. 31, 2019 | Oct. 31, 2018 |
Income Tax Disclosure [Abstract] | ||
Deferred tax assets | $ 1,657 | $ 2,403 |
Deferred tax liabilities | (278) | (228) |
Deferred tax assets net of deferred tax liabilities | $ 1,379 | $ 2,175 |
Balance Sheet Details - Schedul
Balance Sheet Details - Schedule of Cash and Cash Equivalents (Details) - USD ($) $ in Millions | Jul. 31, 2019 | Oct. 31, 2018 | Jul. 31, 2018 | Oct. 31, 2017 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Cash and cash equivalents | $ 3,693 | $ 4,880 | ||
Restricted cash | 318 | 204 | ||
Cash, cash equivalents and restricted cash | $ 4,011 | $ 5,084 | $ 5,249 | $ 9,592 |
Balance Sheet Details - Sched_2
Balance Sheet Details - Schedule of Inventory (Details) - USD ($) $ in Millions | Jul. 31, 2019 | Oct. 31, 2018 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Finished goods | $ 1,225 | $ 1,274 |
Purchased parts and fabricated assemblies | 991 | 1,173 |
Total | $ 2,216 | $ 2,447 |
Balance Sheet Details - Sched_3
Balance Sheet Details - Schedule of Other Current Assets (Details) - USD ($) $ in Millions | Jul. 31, 2019 | Oct. 31, 2018 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Value-added tax receivables | $ 630 | $ 811 |
Short-term tax receivables and prepaid taxes | 225 | 535 |
Manufacturer and other receivables | 619 | 937 |
Prepaid and other current assets | 832 | 793 |
Restricted cash | 318 | 204 |
Total | $ 2,624 | $ 3,280 |
Balance Sheet Details - Sched_4
Balance Sheet Details - Schedule of Property, Plant and Equipment and Narrative (Details) - USD ($) $ in Millions | Jul. 31, 2019 | Oct. 31, 2018 |
Property, Plant and Equipment, Net | ||
Property, plant and equipment, gross | $ 11,910 | $ 11,816 |
Accumulated depreciation | (5,910) | (5,678) |
Total | 6,000 | 6,138 |
Land | ||
Property, Plant and Equipment, Net | ||
Property, plant and equipment, gross | 293 | 294 |
Buildings and leasehold improvements | ||
Property, Plant and Equipment, Net | ||
Property, plant and equipment, gross | 2,157 | 2,103 |
Machinery and equipment, including equipment held for lease | ||
Property, Plant and Equipment, Net | ||
Property, plant and equipment, gross | $ 9,460 | $ 9,419 |
Balance Sheet Details - Notes P
Balance Sheet Details - Notes Payable and Short-Term Borrowings (Details) - USD ($) $ in Millions | Jul. 31, 2019 | Oct. 31, 2018 |
Long-term debt | ||
Current portion of long-term debt | $ 1,180 | $ 1,196 |
FS commercial paper | 671 | 392 |
Notes payable to banks, lines of credit and other | 356 | 417 |
Total | 2,207 | 2,005 |
Financial Services | ||
Long-term debt | ||
Notes payable to banks, lines of credit and other | $ 228 | $ 361 |
Balance Sheet Details - Changes
Balance Sheet Details - Changes in Aggregate Product Warranty Liabilities (Details) $ in Millions | 9 Months Ended |
Jul. 31, 2019USD ($) | |
Changes in aggregated product warranty liabilities | |
Balance at beginning of period | $ 430 |
Accruals for warranties issued | 178 |
Adjustments related to pre-existing warranties | 6 |
Settlements made | (212) |
Balance at end of period | $ 402 |
Balance Sheet Details - Summary
Balance Sheet Details - Summary of Accounts Receivable, Net (Details) - USD ($) $ in Millions | Jul. 31, 2019 | Oct. 31, 2018 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accounts receivable | $ 2,786 | $ 3,117 |
Unbilled receivables | 210 | 185 |
Allowance for doubtful accounts | (31) | (39) |
Total | $ 2,965 | $ 3,263 |
Balance Sheet Details - Narrati
Balance Sheet Details - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |
Jul. 31, 2019 | Jul. 31, 2019 | Oct. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Contract liabilities | $ 5,900 | $ 5,900 | $ 5,800 |
Deferred revenue for financing activities | 96 | 96 | $ 82 |
Unearned revenue recognized | 5,100 | ||
Unsatisfied performance obligations | 5,900 | 5,900 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||
Current portion of capitalized costs | 46 | 46 | |
Non-current portion of capitalized costs | 69 | 69 | |
Amortization of capitalized costs to obtain a contract | $ 12 | $ 34 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-08-01 | |||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||
Unsatisfied performance obligation expected to be recognized over the remainder of the year | 22.00% | 22.00% |
Financing Receivables and Ope_3
Financing Receivables and Operating Leases - Narrative (Details) - USD ($) $ in Millions | 9 Months Ended | |
Jul. 31, 2019 | Jul. 31, 2018 | |
Leases [Abstract] | ||
Financing receivable term, low end of range | 2 years | |
Financing receivable term, high end of range | 5 years | |
Financing receivable sold | $ 153 | $ 127 |
Financing Receivables and Ope_4
Financing Receivables and Operating Leases - Components of Financing Receivables (Details) - USD ($) $ in Millions | Jul. 31, 2019 | Oct. 31, 2018 | Oct. 31, 2017 |
Leases [Abstract] | |||
Minimum lease payments receivable | $ 9,009 | $ 8,691 | |
Unguaranteed residual value | 322 | 297 | |
Unearned income | (765) | (732) | |
Financing receivables, gross | 8,566 | 8,256 | |
Allowance for doubtful accounts | (133) | (120) | $ (86) |
Financing receivables, net | 8,433 | 8,136 | |
Less: current portion | (3,567) | (3,396) | |
Amounts due after one year, net | $ 4,866 | $ 4,740 |
Financing Receivables and Ope_5
Financing Receivables and Operating Leases - Credit Risk Profile of Gross Financing Receivables (Details) - USD ($) $ in Millions | Jul. 31, 2019 | Oct. 31, 2018 |
Gross financing receivables | ||
Gross financing receivables | $ 8,566 | $ 8,256 |
Low | ||
Gross financing receivables | ||
Gross financing receivables | 4,377 | 4,238 |
Moderate | ||
Gross financing receivables | ||
Gross financing receivables | 3,913 | 3,805 |
High | ||
Gross financing receivables | ||
Gross financing receivables | $ 276 | $ 213 |
Financing Receivables and Ope_6
Financing Receivables and Operating Leases - Allowance for Doubtful Accounts for Financing Receivables (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended |
Jul. 31, 2019 | Oct. 31, 2018 | |
Allowance for doubtful accounts | ||
Balance at beginning of period | $ 120 | $ 86 |
Provision for doubtful accounts | 25 | 49 |
Write-offs | (12) | (15) |
Balance at end of period | $ 133 | $ 120 |
Financing Receivables and Ope_7
Financing Receivables and Operating Leases - Gross Financing Receivables and Related Allowance Evaluated for Loss (Details) - USD ($) $ in Millions | Jul. 31, 2019 | Oct. 31, 2018 | Oct. 31, 2017 |
Leases [Abstract] | |||
Gross financing receivables collectively evaluated for loss | $ 8,120 | $ 7,917 | |
Gross financing receivables individually evaluated for loss(1) | 446 | 339 | |
Financing receivables, gross | 8,566 | 8,256 | |
Allowance for financing receivables collectively evaluated for loss | 84 | 78 | |
Allowance for financing receivables individually evaluated for loss | 49 | 42 | |
Total | $ 133 | $ 120 | $ 86 |
Financing Receivables and Ope_8
Financing Receivables and Operating Leases - Summary of the Aging and Non-accrual Status of Gross Financing Receivables (Details) - USD ($) $ in Millions | Jul. 31, 2019 | Oct. 31, 2018 |
Billed: | ||
Current 1-30 days | $ 319 | $ 275 |
Past due 31-60 days | 62 | 42 |
Past due 61-90 days | 15 | 13 |
Past due 90 days | 86 | 74 |
Unbilled sales-type and direct-financing lease receivables | 8,084 | 7,852 |
Financing receivables, gross | 8,566 | 8,256 |
Gross financing receivables on non-accrual status | 297 | 226 |
Gross financing receivables 90 days past due and still accruing interest | $ 149 | $ 113 |
Financing Receivables and Ope_9
Financing Receivables and Operating Leases - Operating Lease Assets Included in Machinery and Equipment (Details) - USD ($) $ in Millions | Jul. 31, 2019 | Oct. 31, 2018 |
Leases [Abstract] | ||
Equipment leased to customers | $ 7,275 | $ 7,290 |
Accumulated depreciation | (3,225) | (3,078) |
Total | $ 4,050 | $ 4,212 |
Goodwill (Details)
Goodwill (Details) | 9 Months Ended |
Jul. 31, 2019USD ($) | |
Goodwill [Roll Forward] | |
Goodwill beginning balance | $ 17,537,000,000 |
Goodwill acquired during the period | 48,000,000 |
Goodwill adjustments | 2,000,000 |
Goodwill ending balance | 17,587,000,000 |
Hybrid IT | |
Goodwill [Roll Forward] | |
Goodwill beginning balance | 15,479,000,000 |
Goodwill acquired during the period | 48,000,000 |
Goodwill adjustments | 2,000,000 |
Goodwill ending balance | 15,529,000,000 |
Intelligent Edge | |
Goodwill [Roll Forward] | |
Goodwill beginning balance | 1,914,000,000 |
Goodwill acquired during the period | 0 |
Goodwill adjustments | 0 |
Goodwill ending balance | 1,914,000,000 |
Financial Services | |
Goodwill [Roll Forward] | |
Goodwill beginning balance | 144,000,000 |
Goodwill acquired during the period | 0 |
Goodwill adjustments | 0 |
Goodwill ending balance | 144,000,000 |
Corporate Investments | |
Goodwill [Roll Forward] | |
Goodwill beginning balance | 88,000,000 |
Goodwill ending balance | $ 0 |
Fair Value - Schedule of Assets
Fair Value - Schedule of Assets and Liabilities on a Recurring Basis (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Millions | Jul. 31, 2019 | Oct. 31, 2018 |
Assets | ||
Total assets | $ 2,169 | $ 3,773 |
Liabilities | ||
Total liabilities | 149 | 476 |
Time deposits | ||
Assets | ||
Total assets | 908 | 781 |
Money market funds | ||
Assets | ||
Total assets | 609 | 2,340 |
Foreign bonds | ||
Assets | ||
Total assets | 132 | 131 |
Other debt securities | ||
Assets | ||
Total assets | 33 | 25 |
Interest rate contracts | ||
Assets | ||
Total assets | 20 | 0 |
Liabilities | ||
Total liabilities | 32 | 353 |
Foreign exchange contracts | ||
Assets | ||
Total assets | 467 | 496 |
Liabilities | ||
Total liabilities | 116 | 117 |
Other derivatives | ||
Liabilities | ||
Total liabilities | 1 | 6 |
Level 1 | ||
Assets | ||
Total assets | 616 | 2,347 |
Liabilities | ||
Total liabilities | 0 | 0 |
Level 1 | Time deposits | ||
Assets | ||
Total assets | 0 | 0 |
Level 1 | Money market funds | ||
Assets | ||
Total assets | 609 | 2,340 |
Level 1 | Foreign bonds | ||
Assets | ||
Total assets | 7 | 7 |
Level 1 | Other debt securities | ||
Assets | ||
Total assets | 0 | 0 |
Level 1 | Interest rate contracts | ||
Assets | ||
Total assets | 0 | 0 |
Liabilities | ||
Total liabilities | 0 | 0 |
Level 1 | Foreign exchange contracts | ||
Assets | ||
Total assets | 0 | 0 |
Liabilities | ||
Total liabilities | 0 | 0 |
Level 1 | Other derivatives | ||
Liabilities | ||
Total liabilities | 0 | 0 |
Level 2 | ||
Assets | ||
Total assets | 1,521 | 1,401 |
Liabilities | ||
Total liabilities | 149 | 476 |
Level 2 | Time deposits | ||
Assets | ||
Total assets | 908 | 781 |
Level 2 | Money market funds | ||
Assets | ||
Total assets | 0 | 0 |
Level 2 | Foreign bonds | ||
Assets | ||
Total assets | 125 | 124 |
Level 2 | Other debt securities | ||
Assets | ||
Total assets | 1 | 0 |
Level 2 | Interest rate contracts | ||
Assets | ||
Total assets | 20 | 0 |
Liabilities | ||
Total liabilities | 32 | 353 |
Level 2 | Foreign exchange contracts | ||
Assets | ||
Total assets | 467 | 496 |
Liabilities | ||
Total liabilities | 116 | 117 |
Level 2 | Other derivatives | ||
Liabilities | ||
Total liabilities | 1 | 6 |
Level 3 | ||
Assets | ||
Total assets | 32 | 25 |
Liabilities | ||
Total liabilities | 0 | 0 |
Level 3 | Time deposits | ||
Assets | ||
Total assets | 0 | 0 |
Level 3 | Money market funds | ||
Assets | ||
Total assets | 0 | 0 |
Level 3 | Foreign bonds | ||
Assets | ||
Total assets | 0 | 0 |
Level 3 | Other debt securities | ||
Assets | ||
Total assets | 32 | 25 |
Level 3 | Interest rate contracts | ||
Assets | ||
Total assets | 0 | 0 |
Liabilities | ||
Total liabilities | 0 | 0 |
Level 3 | Foreign exchange contracts | ||
Assets | ||
Total assets | 0 | 0 |
Liabilities | ||
Total liabilities | 0 | 0 |
Level 3 | Other derivatives | ||
Liabilities | ||
Total liabilities | $ 0 | $ 0 |
Fair Value - Narrative (Details
Fair Value - Narrative (Details) - USD ($) $ in Billions | Jul. 31, 2019 | Oct. 31, 2018 |
Fair Value Disclosures [Abstract] | ||
Fair value, short-term and long-term debt | $ 13.5 | $ 12.2 |
Financial Instruments - Narrati
Financial Instruments - Narrative (Details) - USD ($) $ in Millions | 9 Months Ended | |
Jul. 31, 2019 | Oct. 31, 2018 | |
Investment Holdings | ||
Investments in equity interests | $ 2,346 | $ 2,398 |
Equity securities in privately held companies | Long-Term Financing Receivables and Other Assets | ||
Investment Holdings | ||
Investment amount | 184 | $ 162 |
Cash flow hedges | ||
Investment Holdings | ||
Gain expected to be reclassified from Accumulated OCI into earnings in next 12 months | $ 80 |
Financial Instruments - Cash Eq
Financial Instruments - Cash Equivalents and Available-for-Sale Investments (Details) - USD ($) $ in Millions | Jul. 31, 2019 | Oct. 31, 2018 |
Cash and Cash Equivalents [Line Items] | ||
Debt securities, Amortized Cost | $ 143 | |
Debt securities, Fair Value | 165 | |
Total cash and equivalents and available-for-sale investments, Cost basis | 1,660 | $ 3,260 |
Gross Unrealized Gain | 22 | 18 |
Gross Unrealized Loss | 0 | (1) |
Total cash equivalents and available-for-sale debt investments | 1,682 | 3,277 |
Cost | ||
Cash and Cash Equivalents [Line Items] | ||
Total cash equivalents | 1,517 | 3,121 |
Cost | Time deposits | ||
Cash and Cash Equivalents [Line Items] | ||
Total cash equivalents | 908 | 781 |
Cost | Money market funds | ||
Cash and Cash Equivalents [Line Items] | ||
Total cash equivalents | 609 | 2,340 |
Fair Value | ||
Cash and Cash Equivalents [Line Items] | ||
Total cash equivalents | 1,517 | 3,121 |
Fair Value | Time deposits | ||
Cash and Cash Equivalents [Line Items] | ||
Total cash equivalents | 908 | 781 |
Fair Value | Money market funds | ||
Cash and Cash Equivalents [Line Items] | ||
Total cash equivalents | 609 | 2,340 |
Debt securities | ||
Cash and Cash Equivalents [Line Items] | ||
Debt securities, Amortized Cost | 143 | 139 |
Debt securities, Gross Unrealized Gain | 22 | 18 |
Debt securities, Gross Unrealized Loss | 0 | (1) |
Debt securities, Fair Value | 165 | 156 |
Foreign bonds | ||
Cash and Cash Equivalents [Line Items] | ||
Debt securities, Amortized Cost | 110 | 113 |
Debt securities, Gross Unrealized Gain | 22 | 18 |
Debt securities, Gross Unrealized Loss | 0 | 0 |
Debt securities, Fair Value | 132 | 131 |
Other debt securities | ||
Cash and Cash Equivalents [Line Items] | ||
Debt securities, Amortized Cost | 33 | 26 |
Debt securities, Gross Unrealized Gain | 0 | 0 |
Debt securities, Gross Unrealized Loss | 0 | (1) |
Debt securities, Fair Value | $ 33 | $ 25 |
Financial Instruments - Contrac
Financial Instruments - Contractual Maturities of Investments in Available-for-Sale Debt Securities (Details) $ in Millions | Jul. 31, 2019USD ($) |
Amortized Cost | |
Due in one to five years | $ 10 |
Due in more than five years | 133 |
Debt securities, Amortized Cost | 143 |
Fair Value | |
Due in one to five years | 10 |
Due in more than five years | 155 |
Debt securities, Fair Value | $ 165 |
Financial Instruments - Gross N
Financial Instruments - Gross Notional and Fair Value of Instruments in the Balance Sheets (Details) - USD ($) $ in Millions | Jul. 31, 2019 | Oct. 31, 2018 |
Derivatives, Fair Value | ||
Outstanding Gross Notional | $ 22,443 | $ 23,894 |
Other Current Assets | ||
Derivatives, Fair Value | ||
Derivative asset, fair value | 279 | 343 |
Long-Term Financing Receivables and Other Assets | ||
Derivatives, Fair Value | ||
Derivative asset, fair value | 208 | 153 |
Other Accrued Liabilities | ||
Derivatives, Fair Value | ||
Derivative liability, fair value | 69 | 85 |
Long-Term Other Liabilities | ||
Derivatives, Fair Value | ||
Derivative liability, fair value | 80 | 391 |
Derivatives designated as hedging instruments | ||
Derivatives, Fair Value | ||
Outstanding Gross Notional | 17,134 | 17,010 |
Derivatives designated as hedging instruments | Other Current Assets | ||
Derivatives, Fair Value | ||
Derivative asset, fair value | 243 | 302 |
Derivatives designated as hedging instruments | Long-Term Financing Receivables and Other Assets | ||
Derivatives, Fair Value | ||
Derivative asset, fair value | 207 | 148 |
Derivatives designated as hedging instruments | Other Accrued Liabilities | ||
Derivatives, Fair Value | ||
Derivative liability, fair value | 42 | 24 |
Derivatives designated as hedging instruments | Long-Term Other Liabilities | ||
Derivatives, Fair Value | ||
Derivative liability, fair value | 73 | 379 |
Derivatives designated as hedging instruments | Fair value hedges | Interest rate contracts | ||
Derivatives, Fair Value | ||
Outstanding Gross Notional | 6,850 | 6,850 |
Derivatives designated as hedging instruments | Fair value hedges | Interest rate contracts | Other Current Assets | ||
Derivatives, Fair Value | ||
Derivative asset, fair value | 0 | 0 |
Derivatives designated as hedging instruments | Fair value hedges | Interest rate contracts | Long-Term Financing Receivables and Other Assets | ||
Derivatives, Fair Value | ||
Derivative asset, fair value | 20 | 0 |
Derivatives designated as hedging instruments | Fair value hedges | Interest rate contracts | Other Accrued Liabilities | ||
Derivatives, Fair Value | ||
Derivative liability, fair value | 0 | 0 |
Derivatives designated as hedging instruments | Fair value hedges | Interest rate contracts | Long-Term Other Liabilities | ||
Derivatives, Fair Value | ||
Derivative liability, fair value | 32 | 353 |
Derivatives designated as hedging instruments | Cash flow hedges | Foreign exchange contracts | ||
Derivatives, Fair Value | ||
Outstanding Gross Notional | 8,539 | 8,423 |
Derivatives designated as hedging instruments | Cash flow hedges | Foreign exchange contracts | Other Current Assets | ||
Derivatives, Fair Value | ||
Derivative asset, fair value | 218 | 270 |
Derivatives designated as hedging instruments | Cash flow hedges | Foreign exchange contracts | Long-Term Financing Receivables and Other Assets | ||
Derivatives, Fair Value | ||
Derivative asset, fair value | 157 | 107 |
Derivatives designated as hedging instruments | Cash flow hedges | Foreign exchange contracts | Other Accrued Liabilities | ||
Derivatives, Fair Value | ||
Derivative liability, fair value | 24 | 11 |
Derivatives designated as hedging instruments | Cash flow hedges | Foreign exchange contracts | Long-Term Other Liabilities | ||
Derivatives, Fair Value | ||
Derivative liability, fair value | 23 | 15 |
Derivatives designated as hedging instruments | Net investment hedges | Foreign exchange contracts | ||
Derivatives, Fair Value | ||
Outstanding Gross Notional | 1,745 | 1,737 |
Derivatives designated as hedging instruments | Net investment hedges | Foreign exchange contracts | Other Current Assets | ||
Derivatives, Fair Value | ||
Derivative asset, fair value | 25 | 32 |
Derivatives designated as hedging instruments | Net investment hedges | Foreign exchange contracts | Long-Term Financing Receivables and Other Assets | ||
Derivatives, Fair Value | ||
Derivative asset, fair value | 30 | 41 |
Derivatives designated as hedging instruments | Net investment hedges | Foreign exchange contracts | Other Accrued Liabilities | ||
Derivatives, Fair Value | ||
Derivative liability, fair value | 18 | 13 |
Derivatives designated as hedging instruments | Net investment hedges | Foreign exchange contracts | Long-Term Other Liabilities | ||
Derivatives, Fair Value | ||
Derivative liability, fair value | 18 | 11 |
Derivatives not designated as hedging instruments | ||
Derivatives, Fair Value | ||
Outstanding Gross Notional | 5,309 | 6,884 |
Derivatives not designated as hedging instruments | Other Current Assets | ||
Derivatives, Fair Value | ||
Derivative asset, fair value | 36 | 41 |
Derivatives not designated as hedging instruments | Long-Term Financing Receivables and Other Assets | ||
Derivatives, Fair Value | ||
Derivative asset, fair value | 1 | 5 |
Derivatives not designated as hedging instruments | Other Accrued Liabilities | ||
Derivatives, Fair Value | ||
Derivative liability, fair value | 27 | 61 |
Derivatives not designated as hedging instruments | Long-Term Other Liabilities | ||
Derivatives, Fair Value | ||
Derivative liability, fair value | 7 | 12 |
Derivatives not designated as hedging instruments | Foreign exchange contracts | ||
Derivatives, Fair Value | ||
Outstanding Gross Notional | 5,206 | 6,780 |
Derivatives not designated as hedging instruments | Foreign exchange contracts | Other Current Assets | ||
Derivatives, Fair Value | ||
Derivative asset, fair value | 36 | 41 |
Derivatives not designated as hedging instruments | Foreign exchange contracts | Long-Term Financing Receivables and Other Assets | ||
Derivatives, Fair Value | ||
Derivative asset, fair value | 1 | 5 |
Derivatives not designated as hedging instruments | Foreign exchange contracts | Other Accrued Liabilities | ||
Derivatives, Fair Value | ||
Derivative liability, fair value | 26 | 55 |
Derivatives not designated as hedging instruments | Foreign exchange contracts | Long-Term Other Liabilities | ||
Derivatives, Fair Value | ||
Derivative liability, fair value | 7 | 12 |
Derivatives not designated as hedging instruments | Other derivatives | ||
Derivatives, Fair Value | ||
Outstanding Gross Notional | 103 | 104 |
Derivatives not designated as hedging instruments | Other derivatives | Other Current Assets | ||
Derivatives, Fair Value | ||
Derivative asset, fair value | 0 | 0 |
Derivatives not designated as hedging instruments | Other derivatives | Long-Term Financing Receivables and Other Assets | ||
Derivatives, Fair Value | ||
Derivative asset, fair value | 0 | 0 |
Derivatives not designated as hedging instruments | Other derivatives | Other Accrued Liabilities | ||
Derivatives, Fair Value | ||
Derivative liability, fair value | 1 | 6 |
Derivatives not designated as hedging instruments | Other derivatives | Long-Term Other Liabilities | ||
Derivatives, Fair Value | ||
Derivative liability, fair value | $ 0 | $ 0 |
Financial Instruments - Offsett
Financial Instruments - Offsetting Assets and Liabilities (Details) - USD ($) $ in Millions | 9 Months Ended | |
Jul. 31, 2019 | Oct. 31, 2018 | |
Derivative assets | ||
Gross Amount Recognized | $ 487 | $ 496 |
Gross Amount Offset | 0 | 0 |
Net Amount Presented | 487 | 496 |
Gross Amounts Not Offset | ||
Derivatives | 125 | 179 |
Financial Collateral | 316 | 205 |
Net Amount | 46 | 112 |
Derivative liabilities | ||
Gross Amount Recognized | 149 | 476 |
Gross Amount Offset | 0 | 0 |
Net Amount Presented | 149 | 476 |
Gross Amounts Not Offset | ||
Derivatives | 125 | 179 |
Financial Collateral | 5 | 302 |
Net Amount | $ 19 | (5) |
Business days prior to reporting date | 2 days | |
Cash collateral | $ 4 | $ 302 |
Counterparty collateral | $ 1 |
Financial Instruments - Pre-tax
Financial Instruments - Pre-tax Effect of Derivative Instruments and Items in a Fair Value Hedging Relationship (Details) - Interest rate contracts - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2019 | Jul. 31, 2018 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gains (Losses) Recognized in Earnings on Derivative | $ 123 | $ 16 | $ 341 | $ (194) |
Gains (Losses) Recognized in Earnings on Related Hedged Item | $ (123) | $ (16) | $ (341) | $ 194 |
Financial Instruments - Pre-t_2
Financial Instruments - Pre-tax Effect of Derivative Instruments in Hedging Relationships (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2019 | Jul. 31, 2018 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gains (Losses) Recognized in Other Comprehensive Income (OCI) on Derivatives (Effective Portion) | $ 63 | $ 149 | $ 225 | $ 50 |
Net revenue | 7,217 | 7,764 | 21,920 | 22,906 |
Interest and other, net | (70) | (64) | (139) | (163) |
Net (loss) earnings from continuing operations | (27) | 452 | 569 | 2,784 |
Foreign currency contracts | Cash flow hedges | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gains (Losses) Recognized in Other Comprehensive Income (OCI) on Derivatives (Effective Portion) | 63 | 149 | 225 | 50 |
Foreign currency contracts | Cash flow hedges | Gains (Losses) Reclassified from Accumulated OCI Into Earnings (Effective Portion) | Reclassifications of gains (losses) into earnings | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Net revenue | 42 | 29 | 168 | (82) |
Interest and other, net | 16 | 14 | 91 | 4 |
Net (loss) earnings from continuing operations | 58 | 43 | 259 | (78) |
Foreign currency contracts | Cash flow hedges | Net revenue | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gains (Losses) Recognized in Other Comprehensive Income (OCI) on Derivatives (Effective Portion) | 43 | 121 | 102 | 59 |
Foreign currency contracts | Cash flow hedges | Interest and other, net | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gains (Losses) Recognized in Other Comprehensive Income (OCI) on Derivatives (Effective Portion) | 20 | 28 | 123 | (9) |
Foreign currency contracts | Net investment hedges | Gains (Losses) Reclassified from Accumulated OCI Into Earnings (Effective Portion) | Reclassifications of gains (losses) into earnings | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Interest and other, net | 0 | 0 | 0 | 0 |
Foreign currency contracts | Net investment hedges | Interest and other, net | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gains (Losses) Recognized in Other Comprehensive Income (OCI) on Derivatives (Effective Portion) | $ (18) | $ 57 | $ (23) | $ 31 |
Financial Instruments - Pre-t_3
Financial Instruments - Pre-tax Effect of Derivative Instruments Not Designated as Hedging Instruments (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2019 | Jul. 31, 2018 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gains (Losses) Recognized in Earnings on Derivatives | $ 53 | $ 233 | $ (63) | $ 104 |
Foreign currency contracts | Interest and other, net | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gains (Losses) Recognized in Earnings on Derivatives | 55 | 233 | (68) | 104 |
Other derivatives | Interest and other, net | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gains (Losses) Recognized in Earnings on Derivatives | $ (2) | $ 0 | $ 5 | $ 0 |
Borrowings (Details)
Borrowings (Details) | Aug. 16, 2019USD ($)extension_term | Jul. 31, 2019USD ($)commercial_paper_program | Mar. 31, 2019USD ($) | Oct. 31, 2018USD ($) |
Line of Credit Facility [Line Items] | ||||
Number of commercial paper programs | commercial_paper_program | 2 | |||
Line of Credit | Revolving Credit Facility | Subsequent Event | ||||
Line of Credit Facility [Line Items] | ||||
Maximum borrowing capacity under commercial paper program | $ 4,750,000,000 | |||
Debt term | 5 years | |||
Number of extension terms | extension_term | 2 | |||
Debt renewal term | 1 year | |||
Euro Program | ||||
Line of Credit Facility [Line Items] | ||||
Maximum borrowing capacity under commercial paper program | $ 3,000,000,000 | |||
Commercial Paper | ||||
Line of Credit Facility [Line Items] | ||||
Maximum approved | $ 4,000,000,000 | |||
Number of commercial paper programs | commercial_paper_program | 2 | |||
Amount outstanding | $ 0 | $ 0 | ||
Commercial Paper | Hewlett Packard Enterprise | ||||
Line of Credit Facility [Line Items] | ||||
Additional authorization | 1,000,000,000 | |||
Commercial Paper | U.S. Program | ||||
Line of Credit Facility [Line Items] | ||||
Maximum borrowing capacity under commercial paper program | 4,000,000,000 | |||
Commercial Paper | Euro Commercial Paper Certificate of Deposit Programme | ||||
Line of Credit Facility [Line Items] | ||||
Maximum borrowing capacity under commercial paper program | 1,000,000,000 | $ 500,000,000 | ||
Amount outstanding | $ 671,000,000 | $ 392,000,000 |
Stockholders' Equity - Taxes Re
Stockholders' Equity - Taxes Related to Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2019 | Jul. 31, 2018 | |
Accumulated Other Comprehensive Income | ||||
Components of accumulated other comprehensive income, net of taxes | ||||
Tax benefit (provision) | $ 2 | $ (19) | $ 4 | $ (34) |
Change in Net Unrealized Gains (Losses) on Cash Flow Hedges | ||||
Components of accumulated other comprehensive income, net of taxes | ||||
Tax (provision) on net unrealized gains (losses) arising during the period | (6) | (20) | (24) | (6) |
Tax provision (benefit) on net (gains) losses reclassified into earnings | 7 | 5 | 31 | (11) |
Tax benefit (provision) | 1 | (15) | 7 | (17) |
Unrealized components of defined benefit plans | ||||
Components of accumulated other comprehensive income, net of taxes | ||||
Tax benefit (provision) | 2 | (6) | (3) | (20) |
Unrealized Losses Arising During the Period | ||||
Components of accumulated other comprehensive income, net of taxes | ||||
Tax (provision) on net unrealized gains (losses) arising during the period | 5 | 3 | 13 | 2 |
Actuarial Loss and Net Prior Service Benefit | ||||
Components of accumulated other comprehensive income, net of taxes | ||||
Tax provision (benefit) on net (gains) losses reclassified into earnings | (3) | (4) | (9) | (10) |
Curtailments, settlements and other | ||||
Components of accumulated other comprehensive income, net of taxes | ||||
Tax provision (benefit) on net (gains) losses reclassified into earnings | 0 | (5) | (7) | (12) |
Change in cumulative translation adjustment | ||||
Components of accumulated other comprehensive income, net of taxes | ||||
Tax benefit (provision) | $ (1) | $ 2 | $ 0 | $ 3 |
Stockholders' Equity - Changes
Stockholders' Equity - Changes and Reclassifications Of OCI (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2019 | Jul. 31, 2018 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Other comprehensive income, net of taxes | $ 30 | $ 76 | $ 68 | $ 175 |
Net unrealized gains (losses) on available-for-sale securities | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Other comprehensive income (loss) before reclassifications | 3 | (2) | 8 | (1) |
Gains reclassified into earnings | 0 | 0 | (3) | (9) |
Other comprehensive income, net of taxes | 3 | (2) | 5 | (10) |
Change in net unrealized gains (losses) on cash flow hedges | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Other comprehensive income (loss) before reclassifications | 57 | 129 | 201 | 44 |
Gains reclassified into earnings | (51) | (38) | (228) | 67 |
Other comprehensive income, net of taxes | 6 | 91 | (27) | 111 |
Change in unrealized components of defined benefit plans | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Other comprehensive income (loss) before reclassifications | (65) | |||
Gains reclassified into earnings | 157 | |||
Other comprehensive income, net of taxes | 30 | 25 | 92 | 111 |
Net unrealized losses arising during the period | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Gains reclassified into earnings | (26) | (22) | (65) | (21) |
Amortization of actuarial loss and prior service benefit | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Gains reclassified into earnings | 51 | 43 | 152 | 133 |
Curtailments, settlements and other | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Other comprehensive income, net of taxes | 5 | 4 | 5 | (1) |
Change in cumulative translation adjustment | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Other comprehensive income (loss) before reclassifications | (2) | |||
Gains reclassified into earnings | 0 | |||
Other comprehensive income, net of taxes | $ (9) | $ (38) | $ (2) | $ (37) |
Stockholders' Equity - Componen
Stockholders' Equity - Components of AOCI (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2019 | Jul. 31, 2018 | |
Components of accumulated other comprehensive loss, net of taxes | ||||
Balance at beginning of period | $ 21,274 | |||
Balance at end of period | $ 17,580 | 17,580 | ||
Net unrealized gains (losses) on available-for-sale securities | ||||
Components of accumulated other comprehensive loss, net of taxes | ||||
Balance at beginning of period | 17 | |||
Other comprehensive income (loss) before reclassifications | 3 | $ (2) | 8 | $ (1) |
Reclassifications of (gains) losses into earnings | 0 | 0 | (3) | (9) |
Balance at end of period | 22 | 22 | ||
Net unrealized gains (losses) on cash flow hedges | ||||
Components of accumulated other comprehensive loss, net of taxes | ||||
Balance at beginning of period | 106 | |||
Other comprehensive income (loss) before reclassifications | 57 | 129 | 201 | 44 |
Reclassifications of (gains) losses into earnings | (51) | (38) | (228) | 67 |
Balance at end of period | 79 | 79 | ||
Unrealized components of defined benefit plans | ||||
Components of accumulated other comprehensive loss, net of taxes | ||||
Balance at beginning of period | (2,922) | |||
Other comprehensive income (loss) before reclassifications | (65) | |||
Reclassifications of (gains) losses into earnings | 157 | |||
Balance at end of period | (2,830) | (2,830) | ||
Cumulative translation adjustment | ||||
Components of accumulated other comprehensive loss, net of taxes | ||||
Balance at beginning of period | (419) | |||
Other comprehensive income (loss) before reclassifications | (2) | |||
Reclassifications of (gains) losses into earnings | 0 | |||
Balance at end of period | (421) | (421) | ||
Accumulated other comprehensive loss | ||||
Components of accumulated other comprehensive loss, net of taxes | ||||
Balance at beginning of period | (3,180) | (2,982) | (3,218) | (2,895) |
Other comprehensive income (loss) before reclassifications | 142 | |||
Reclassifications of (gains) losses into earnings | (74) | |||
Balance at end of period | $ (3,150) | $ (2,906) | $ (3,150) | $ (2,906) |
Stockholders' Equity - Narrativ
Stockholders' Equity - Narrative (Details) - Share Repurchase program - USD ($) shares in Millions, $ in Billions | 9 Months Ended | 12 Months Ended |
Jul. 31, 2019 | Oct. 31, 2018 | |
Equity, Class of Treasury Stock [Line Items] | ||
Common stock retired (in shares) | 130 | 2.4 |
Open share repurchases during period (in shares) | 1.2 | |
Repurchases of common stock recorded as a reduction to stockholders' equity | $ 1.9 | |
Remaining authorized repurchase amount | $ 2.7 |
Net Earnings Per Share (Details
Net Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2019 | Jul. 31, 2018 | |
Numerator: | ||||
Net (loss) earnings from continuing operations | $ (27) | $ 452 | $ 569 | $ 2,784 |
Net loss from discontinued operations | 0 | (1) | 0 | (119) |
Net (loss) earnings | $ (27) | $ 451 | $ 569 | $ 2,665 |
Denominator: | ||||
Weighted-average shares used to compute basic net EPS (in shares) | 1,334 | 1,513 | 1,367 | 1,552 |
Dilutive effect of employee stock plans (in shares) | 0 | 18 | 13 | 26 |
Weighted-average shares used to compute diluted net EPS (in shares) | 1,334 | 1,531 | 1,380 | 1,578 |
Basic net (loss) earnings per share: | ||||
Continuing operations (in dollars per share) | $ (0.02) | $ 0.30 | $ 0.42 | $ 1.79 |
Discontinued operations (in dollars per share) | 0 | 0 | 0 | (0.07) |
Total basic net earnings (loss) per share (in dollars per share) | (0.02) | 0.30 | 0.42 | 1.72 |
Diluted net (loss) earnings per share: | ||||
Continuing operations (in dollars per share) | (0.02) | 0.29 | 0.41 | 1.76 |
Discontinued operations (in dollars per share) | 0 | 0 | 0 | (0.07) |
Total diluted net earnings (loss) per share (in dollars per share) | $ (0.02) | $ 0.29 | $ 0.41 | $ 1.69 |
Anti-dilutive weighted-average stock awards (in shares) | 44 | 2 | 4 | 3 |
Litigation and Contingencies (D
Litigation and Contingencies (Details) $ in Thousands | Aug. 15, 2019USD ($) | May 16, 2019USD ($) | Feb. 06, 2018plaintiff | Dec. 01, 2017plaintiff | Nov. 30, 2017plaintiff | Nov. 08, 2017USD ($) | Dec. 19, 2016 | Jun. 30, 2016USD ($) | Jan. 24, 2013USD ($) | Dec. 11, 2012USD ($) | Apr. 21, 2012USD ($) | May 10, 2010USD ($)employee | Apr. 29, 2010USD ($) | Jul. 31, 2011 | Jul. 31, 2019 | Oct. 31, 2008contract | Apr. 20, 2012USD ($) | Apr. 11, 2012USD ($) | Jun. 15, 2011phase |
Litigation and Contingencies | |||||||||||||||||||
Damages sought | $ 370,000 | ||||||||||||||||||
Forsyth, et al. vs HP Inc. and Hewlett Packard Enterprise | |||||||||||||||||||
Litigation and Contingencies | |||||||||||||||||||
Number of plantiffs | plaintiff | 16 | 13 | 3 | ||||||||||||||||
Judicial ruling | Oracle | |||||||||||||||||||
Litigation and Contingencies | |||||||||||||||||||
Amount awarded | $ 3,000,000 | ||||||||||||||||||
Number of phases | phase | 2 | ||||||||||||||||||
Judicial ruling | Oracle - past lost profits | |||||||||||||||||||
Litigation and Contingencies | |||||||||||||||||||
Amount awarded | 1,700,000 | ||||||||||||||||||
Judicial ruling | Oracle - future lost profits | |||||||||||||||||||
Litigation and Contingencies | |||||||||||||||||||
Amount awarded | $ 1,300,000 | ||||||||||||||||||
Renewed judgement | Oracle | |||||||||||||||||||
Litigation and Contingencies | |||||||||||||||||||
Amount awarded | $ 3,800,000 | ||||||||||||||||||
Daily interest accrual on renewed judgement | $ 1,037 | ||||||||||||||||||
Minimum | Forsyth, et al. vs HP Inc. and Hewlett Packard Enterprise | |||||||||||||||||||
Litigation and Contingencies | |||||||||||||||||||
Age of terminated employees | 40 years | ||||||||||||||||||
India Directorate of Revenue Intelligence Proceedings | |||||||||||||||||||
Litigation and Contingencies | |||||||||||||||||||
Number of HP India employees alleging underpaid customs | employee | 7 | ||||||||||||||||||
Number of former HP India employees alleging underpaid customs | employee | 1 | ||||||||||||||||||
Loss contingency deposit to prevent interruption of business | $ 16,000 | ||||||||||||||||||
Bangalore Commissioner of Customs | |||||||||||||||||||
Litigation and Contingencies | |||||||||||||||||||
Duties and penalties under show cause notices | $ 17,000 | $ 386,000 | |||||||||||||||||
Amount deposited under show cause notice prior to order | $ 7,000 | $ 9,000 | |||||||||||||||||
Additional amount deposited against products-related show cause notice | $ 10,000 | ||||||||||||||||||
Additional amount deposited against parts-related show cause notice | $ 3,000 | ||||||||||||||||||
Additional amount deposited against product order | $ 24,000 | ||||||||||||||||||
ECT proceedings | |||||||||||||||||||
Litigation and Contingencies | |||||||||||||||||||
Number of ECT contracts related to alleged improprieties | contract | 3 | ||||||||||||||||||
Bid and contract term | 5 years | ||||||||||||||||||
ECT proceedings | Maximum | |||||||||||||||||||
Litigation and Contingencies | |||||||||||||||||||
Length of sanctions | 5 years | ||||||||||||||||||
ECT proceedings | Minimum | |||||||||||||||||||
Litigation and Contingencies | |||||||||||||||||||
Length of sanctions | 2 years | ||||||||||||||||||
Everett SpinCo | Cross-Indemnifications | |||||||||||||||||||
Litigation and Contingencies | |||||||||||||||||||
Damages sought | $ 1,000,000 | ||||||||||||||||||
Everett SpinCo | Discontinued Operations, Disposed of by Means Other than Sale, Spinoff | |||||||||||||||||||
Litigation and Contingencies | |||||||||||||||||||
Indemnification threshold amount | $ 250,000 | ||||||||||||||||||
Subsequent Event | Everett SpinCo | Cross-Indemnifications | |||||||||||||||||||
Litigation and Contingencies | |||||||||||||||||||
Amount award against entity | $ 632,000 | ||||||||||||||||||
Pre-judgment interest | $ 34,000 |
Indemnifications (Details)
Indemnifications (Details) - USD ($) $ in Millions | Jul. 31, 2019 | Oct. 31, 2018 |
Tax Indemnification | ||
Other Commitments [Line Items] | ||
Net indemnification receivable - long-term | $ 266 | $ 16 |
Net indemnification receivable - short-term | 13 | 17 |
Net indemnification payable - long-term | 9 | 9 |
Net indemnification payable - short-term | 102 | 26 |
Cross-Indemnifications | ||
Other Commitments [Line Items] | ||
Receivable | 88 | 104 |
Payable | $ 57 | $ 83 |