Cover Page
Cover Page - shares | 9 Months Ended | |
Jul. 31, 2021 | Aug. 30, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jul. 31, 2021 | |
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 | 11445 Compaq Center West Drive, | |
Entity Address, City or Town | Houston, | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 77070 | |
City Area Code | (650) | |
Local Phone Number | 687-5817 | |
Title of 12(b) Security | Common stock, par value $0.01 per share | |
Trading Symbol | HPE | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 1,308,050,014 | |
Entity Central Index Key | 0001645590 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --10-31 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q3 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Earnings (Unaudited) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2021 | Jul. 31, 2020 | Jul. 31, 2021 | Jul. 31, 2020 | |
Net revenue: | ||||
Financing income | $ 125 | $ 115 | $ 371 | $ 343 |
Total net revenue | 6,897 | 6,816 | 20,430 | 19,774 |
Costs and expenses: | ||||
Financing interest | 51 | 65 | 164 | 209 |
Research and development | 506 | 455 | 1,477 | 1,390 |
Selling, general and administrative | 1,291 | 1,131 | 3,649 | 3,458 |
Amortization of intangible assets | 82 | 95 | 276 | 299 |
Impairment of goodwill | 0 | 0 | 0 | 865 |
Transformation costs | 213 | 357 | 733 | 646 |
Disaster charges | 5 | 2 | 6 | 24 |
Acquisition, disposition and other related charges | 3 | 15 | 34 | 55 |
Total costs and expenses | 6,615 | 6,804 | 19,648 | 20,248 |
Earnings (loss) from operations | 282 | 12 | 782 | (474) |
Interest and other, net | (50) | (71) | (105) | (158) |
Tax indemnification and related adjustments | 76 | (30) | 60 | (86) |
Non-service net periodic benefit credit | 19 | 28 | 53 | 101 |
Earnings from equity interests | 79 | 27 | 109 | 50 |
Earnings (loss) before taxes | 406 | (34) | 899 | (567) |
(Provision) benefit for taxes | (14) | 43 | (25) | 88 |
Net earnings (loss) | $ 392 | $ 9 | $ 874 | $ (479) |
Net earnings (loss) per share: | ||||
Basic (in dollars per share) | $ 0.30 | $ 0.01 | $ 0.67 | $ (0.37) |
Diluted (in dollars per share) | $ 0.29 | $ 0.01 | $ 0.66 | $ (0.37) |
Weighted-average shares used to compute net earnings (loss) per share: | ||||
Basic (in shares) | 1,314 | 1,292 | 1,308 | 1,294 |
Diluted (in shares) | 1,338 | 1,300 | 1,328 | 1,294 |
Products | ||||
Net revenue: | ||||
Revenues | $ 4,230 | $ 4,193 | $ 12,365 | $ 11,760 |
Costs and expenses: | ||||
Cost of products and services | 2,908 | 3,088 | 8,567 | 8,376 |
Services | ||||
Net revenue: | ||||
Revenues | 2,542 | 2,508 | 7,694 | 7,671 |
Costs and expenses: | ||||
Cost of products and services | $ 1,556 | $ 1,596 | $ 4,742 | $ 4,926 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2021 | Jul. 31, 2020 | Jul. 31, 2021 | Jul. 31, 2020 | |
Statement of Comprehensive Income [Abstract] | ||||
Net earnings (loss) | $ 392 | $ 9 | $ 874 | $ (479) |
Change in net unrealized gains (losses) on available-for-sale securities: | ||||
Net unrealized gains (losses) arising during the period | 1 | 6 | (1) | 0 |
(Gains) losses reclassified into earnings | 0 | (1) | 0 | (8) |
Change in net unrealized gains (losses) on available-for-sale securities | 1 | 5 | (1) | (8) |
Change in net unrealized gains (losses) on cash flow hedges: | ||||
Net unrealized gains (losses) arising during the period | 101 | (456) | (183) | (85) |
Net (gains) losses reclassified into earnings | (36) | 242 | 262 | (41) |
Change in net unrealized gains (losses) on cash flow hedges | 65 | (214) | 79 | (126) |
Change in unrealized components of defined benefit plans: | ||||
Net unrealized gains (losses) arising during the period | 6 | (19) | 29 | (10) |
Amortization of net actuarial loss and prior service benefit | 70 | 61 | 212 | 183 |
Curtailments, settlements and other | 0 | 7 | 2 | 8 |
Change in unrealized components of defined benefit plans | 76 | 49 | 243 | 181 |
Change in cumulative translation adjustment | 2 | 1 | 20 | (46) |
Other comprehensive income (loss) before taxes | 144 | (159) | 341 | 1 |
(Provision) benefit for taxes | (13) | 28 | (33) | 13 |
Other comprehensive income (loss), net of taxes | 131 | (131) | 308 | 14 |
Comprehensive income (loss) | $ 523 | $ (122) | $ 1,182 | $ (465) |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Millions | Jul. 31, 2021 | Oct. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 5,293 | $ 4,233 |
Accounts receivable, net of allowances | 3,297 | 3,386 |
Financing receivables, net of allowances | 3,814 | 3,794 |
Inventory | 3,942 | 2,674 |
Assets held for sale | 1 | 77 |
Other current assets | 2,398 | 2,392 |
Total current assets | 18,745 | 16,556 |
Property, plant and equipment | 5,510 | 5,625 |
Long-term financing receivables and other assets | 10,912 | 10,544 |
Investments in equity interests | 2,286 | 2,170 |
Goodwill | 18,092 | 18,017 |
Intangible assets | 892 | 1,103 |
Total assets | 56,437 | 54,015 |
Current liabilities: | ||
Notes payable and short-term borrowings | 3,736 | 3,755 |
Accounts payable | 6,526 | 5,383 |
Employee compensation and benefits | 1,585 | 1,391 |
Taxes on earnings | 152 | 148 |
Deferred revenue | 3,434 | 3,430 |
Accrued restructuring | 267 | 366 |
Other accrued liabilities | 3,941 | 4,265 |
Total current liabilities | 19,641 | 18,738 |
Long-term debt | 12,489 | 12,186 |
Other non-current liabilities | 7,234 | 6,995 |
Commitments and contingencies | ||
HPE stockholders' equity: | ||
Preferred stock, $0.01 par value (300 shares authorized; none issued) | 0 | 0 |
Common stock, $0.01 par value (9,600 shares authorized; 1,307 and 1,287 shares issued and outstanding at July 31, 2021 and October 31, 2020, respectively) | 13 | 13 |
Additional paid-in capital | 28,632 | 28,350 |
Accumulated deficit | (7,994) | (8,375) |
Accumulated other comprehensive loss | (3,631) | (3,939) |
Total HPE stockholders' equity | 17,020 | 16,049 |
Non-controlling interests | 53 | 47 |
Total stockholders' equity | 17,073 | 16,096 |
Total liabilities and stockholders' equity | $ 56,437 | $ 54,015 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares shares in Millions | Jul. 31, 2021 | Oct. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 300 | 300 |
Preferred stock, shares issued | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 9,600 | 9,600 |
Common stock, shares issued | 1,307 | 1,287 |
Common stock, shares outstanding | 1,307 | 1,287 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions | 9 Months Ended | |
Jul. 31, 2021 | Jul. 31, 2020 | |
Cash flows from operating activities: | ||
Net earnings (loss) | $ 874 | $ (479) |
Adjustments to reconcile net earnings (loss) to net cash provided by operating activities: | ||
Depreciation and amortization | 1,956 | 1,973 |
Impairment of goodwill | 0 | 865 |
Stock-based compensation expense | 304 | 215 |
Provision for inventory and doubtful accounts | 149 | 208 |
Restructuring charges | 492 | 553 |
Deferred taxes on earnings (loss) | (156) | (214) |
Earnings from equity interests | (109) | (50) |
Dividends received from equity investees | 38 | 35 |
Other, net | 117 | 115 |
Changes in operating assets and liabilities, net of acquisitions: | ||
Accounts receivable | 61 | 69 |
Financing receivables | 26 | (411) |
Inventory | (1,352) | (1,253) |
Accounts payable | 1,150 | 431 |
Taxes on earnings | (6) | (85) |
Restructuring | (426) | (350) |
Other assets and liabilities | (203) | (129) |
Net cash provided by operating activities | 2,915 | 1,493 |
Cash flows from investing activities: | ||
Investment in property, plant and equipment | (1,732) | (1,779) |
Proceeds from sale of property, plant and equipment | 274 | 623 |
Purchases of available-for-sale securities and other investments | (44) | (78) |
Maturities and sales of available-for-sale securities and other investments | 11 | 29 |
Financial collateral posted | (873) | (573) |
Financial collateral received | 780 | 637 |
Payments made in connection with business acquisitions, net of cash acquired | (133) | (13) |
Net cash used in investing activities | (1,717) | (1,154) |
Cash flows from financing activities: | ||
Short-term borrowings with original maturities less than 90 days, net | (30) | 36 |
Proceeds from debt, net of issuance costs | 2,698 | 6,745 |
Payment of debt | (2,341) | (1,399) |
Payments related to stock-based award activities, net | (18) | (34) |
Repurchase of common stock | 0 | (355) |
Cash dividends paid to non-controlling interests | (8) | (7) |
Cash dividends paid to shareholders | (468) | (464) |
Net cash (used in) provided by financing activities | (167) | 4,522 |
Increase in cash, cash equivalents and restricted cash | 1,031 | 4,861 |
Cash, cash equivalents and restricted cash at beginning of period | 4,621 | 4,076 |
Cash, cash equivalents and restricted cash at end of period | $ 5,652 | $ 8,937 |
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 DeficitCumulative Effect, Period of Adoption, Adjustment | Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive LossCumulative Effect, Period of Adoption, Adjustment | [1] | Equity Attributable to the Company | Equity Attributable to the CompanyCumulative Effect, Period of Adoption, Adjustment | [2] | Non-controlling Interests | Total Equity | Total EquityCumulative Effect, Period of Adoption, Adjustment | [2] | |
Balance at beginning of period (in shares) at Oct. 31, 2019 | 1,294,369 | |||||||||||||||
Balance at beginning of period at Oct. 31, 2019 | $ 13 | $ 28,444 | $ (7,632) | $ 43 | [1] | $ (3,727) | $ (43) | $ 17,098 | $ 51 | $ 17,149 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||
Net earnings (loss) | (479) | (479) | 7 | (472) | ||||||||||||
Other comprehensive income | $ 14 | 14 | 14 | 14 | ||||||||||||
Comprehensive income (loss) | (465) | 7 | (458) | |||||||||||||
Stock-based compensation expense | 216 | 216 | 216 | |||||||||||||
Tax withholding related to vesting of employee stock plans | (85) | (85) | (85) | |||||||||||||
Issuance of common stock in connection with employee stock plans and other (in shares) | 16,393 | |||||||||||||||
Issuance of common stock in connection with employee stock plans and other | 46 | 46 | 1 | 47 | ||||||||||||
Repurchases of common stock (in shares) | (24,756) | |||||||||||||||
Repurchases of common stock | (346) | (346) | (346) | |||||||||||||
Cash dividends declared | (309) | (309) | (8) | (317) | ||||||||||||
Balance at beginning of period (in shares) at Jul. 31, 2020 | 1,286,006 | |||||||||||||||
Balance at end of period at Jul. 31, 2020 | $ 13 | 28,275 | (8,377) | (3,756) | 16,155 | 51 | 16,206 | |||||||||
Balance at beginning of period (in shares) at Apr. 30, 2020 | 1,282,253 | |||||||||||||||
Balance at beginning of period at Apr. 30, 2020 | $ 13 | 28,207 | (8,385) | (3,625) | 16,210 | 48 | 16,258 | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||
Net earnings (loss) | 9 | 9 | 3 | 12 | ||||||||||||
Other comprehensive income | $ (131) | (131) | (131) | (131) | ||||||||||||
Comprehensive income (loss) | (122) | 3 | (119) | |||||||||||||
Stock-based compensation expense | 55 | 55 | 55 | |||||||||||||
Tax withholding related to vesting of employee stock plans | (7) | (7) | (7) | |||||||||||||
Issuance of common stock in connection with employee stock plans and other (in shares) | 3,753 | |||||||||||||||
Issuance of common stock in connection with employee stock plans and other | 20 | (1) | 19 | 19 | ||||||||||||
Balance at beginning of period (in shares) at Jul. 31, 2020 | 1,286,006 | |||||||||||||||
Balance at end of period at Jul. 31, 2020 | $ 13 | 28,275 | (8,377) | (3,756) | 16,155 | 51 | 16,206 | |||||||||
Balance at beginning of period (in shares) at Oct. 31, 2020 | 1,287,000 | 1,287,010 | ||||||||||||||
Balance at beginning of period at Oct. 31, 2020 | $ 16,096 | $ 13 | 28,350 | (8,375) | $ (25) | [2] | (3,939) | 16,049 | $ (25) | 47 | 16,096 | $ (25) | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||
Net earnings (loss) | 874 | 874 | 6 | 880 | ||||||||||||
Other comprehensive income | $ 308 | 308 | 308 | 308 | ||||||||||||
Comprehensive income (loss) | 1,182 | 6 | 1,188 | |||||||||||||
Stock-based compensation expense | 304 | 304 | 304 | |||||||||||||
Tax withholding related to vesting of employee stock plans | (72) | (72) | (72) | |||||||||||||
Issuance of common stock in connection with employee stock plans and other (in shares) | 20,053 | |||||||||||||||
Issuance of common stock in connection with employee stock plans and other | 50 | 50 | 50 | |||||||||||||
Cash dividends declared | (468) | (468) | (468) | |||||||||||||
Balance at beginning of period (in shares) at Jul. 31, 2021 | 1,307,000 | 1,307,063 | ||||||||||||||
Balance at end of period at Jul. 31, 2021 | $ 17,073 | $ 13 | 28,632 | (7,994) | (3,631) | 17,020 | 53 | 17,073 | ||||||||
Balance at beginning of period (in shares) at Apr. 30, 2021 | 1,304,138 | |||||||||||||||
Balance at beginning of period at Apr. 30, 2021 | $ 13 | 28,538 | (8,229) | (3,762) | 16,560 | 51 | 16,611 | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||
Net earnings (loss) | 392 | 392 | 2 | 394 | ||||||||||||
Other comprehensive income | $ 131 | 131 | 131 | 131 | ||||||||||||
Comprehensive income (loss) | 523 | 2 | 525 | |||||||||||||
Stock-based compensation expense | 86 | 86 | 86 | |||||||||||||
Tax withholding related to vesting of employee stock plans | (11) | (11) | (11) | |||||||||||||
Issuance of common stock in connection with employee stock plans and other (in shares) | 2,925 | |||||||||||||||
Issuance of common stock in connection with employee stock plans and other | 19 | 19 | 19 | |||||||||||||
Cash dividends declared | (157) | (157) | (157) | |||||||||||||
Balance at beginning of period (in shares) at Jul. 31, 2021 | 1,307,000 | 1,307,063 | ||||||||||||||
Balance at end of period at Jul. 31, 2021 | $ 17,073 | $ 13 | $ 28,632 | $ (7,994) | $ (3,631) | $ 17,020 | $ 53 | $ 17,073 | ||||||||
[1] | Represents the impact of the adoption of an accounting standard update that allows for the reclassification of stranded tax effects from accumulated other comprehensive loss toaccumulated deficit. | |||||||||||||||
[2] | Represents the impact of the adoption of the accounting standard on the measurement of credit losses on financial assets. |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) (Parenthetical) - $ / shares | 3 Months Ended | 9 Months Ended | |
Jul. 31, 2021 | Jul. 31, 2021 | Jul. 31, 2020 | |
Statement of Stockholders' Equity [Abstract] | |||
Cash dividends declared (in dollars per share) | $ 0.12 | $ 0.36 | $ 0.24 |
Overview and Summary of Signifi
Overview and Summary of Significant Accounting Policies | 9 Months Ended |
Jul. 31, 2021 | |
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 and governmental entities. 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 ("HP Co."), of 100% of the outstanding shares of Hewlett Packard Enterprise Company to HP Inc.'s stockholders (the "Separation"). Acquisitions On July 1, 2021, the Company entered into a definitive agreement to acquire Zerto Ltd., an industry leader in cloud data management and protection, in a transaction valued at $374 million. The transaction closed on August 31, 2021. Zerto's results of operations will be included within the Company's Storage segment. This acquisition expands HPE GreenLake and continues to deliver on Storage’s shift to a cloud-native, software-defined data services business. During the third quarter of fiscal 2021, the Company completed the acquisitions of Determined AI Inc., a leading player in the evolving machine learning software ecosystem and Ampool Inc., an innovative developer of a data platform designed to deliver a cloud-native, high performance Structured Query Language (“SQL”) analytics engine, for a purchase consideration of $117 million, which has primarily been allocated to goodwill of $86 million and amortizable intangible assets of $24 million. Determined AI’s results of operations have been included with High Performance Computing & Mission-Critical Solutions (HPC & MCS) segment. HPE will combine Determined AI’s unique software solution with its world-leading artificial intelligence and high performance computing offerings to enable machine learning engineers to easily implement and train machine learning models to provide faster and more accurate insights from their data in almost every industry. Ampool's results of operations have been included in the HPE Ezmeral software organization within Corporate Investments and Other segment and will play a pivotal role in accelerating hybrid analytics for customers. Subsequent event On September 7, 2021, the Company expects to redeem all $500 million aggregate principal amount of its outstanding 3.5% Notes due October 2021, and all $800 million aggregate principal amount of its outstanding Floating Rate Notes due October 2021. Basis of Presentation The 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, 2021 and October 31, 2020, its results of operations for the three and nine months ended July 31, 2021 and 2020, its cash flows for the nine months ended July 31, 2021 and 2020, and its statements of stockholders' equity for the three and nine months ended July 31, 2021 and 2020. The results of operations for the three and nine months ended July 31, 2021 and the cash flows for the nine months ended July 31, 2021 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, 2020, 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. 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 consolidates a Variable Interest Entity (“VIE”) where it has been determined that the Company is the primary beneficiary of the entity’s operation. In evaluating whether the Company is the primary beneficiary, the Company evaluates its power to direct the most significant activities of the VIE by considering the purpose and design of the entity and the risks the entity was designed to create and pass through to its variable interest holders. The Company also evaluates its economic interests in the VIE. 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 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 periods presented. Segment Realignment and Reclassifications Effective at the beginning of the first quarter of fiscal 2021, HPE implemented certain organizational changes to align its segment financial reporting more closely with its current business structure. These organizational changes are: (i) the transfer of the lifecycle event services business, previously reported within the Advisory and Professional Services ("A & PS") reportable segment to Compute, Storage and HPC & MCS reportable segments; (ii) the transfer of certain software and related services business, previously reported within the Compute, Storage and A & PS reportable segments to the Corporate Investments and Other reportable segment, to form a new Software operating segment; and (iii) the transfer of the remaining A & PS operating segment, previously reported as a separate reportable segment, to the Corporate Investments and Other reportable segment. As a result of these changes, the Corporate Investments and Other Segment now includes the A & PS operating segment, the Communications and Media Solutions operating segment, the Software operating segment, and Hewlett Packard Enterprise Labs which is responsible for research and development. Additionally, effective at the beginning of the first quarter of fiscal 2021, the Company has excluded stock-based compensation expense from its segment earnings from operations. The Company reflected these changes to its segment information retrospectively to the earliest period presented, which primarily resulted in the realignment of net revenue, operating profit and total assets for each of the segments as described above. These changes had no impact on Hewlett Packard Enterprise’s previously reported consolidated net revenue, net earnings, net earnings per share ("EPS") or total assets. Significant Accounting Policies Except for the change in certain accounting policies upon adoption of the accounting standards described below, there have been no significant changes to the Company's significant accounting policies described in PART II, Item 8, Note 1, "Overview and Summary of Significant Accounting Policies", of the Company's Annual Report on Form 10-K for the fiscal year ended October 31, 2020. Recently Adopted Accounting Pronouncements In January 2021, the FASB issued guidance to clarify that all derivative instruments affected by changes to the interest rates used for discounting, margining or contract price alignment can apply certain optional expedients and exceptions mentioned in its reference rate reform guidance even though they do not reference to LIBOR or a rate being discontinued. This guidance was effective upon issuance. The Company adopted the guidance in the first quarter of fiscal 2021 and there was no impact on its Condensed Consolidated Financial Statements upon adoption. In December 2019, the FASB amended the existing accounting standards for income taxes. The amendments clarify and simplify the accounting for income taxes by eliminating certain exceptions to the general principles. The Company adopted the guidance in the first quarter of fiscal 2021 and there was no material impact on its Condensed Consolidated Financial Statements. 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 adopted the guidance in the first quarter of fiscal 2021 and there was no material impact 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 pension plans. The Company adopted the guidance in the first quarter of fiscal 2021 and there was no impact on its Condensed Consolidated Financial Statements. However, the Company expects to have additional disclosures relating to retirement and post-retirement benefit plans in its Annual Report on Form 10-K for the fiscal year ended October 31, 2021. In June 2016, the FASB amended the existing accounting standards for the measurement of credit losses with additional amendments in 2018, 2019 and 2020. These amendments primarily require the measurement and recognition of current expected credit losses for financial assets held at amortized cost. The amended accounting standard replaces the existing incurred loss impairment model with an expected loss model, which requires the use of forward-looking information to calculate credit loss estimates. It also eliminates the concept of other-than-temporary impairment and requires credit losses related to available-for-sale debt securities to be recorded through an allowance for credit losses rather than as a reduction in the amortized cost basis of the securities. These changes will result in earlier recognition of credit losses. The Company adopted the Current Expected Credit Losses standard (the “CECL standard”) as of November 1, 2020 using the modified retrospective method, with the cumulative-effect adjustment recorded to the opening balance of Accumulated deficit within stockholders’ equity in the Condensed Consolidated Balance Sheets. The cumulative effect of adopting the CECL standard resulted in an increase of $28 million to the allowance for expected credit losses within financing receivables, and a corresponding increase of $25 million, net of $3 million of deferred taxes to Accumulated deficit as of November 1, 2020. The allowance for expected credit losses related to accounts receivables is comprised of a general reserve and a specific reserve. The Company may record a specific reserve for individual accounts when the Company becomes aware of specific customer circumstances, such as in the case of a bankruptcy filing or deterioration in the customer's operating results or financial position. If there are additional changes in circumstances related to the specific customer, the Company further adjusts estimates of the recoverability of receivables. The Company maintains an allowance for credit losses for all other customers based on a variety of factors, including the use of third-party credit risk models that generate quantitative measures of default probabilities based on market factors, the financial condition of customers and the length of time receivables are past due. These qualitative factors are subjective and require a degree of management judgement. The past due or delinquency status of a receivable is based on the contractual payment terms of the receivable. The Company establishes an allowance for expected credit losses related to accounts receivable, including unbilled receivables. The allowance for expected credit losses related to financing receivables is comprised of a general reserve and a specific reserve. The Company establishes a specific reserve for financing receivables with identified exposures, such as customer defaults, bankruptcy or other events, that make it unlikely the Company will recover its investment. For individually evaluated receivables, the Company determines the expected cash flow for the receivable, which includes consideration of estimated proceeds from disposition of the collateral and calculates an estimate of the potential loss and the probability of loss. For those accounts where a loss is considered probable, the Company records a specific reserve. The Company maintains a general reserve using a credit loss model on a regional basis and bases such percentages on several factors, including consideration of historical credit losses and portfolio delinquencies, trends in the overall weighted-average risk rating of the portfolio, current economic conditions, and forward-looking information, including reasonable and supportable forecasts. The Company believes the economic forecasts employed represent reasonable and supportable forecasts, followed by a reversion to long term trends. The Company excludes accounts evaluated as part of the specific reserve from the general reserve analysis. The Company generally writes off a receivable or records a specific reserve when a receivable becomes 180 days past due, or sooner if the Company determines that the receivable is not collectible. The Company’s debt securities are generally considered available-for-sale and are reported at fair value with unrealized gains and losses, net of applicable taxes, recorded in Accumulated other comprehensive loss in the Condensed Consolidated Balance Sheets. Realized gains and losses for available-for-sale securities are calculated based on the specific identification method and included in Interest and other, net in the Condensed Consolidated Statements of Earnings. The Company monitors its investment portfolio for potential impairment on a quarterly basis. When the carrying amount of an investment in debt securities exceeds its fair value and the decline in value is determined to be due to credit-related factors, the Company recognizes the impairment by way of an allowance for credit loss in Interest and other, net in the Condensed Consolidated Statement of Earnings while the impairment that is not credit related is recorded in Accumulated other comprehensive loss in the Condensed Consolidated Balance Sheets. Recently Enacted Accounting Pronouncements In January 2020, the FASB issued guidance to clarify certain interactions between the guidance to account for equity securities, the guidance to account for investments under the equity method of accounting, and the guidance to account for derivatives and hedging. The new guidance clarifies the application of measurement alternatives and the accounting for certain forward contracts and purchased options to acquire investments. The Company is required to adopt the guidance in the first quarter of fiscal 2022, though early adoption is permitted. The Company does not expect the impact on adoption of these amendments on its Consolidated Financial Statements to be material. |
Segment Information
Segment Information | 9 Months Ended |
Jul. 31, 2021 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information As described in Note 1, "Overview and Summary of Significant Accounting Policies", effective at the beginning of the first quarter of fiscal 2021, the Company implemented certain organizational changes to align its segment financial reporting more closely with its current business structure. Hewlett Packard Enterprise's operations are now organized into six reportable segments for financial reporting purposes: Compute, HPC & MCS, Storage, Intelligent Edge, Financial Services ("FS"), and Corporate Investments and Other. 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 the Company's business operations, which include, but are not limited to, customer base and homogeneity of products and technology. The six 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. Compute portfolio offers both general purpose servers for multi-workload computing and workload optimized servers to offer the best performance and value for demanding applications. This portfolio of products includes the HPE Proliant rack and tower servers; HPE BladeSystem, and HPE Synergy. Compute offerings also include related operational and support services. High Performance Computing & Mission-Critical Solutions portfolio offers specialized compute servers designed to support specific workloads. The HPC portfolio of products includes the HPE Apollo and Cray high performance computing products that are often sold as supercomputing systems, including exascale supercomputers. The MCS portfolio includes the HPE Superdome Flex, HPE Nonstop and HPE Integrity product lines. The HPC & MCS segment also includes the Converged Edge Systems business which consists of the HPE Moonshot and HPE Edgeline products. HPC & MCS offerings also include related operational and support services Storage portfolio offers workload optimized storage product and service offerings which include an intelligent hyperconverged infrastructure ("HCI") with HPE Nimble Storage dHCI and HPE SimpliVity. The portfolio also includes HPE Primera, HPE Nimble Storage, HPE Alletra and HPE 3PAR Storage for mission-critical and general-purpose workloads, HPE Recovery Manager Central, HPE StoreOnce, HPE Cloud Volumes Backup and Big Data solutions. Storage also provides solutions for secondary workloads and traditional tape, storage networking and disk products, such as HPE Modular Storage Arrays ("MSA") and HPE XP. Storage offerings also include related operational and support services. Intelligent Edge portfolio offers wired and wireless local area network ("LAN"), campus and data center switching, software-defined wide-area-networking, security, and associated services to enable secure connectivity for businesses of any size. The Intelligent Edge product portfolio includes products such as Wi-Fi access points, switches, routers, and sensors. The Intelligent Edge software and services portfolio includes software products for cloud-based management, network management, network access control, analytics and assurance, location services software and professional and support services, as well as as-a Service ("aaS") and consumption models for the Intelligent Edge portfolio of products. Financial Services provides flexible investment solutions, such as leasing, financing, IT consumption, 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. Corporate Investments and Other includes the Communications and Media Solutions business ("CMS") which primarily offers software and related services to the telecommunications industry; the Software business which offers HPE Ezmeral Container Platform and HPE Ezmeral Data Fabric, and incubates other software related technology innovation; the A & PS business which primarily offers consultative-led services, HPE and partner technology expertise and advice, implementation services as well as complex solution engagement capabilities; and the Hewlett Packard Labs which is responsible for research and development. Segment Policy There have been no 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, 2020, except for the organizational changes and the change in allocation of stock based compensation expense described in Note 1, "Overview and Summary of Significant Accounting Policies". Hewlett Packard Enterprise does not allocate to its segments certain operating expenses, which it manages at the corporate level. These unallocated operating costs include certain corporate costs and eliminations, stock-based compensation expense, amortization of initial direct costs, amortization of intangible assets, impairment of goodwill, transformation costs, disaster charges, acquisition, disposition and other related charges. Segment Operating Results Segment net revenue and operating results were as follows: Compute HPC & MCS Storage Intelligent Edge Financial Corporate Total In millions Three months ended July 31, 2021 Net revenue $ 3,033 $ 671 $ 1,154 $ 865 $ 842 $ 332 $ 6,897 Intersegment net revenue 71 70 22 2 2 — 167 Total segment net revenue $ 3,104 $ 741 $ 1,176 $ 867 $ 844 $ 332 $ 7,064 Segment earnings (loss) from operations $ 347 $ 29 $ 178 $ 137 $ 94 $ (28) $ 757 Three months ended July 31, 2020 Net revenue $ 3,265 $ 650 $ 1,109 $ 682 $ 807 $ 303 $ 6,816 Intersegment net revenue 144 17 23 2 4 — 190 Total segment net revenue $ 3,409 $ 667 $ 1,132 $ 684 $ 811 $ 303 $ 7,006 Segment earnings (loss) from operations $ 318 $ 47 $ 170 $ 71 $ 66 $ (68) $ 604 Nine months ended July 31, 2021 Net revenue $ 8,889 $ 2,081 $ 3,456 $ 2,465 $ 2,536 $ 1,003 $ 20,430 Intersegment net revenue 177 107 50 7 7 — 348 Total segment net revenue $ 9,066 $ 2,188 $ 3,506 $ 2,472 $ 2,543 $ 1,003 $ 20,778 Segment earnings (loss) from operations $ 1,024 $ 91 $ 604 $ 413 $ 269 $ (84) $ 2,317 Nine months ended July 31, 2020 Net revenue $ 8,796 $ 2,063 $ 3,406 $ 2,058 $ 2,494 $ 957 $ 19,774 Intersegment net revenue 298 50 64 11 9 1 433 Total segment net revenue $ 9,094 $ 2,113 $ 3,470 $ 2,069 $ 2,503 $ 958 $ 20,207 Segment earnings (loss) from operations $ 797 $ 156 $ 592 $ 240 $ 218 $ (172) $ 1,831 The reconciliation of segment operating results to Hewlett Packard Enterprise Condensed Consolidated Financial statements was as follows: Three Months Ended Nine Months Ended 2021 2020 2021 2020 In millions Net Revenue: Total segments $ 7,064 $ 7,006 $ 20,778 $ 20,207 Eliminations of intersegment net revenue (167) (190) (348) (433) Total Hewlett Packard Enterprise consolidated net revenue $ 6,897 $ 6,816 $ 20,430 $ 19,774 Earnings before taxes: Total segment earnings from operations $ 757 $ 604 $ 2,317 $ 1,831 Unallocated corporate costs and eliminations (84) (65) (186) (165) Stock-based compensation expense (86) (55) (294) (215) Amortization of initial direct costs (2) (3) (6) (9) Amortization of intangible assets (82) (95) (276) (299) Transformation costs (213) (357) (733) (646) Disaster charges (5) (2) (6) (24) Acquisition, disposition and other related charges (3) (15) (34) (82) Impairment of goodwill — — — (865) Interest and other, net (50) (71) (105) (158) Tax indemnification and related adjustments 76 (30) 60 (86) Non-service net periodic benefit credit 19 28 53 101 Earnings from equity interests 79 27 109 50 Total Hewlett Packard Enterprise consolidated earnings (loss) before taxes $ 406 $ (34) $ 899 $ (567) Total assets by segment and the reconciliation of segment assets to Hewlett Packard Enterprise consolidated total assets were as follows: As of July 31, 2021 October 31, 2020 In millions Compute $ 16,339 $ 14,962 HPC & MCS 6,502 6,245 Storage 6,674 6,438 Intelligent Edge 4,473 4,352 Financial Services 14,651 14,765 Corporate Investments and Other 1,244 1,124 Corporate and unallocated assets 6,554 6,129 Total Hewlett Packard Enterprise consolidated total assets $ 56,437 $ 54,015 The Company’s net revenue by geographic region was as follows: Three Months Ended July 31, Nine Months Ended July 31, 2021 2020 2021 2020 In millions Americas: United States $ 2,237 $ 2,362 $ 6,433 $ 6,586 Americas excluding U.S. 461 395 1,357 1,273 Total Americas $ 2,698 $ 2,757 $ 7,790 $ 7,859 Europe, Middle East and Africa 2,510 2,448 7,684 7,206 Asia Pacific and Japan 1,689 1,611 4,956 4,709 Total Hewlett Packard Enterprise consolidated net revenue $ 6,897 $ 6,816 $ 20,430 $ 19,774 |
Transformations Programs
Transformations Programs | 9 Months Ended |
Jul. 31, 2021 | |
Restructuring and Related Activities [Abstract] | |
Transformation Programs | Transformation Programs Transformation programs are comprised of the cost optimization and prioritization plan, and the HPE Next initiative. During the third quarter of fiscal 2020, the Company launched the cost optimization and prioritization plan which focuses on realigning the workforce to areas of growth, including a new hybrid workforce model called Edge-to-Office, real estate strategies and simplifying and evolving our product portfolio strategy. The changes to the workforce will vary by country, based on business needs, local legal requirements and consultations with employee works councils and other employee representatives, as appropriate. The implementation period of the cost optimization and prioritization plan is through fiscal 2023. During this time the Company expects to incur transformation costs predominantly related to labor restructuring, non-labor restructuring, IT investments, design and execution charges and real estate initiatives. During the third quarter of fiscal 2017, the Company launched an initiative called HPE Next to put in place a purpose-built company designed to compete and win in the markets where it participates. Through this program, the Company is simplifying the operating model, and streamlining our offerings, business processes and business systems to improve our execution. The implementation period of the HPE Next initiative is through fiscal 2023. As of October 31, 2020, the headcount exits under HPE Next Plan are complete. During the remaining implementation period, the Company expects to incur transformation costs predominantly related to IT infrastructure costs for streamlining, upgrading and simplifying back-end operations, and real estate initiatives. These costs are expected to be partially offset by gains from real estate sales. Transformation Costs During the three and nine months ended July 31, 2021, the Company incurred $147 million and $552 million, respectively, of charges related to the cost optimization and prioritization plan of which $146 million and $549 million were recorded within Transformation costs, and $1 million and $3 million, respectively, was recorded within Non-service net periodic benefit credit in the Condensed Consolidated Statements of Earnings. During the three and nine months ended July 31, 2020, the Company incurred $238 million of charges related to the cost optimization and prioritization plan which was recorded within Transformation costs in the Condensed Consolidated Statements of Earnings, the components of which were as follows: Three months ended July 31, Nine months ended July 31, 2021 2020 2021 2020 In millions Program management $ 17 $ 14 $ 72 $ 14 IT Costs 6 4 9 4 Restructuring charges 124 220 471 220 Total $ 147 $ 238 $ 552 $ 238 During the three and nine months ended July 31, 2021, the Company incurred $67 million and $184 million, respectively, and during the three and nine months ended July 31, 2020, the Company incurred $119 million and $408 million, respectively, of net charges associated with HPE Next which were recorded within Transformation costs in the Condensed Consolidated Statements of Earnings. The components of Transformation costs relating to HPE Next were as follows: Three months ended July 31, Nine months ended July 31, 2021 2020 2021 2020 In millions Program management $ 5 $ 10 $ 10 $ 28 IT costs 54 25 126 71 Restructuring charges 2 84 21 332 Gain on real estate sales — (7) (3) (44) Impairment on real estate assets — — 4 — Other 6 7 26 21 Total $ 67 $ 119 $ 184 $ 408 Restructuring Plan Restructuring activities related to the Company's employees and infrastructure under the cost optimization and prioritization plan and HPE Next Plan, were presented in the table below: Cost Optimization and Prioritization Plan HPE Next Plan Employee Infrastructure Employee Infrastructure In millions Liability as of October 31, 2020 $ 210 $ 68 $ 144 $ 52 Charges 199 272 — 21 Cash payments (214) (86) (94) (29) Non-cash items 1 (68) 3 (4) Liability as of July 31, 2021 $ 196 $ 186 $ 53 $ 40 Total costs incurred to date, as of July 31, 2021 $ 429 $ 371 $ 1,261 $ 246 Total expected costs to be incurred as of July 31, 2021 $ 700 $ 610 $ 1,261 $ 248 The current restructuring liability related to the transformation programs, reported in Condensed Consolidated Balance Sheets as of July 31, 2021 and October 31, 2020, was $263 million and $359 million, respectively, in accrued restructuring, and $29 million and $24 million, respectively, in Other accrued liabilities. The non-current restructuring liability related to the transformation programs, reported in Other non-current liabilities in the Condensed Consolidated Balance Sheets as of July 31, 2021 and October 31, 2020, was $183 million and $91 million, respectively. |
Retirement Benefit Plans
Retirement Benefit Plans | 9 Months Ended |
Jul. 31, 2021 | |
Retirement Benefits [Abstract] | |
Retirement Benefit Plans | Retirement Benefit Plans The Company's net pension benefit (credit) cost for defined benefit plans recognized in the Condensed Consolidated Statements of Earnings was as follows: Three months ended July 31, Nine months ended July 31, 2021 2020 2021 2020 In millions Service cost $ 24 $ 23 $ 73 $ 69 Interest cost (1) 30 35 89 106 Expected return on plan assets (1) (121) (133) (360) (402) Amortization and deferrals (1) : Actuarial loss 74 65 223 194 Prior service benefit (3) (3) (10) (10) Net periodic benefit (credit) cost 4 (13) 15 (43) Settlement loss (1) — 7 1 8 Special termination benefits (1) 1 — 3 1 Total net benefit (credit) cost $ 5 $ (6) $ 19 $ (34) (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
Taxes on Earnings | 9 Months Ended |
Jul. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Taxes on Earnings | Taxes on Earnings Provision for Taxes For the three and nine months ended July 31, 2021, the Company recorded income tax expense of $14 million and $25 million, respectively, which reflect an effective tax rate of 3.4% and 2.8%, respectively. For the three and nine months ended July 31, 2020, the Company recorded income tax benefit of $43 million and $88 million, respectively, which reflect an effective tax rate of 126.5% and 15.5%, respectively. The effective tax rate generally differs from the U.S. federal statutory rate of 21% due to favorable tax rates associated with certain earnings from the Company’s operations in lower tax jurisdictions throughout the world but are also impacted by discrete tax adjustments during each fiscal period. The effective tax rate for the nine months ended July 31, 2020 also included the effects of the non-deductible goodwill impairment. For the three and nine months ended July 31, 2021, the Company recorded $99 million and $222 million of net income tax benefits, respectively, related to various items discrete to the period. For the three months ended July 31, 2021, this amount primarily included $88 million of deferred income tax benefits related to tax law changes and $31 million of income tax benefits related to transformation costs, and acquisition, disposition and other related charges, partially offset by income tax charges related to the recovery of two social contribution taxes in Brazil ("PIS" and "COFINS") of $5 million and $23 million, respectively. For the nine months ended July 31, 2021, this amount primarily included $138 million of income tax benefits related to transformation costs, and acquisition, disposition and other related charges, $88 million of deferred income tax benefits related to tax law changes, and $30 million of income tax benefits related to the change in pre-Separation tax liabilities, primarily those for which we share joint and several liability with HP Inc. and for which we are indemnified by HP Inc., partially offset by income tax charges related to the recovery of PIS and COFINS of $5 million and $23 million, respectively. For the three and nine months ended July 31, 2020, the Company recorded $86 million and $253 million of net income tax benefits, respectively, related to various items discrete to the period. For the three months ended July 31, 2020, the amount primarily included $72 million of income tax benefits related to transformation costs, and acquisition, disposition and other related charges and $30 million of income tax benefits related to tax rate changes on deferred taxes. For the nine months ended July 31, 2020, the amount primarily included $120 million of income tax benefits related to transformation costs, and acquisition, disposition and other related charges, $57 million of income tax benefits related to Indian distribution tax rate changes, $56 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 indemnified by HP Inc., and $30 million of income tax benefits related to tax rate changes on deferred taxes. Uncertain Tax Positions As of July 31, 2021 and October 31, 2020, the amount of unrecognized tax benefits was $2.1 billion and $2.2 billion, respectively, of which up to $709 million and $731 million, respectively, would affect the Company's effective tax rate if realized as of their respective periods. For tax liabilities pertaining to unrecognized tax benefits, the Company recognizes interest income from favorable settlements and interest expense and penalties in (Provision) benefit for taxes in the Condensed Consolidated Statements of Earnings. As of July 31, 2021 and October 31, 2020, the Company had accrued $127 million and $119 million, respectively, for interest and penalties in the Condensed Consolidated Balance Sheets. The Company engages in continuous discussions and negotiations with tax authorities regarding tax matters in various jurisdictions. The Company does not expect complete resolution of any U.S. Internal Revenue Service ("IRS") 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 resolution of certain intercompany transactions, 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 $75 million within the next 12 months. Deferred Tax Assets and Liabilities Deferred tax assets and liabilities included in the Condensed Consolidated Balance Sheets were as follows: As of July 31, 2021 October 31, 2020 In millions Deferred tax assets $ 2,025 $ 1,778 Deferred tax liabilities (384) (290) Deferred tax assets net of deferred tax liabilities $ 1,641 $ 1,488 |
Balance Sheet Details
Balance Sheet Details | 9 Months Ended |
Jul. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Balance Sheet Details | Balance Sheet Details Balance sheet details were as follows: Cash, cash equivalents and restricted cash As of July 31, 2021 October 31, 2020 In millions Cash and cash equivalents $ 5,293 $ 4,233 Restricted cash (1) 359 388 Total $ 5,652 $ 4,621 (1) Restricted cash is included within Other current assets in the accompanying Condensed Consolidated Balance Sheets and is primarily related to cash received under the Company's collateral securities agreements for its derivative instruments and cash restricted under the fixed-term securitization program for the issuance of asset-backed debt securities. Inventory As of July 31, 2021 October 31, 2020 In millions Finished goods $ 1,373 $ 1,197 Purchased parts and fabricated assemblies 2,569 1,477 Total $ 3,942 $ 2,674 Property, Plant and Equipment As of July 31, 2021 October 31, 2020 In millions Land $ 75 $ 89 Buildings and leasehold improvements 1,697 1,886 Machinery and equipment, including equipment held for lease 9,855 9,624 11,627 11,599 Accumulated depreciation (6,117) (5,974) Total $ 5,510 $ 5,625 Warranties The Company's aggregate product warranty liability as of July 31, 2021, and changes were as follows: Nine Months Ended In millions Balance at beginning of period $ 385 Charges 159 Adjustments related to pre-existing warranties (27) Settlements made (180) Balance at end of period $ 337 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, 2021 October 31, 2020 In millions Accounts receivable, net Accounts receivable $ 3,125 $ 3,227 Unbilled receivables 214 205 Allowances (42) (46) Total $ 3,297 $ 3,386 The allowances for credit losses related to accounts receivable and changes therein were as follows: As of July 31, 2021 October 31, 2020 In millions Balance at beginning of the period $ 46 $ 31 Provision for credit losses 8 29 Write off's, net of recoveries (12) (14) Balance at end of the period $ 42 $ 46 Sale of Trade Receivables The Company has third-party revolving short-term financing arrangements intended to facilitate the working capital requirements of certain customers. During the three and nine months ended July 31, 2021, the Company sold $1 billion and $3.1 billion of trade receivables, respectively. During the fiscal year ended October 31, 2020, the Company sold $3.9 billion of trade receivables. The Company recorded an obligation of $66 million and $75 million in Notes payable and short-term borrowings in its Condensed Consolidated Balance Sheets as of July 31, 2021 and October 31, 2020 respectively, related to the trade receivables sold and collected from the third-party for which the revenue recognition was deferred. Contract Liabilities Contract liabilities consist of deferred revenue. The aggregate balance of current and non-current deferred revenue was $6.4 billion and $6.2 billion as of July 31, 2021 and October 31, 2020, respectively. During the nine months ended July 31, 2021, approximately $2.7 billion of the deferred revenue as of October 31, 2020 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, 2021, the aggregate amount of remaining performance obligations was $6.4 billion. The Company expects to recognize approximately 21% of this amount as revenue over the remainder of the fiscal year. Costs to Obtain a Contract As of July 31, 2021, the current and non-current portions of the capitalized costs to obtain a contract were $60 million and $86 million, respectively. As of October 31, 2020, the current and non-current portions of the capitalized costs to obtain a contract were $54 million and $76 million, respectively. The current and non-current portions of the capitalized costs to obtain a contract were included in Other current assets, and Long-term financing receivables and other assets, respectively, in the Condensed Consolidated Balance Sheet. For the three and nine months ended July 31, 2021, the Company amortized $16 million and $48 million respectively, of capitalized costs to obtain a contract. For the three and nine months ended July 31, 2020, the Company amortized $15 million and $43 million respectively, of capitalized costs to obtain a contract. The amortized capitalized costs to obtain a contract are included in Selling, general and administrative expense in the Condensed Consolidated Statement of Earnings. |
Accounting for Leases as a Less
Accounting for Leases as a Lessor | 9 Months Ended |
Jul. 31, 2021 | |
Leases [Abstract] | |
Accounting for Leases as a Lessor | Accounting for Leases as a Lessor Financing receivables represent sales-type and direct-financing leases of the Company and third-party products. These receivables typically have terms ranging from two As of July 31, 2021 October 31, 2020 In millions Minimum lease payments receivable $ 9,346 $ 9,448 Unguaranteed residual value 386 364 Unearned income (725) (754) Financing receivables, gross 9,007 9,058 Allowance for credit losses (234) (154) Financing receivables, net 8,773 8,904 Less: current portion (3,814) (3,794) Amounts due after one year, net $ 4,959 $ 5,110 As of July 31, 2021 and October 31, 2020, scheduled maturities of the Company's minimum lease payments receivable were as follows: As of July 31, 2021 October 31, 2020 Fiscal year In millions Remainder of fiscal 2021 $ 1,496 $ 4,182 2022 3,389 2,662 2023 2,306 1,572 2024 1,326 720 2025 609 252 Thereafter 220 60 Total undiscounted cash flows $ 9,346 $ 9,448 Present value of lease payments (recognized as finance receivables) $ 8,621 $ 8,694 Unearned income $ 725 $ 754 Sale of Financing Receivables The Company enters into arrangements to transfer the contractual payments due under certain financing receivables to third party financial institutions. During the three and nine months ended July 31, 2021 the Company sold $30 million and $110 million of financing receivables, respectively. During the fiscal year ended October 31, 2020, the Company sold $103 million of financing receivables. Credit Quality Indicators Due to the homogeneous nature of its leasing transactions, the Company manages its financing receivables on an aggregate basis when assessing and monitoring credit risk. Credit risk is generally diversified due to the large number of entities comprising the Company's customer base and their dispersion across many different industries and geographic regions. The Company evaluates the credit quality of an obligor at lease inception and monitors that credit quality over the term of a transaction. The Company assigns risk ratings to each lease based on the creditworthiness of the obligor and other variables that augment or mitigate the inherent credit risk of a particular transaction and periodically updates the risk ratings when there is a change in the underlying credit quality. Such variables include the underlying value and liquidity of the collateral, the essential use of the equipment, the term of the lease, and the inclusion of credit enhancements, such as guarantees, letters of credit or security deposits. The credit risk profile of financing receivables, based on internal risk ratings as of July 31, 2021, presented on amortized cost basis by year of origination was as follows: As of July 31, 2021 Risk Rating Low Moderate High Fiscal Year In millions 2021 $ 1,341 $ 1,156 $ 40 2020 1,607 1,203 94 2019 965 880 95 2018 469 491 88 2017 and prior 198 271 109 Total $ 4,580 $ 4,001 $ 426 The credit risk profile of gross financing receivables, based on internal risk ratings as of October 31, 2020, was as follows: As of October 31, 2020 In millions Risk Rating: Low $ 4,590 Moderate 4,091 High 377 Total $ 9,058 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. Effective November 1, 2020, under the new guidance for credit losses, the Company discloses its credit quality by year of origination. The credit quality indicators do not reflect any mitigation actions taken to transfer credit risk to third parties. Allowance for Credit Losses The allowance for credit losses for financing receivables as of July 31, 2021 and October 31, 2020 and the respective changes during the nine and twelve months then ended were as follows: As of July 31, 2021 October 31, 2020 In millions Balance at beginning of period $ 154 $ 131 Adjustment for adoption of the new credit loss standard 28 — Provision for credit losses 59 43 Adjustment to the existing allowance 19 — Write-offs (26) (20) Balance at end of period $ 234 $ 154 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, 2021 October 31, 2020 In millions Billed: (1) Current 1-30 days $ 347 $ 340 Past due 31-60 days 38 43 Past due 61-90 days 17 22 Past due > 90 days 121 140 Unbilled sales-type and direct-financing lease receivables 8,484 8,513 Total gross financing receivables $ 9,007 $ 9,058 Gross financing receivables on non-accrual status (2) $ 285 $ 364 Gross financing receivables 90 days past due and still accruing interest (2) $ 92 $ 74 (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, 2021 October 31, 2020 In millions Equipment leased to customers $ 7,166 $ 7,184 Accumulated depreciation (3,223) (3,157) Total $ 3,943 $ 4,027 Minimum future rentals on non-cancelable operating leases related to leased equipment were as follows: As of July 31, 2021 Fiscal year In millions Remainder of fiscal 2021 $ 510 2022 1,524 2023 873 2024 300 2025 44 Thereafter 11 Total $ 3,262 If a lease is classified as an operating lease, the Company records lease revenue on a straight line basis over the lease term. At commencement of an operating lease, initial direct costs are deferred and are expensed over the lease term on the same basis as the lease revenue is recorded. The following table presents amounts included in the Condensed Consolidated Statement of Earnings related to lessor activity: Three Months Ended July 31, Nine Months Ended July 31, 2021 2020 2021 2020 In millions Sales-type leases and direct financing leases: Interest income $ 125 $ 115 $ 371 $ 343 Lease income - operating leases 598 588 1,797 1,821 Total lease income $ 723 $ 703 $ 2,168 $ 2,164 Variable Interest Entities The Company has issued asset-backed debt securities under a fixed-term securitization program to private investors. The asset-backed debt securities are collateralized by the U.S. fixed-term financing receivables and leased equipment in the offering, which is held by a Special Purpose Entity (“SPE”). The SPE meets the definition of a VIE and is consolidated, along with the associated debt, into the Condensed Consolidated Financial Statements as the Company is the primary beneficiary of the VIE. The SPE is a bankruptcy-remote legal entity with separate assets and liabilities. The purpose of the SPE is to facilitate the funding of customer receivables and leased equipment in the capital markets. The Company’s risk of loss related to securitized receivables and leased equipment is limited to the amount by which the Company’s right to receive collections for assets securitized exceeds the amount required to pay interest, principal, and fees and expenses related to the asset-backed securities. The following table presents the assets and liabilities held by the consolidated VIE as of July 31, 2021, which are included in the Condensed Consolidated Balance Sheets. The assets in the table below include those that can be used to settle the obligations of the VIE. Additionally, general creditors do not have recourse to the assets of the VIE. As of July 31, 2021 October 31, 2020 Assets held by VIE In millions Other current assets $ 179 $ 120 Financing receivables Short-term $ 805 $ 531 Long-term $ 882 $ 584 Property, plant and equipment $ 1,010 $ 665 Liabilities held by VIE Notes payable and short-term borrowings, net of unamortized debt issuance costs $ 1,389 $ 886 Long-term debt, net of unamortized debt issuance costs $ 1,198 $ 834 |
Goodwill
Goodwill | 9 Months Ended |
Jul. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Goodwill The following table represents the carrying value of goodwill, by reportable segment as of October 31, 2020 and July 31, 2021: Compute HPC & MCS Storage Intelligent Edge Financial Services Corporate Investments and Other Total In millions Balance at October 31, 2020 (1) (2) $ 7,532 $ 3,616 $ 3,946 $ 2,566 $ 144 213 $ 18,017 Goodwill from current period acquisitions — 86 — — — — 86 Goodwill adjustments — — — (11) — — (11) Balance at July 31, 2021 (2) $ 7,532 $ 3,702 $ 3,946 $ 2,555 $ 144 $ 213 $ 18,092 (1) As a result of the organizational realignments which were effective as of November 1, 2020, (described in Note 1, "Overview and Summary of Significant Accounting Policies"), $213 million of goodwill was reallocated from Storage segment to Corporate Investments and Other segment as of the beginning of the period using a relative fair value approach. (2) Goodwill is net of accumulated impairment losses of $953 million. Of this amount, $865 million related to the HPC & MCS reporting unit was recorded during the second quarter of 2020 and $88 million related to the CMS reporting unit within Corporate Investments and Other was recorded during the fourth quarter of fiscal 2018. There is no goodwill remaining in the CMS reporting unit. Effective at the beginning of the first quarter of fiscal 2021, the Company's operations were realigned into six segments for financial reporting purposes. The Company's reporting units containing goodwill are consistent with the reportable segments identified in Note 2, "Segment Information" with the exception of Corporate Investments and Other which is made up of three reporting units, A & PS, CMS, and Software, of which only Software has goodwill. As a result of this realignment, the Company performed an interim quantitative goodwill impairment test for all of its reporting units as of November 1, 2020, which did not result in any goodwill impairment charges. The fair value of all reporting units continued to exceed the carrying value of their net assets. The excess of fair value over carrying value for our reporting units ranged from approximately 8% to 37% of the respective carrying values. In order to evaluate the sensitivity of the estimated fair value of our reporting units in the goodwill impairment test, the Company applied a hypothetical 10% decrease to the fair value of each reporting unit. Based on the results of this hypothetical 10% decrease all of the reporting units had an excess of fair value over carrying value, with the exception of HPC & MCS reporting unit. As of the interim test date, the HPC & MCS reporting unit has goodwill of $3.6 billion and an excess of fair value over carrying value of net assets of 8%. The fair value of the HPC & MCS reporting unit was based on a weighting of fair values derived most significantly from the income approach, and to a lesser extent, the market approach. The HPC & MCS business is facing challenges on the current and projected future results as the revenue growth is dependent on timing of delivery and related achievement of customer acceptance milestones. If the Company is not successful in addressing these challenges, the projected revenue growth rates or operating margins could decline resulting in a decrease in the fair value of the HPC & MCS reporting unit. The fair value of the HPC & MCS reporting unit could also be negatively impacted by changes in its weighted average cost of capital, changes in management's business strategy or significant and sustained declines in the stock price, which could result in an indicator of impairment. In addition, should economic conditions deteriorate, estimates of future cash flows for each of the Company's reporting units may be insufficient to support the carrying value and the goodwill assigned to them, requiring impairment charges. Further impairment charges, if any, may be material to the results of operations and financial position. 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, 2021 | |
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. The following table presents the Company's assets and liabilities that are measured at fair value on a recurring basis: As of July 31, 2021 As of October 31, 2020 Fair Value Fair Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Remaining Inputs (Level 2) Significant Other Unobservable Remaining Inputs (Level 3) Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Remaining Inputs (Level 2) Significant Other Unobservable Remaining Inputs (Level 3) Total In millions Assets Cash Equivalents and Investments: Time deposits $ — $ 1,398 $ — $ 1,398 $ — $ 939 $ — $ 939 Money market funds 2,003 — — 2,003 1,167 — — 1,167 Equity securities 2 — 92 94 — — — — Foreign bonds 1 125 — 126 — 125 — 125 Other debt securities — — 43 43 — — 21 21 Derivative Instruments: Interest rate contracts — 153 — 153 — 220 — 220 Foreign exchange contracts — 211 — 211 — 290 — 290 Other derivatives — 1 — 1 — — — — Total assets $ 2,006 $ 1,888 $ 135 $ 4,029 $ 1,167 $ 1,574 $ 21 $ 2,762 Liabilities Derivative Instruments: Interest rate contracts $ — $ — $ — $ — $ — $ 2 $ — $ 2 Foreign exchange contracts — 190 — 190 — 189 — 189 Other derivatives — — — — — 3 — 3 Total liabilities $ — $ 190 $ — $ 190 $ — $ 194 $ — $ 194 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. Other Fair Value Disclosures Short-Term and Long-Term Debt: As of July 31, 2021 and October 31, 2020, the estimated fair value of the Company's short-term and long-term debt was $17.6 billion and $17.1 billion, respectively. As of July 31, 2021 and October 31, 2020, the carrying value of the Company's short-term and long-term debt was $16.2 billion and $15.9 billion, respectively. If measured at fair value in the Consolidated Balance Sheets, short-term and long-term debt would be classified in Level 2 of the fair value hierarchy. Equity investments without readily determinable fair value: Equity Investments are recorded at cost and measured at fair value, when they are deemed to be impaired or when there is an adjustment from observable price changes. During the nine months ended July 31, 2021, the Company recognized a gain of $25 million, in Interest and other, net in the Condensed Consolidated Statements of Earnings, based on observable price changes for certain equity investments without readily determinable fair value. If measured at fair value in the Consolidated Balance Sheets, these would generally be classified in Level 3 of the fair value hierarchy. Non-Financial Assets: The Company's non-financial assets, such as intangible assets, goodwill and property, plant and equipment, are recorded at cost. The Company records right-of-use ("ROU") assets based on the lease liability, adjusted for lease prepayments, lease incentives received, and the lessee's initial direct costs. Fair value adjustments are made to these non-financial assets in the period an impairment charge is recognized. During the three and nine months ended July 31, 2021, the Company recorded a ROU asset impairment charge of $4 million and $72 million, respectively in Transformation costs in the Condensed Consolidated Statements of Earnings as the carrying value of certain ROU assets exceeded its fair value. If measured at fair value in the Condensed Consolidated Balance Sheets, these would generally be classified in Level 3 of the fair value hierarchy. |
Financial Instruments
Financial Instruments | 9 Months Ended |
Jul. 31, 2021 | |
Investments, All Other Investments [Abstract] | |
Financial Instruments | Financial Instruments Cash Equivalents and Available-for-Sale Debt Investments Cash equivalents and available-for-sale debt investments were as follows: As of July 31, 2021 As of October 31, 2020 Cost Gross Unrealized Gain Fair Cost Gross Unrealized Gain Fair In millions Cash Equivalents: Time deposits $ 1,398 $ — $ 1,398 $ 939 $ — $ 939 Money market funds 2,003 — 2,003 1,167 — 1,167 Total cash equivalents 3,401 — 3,401 2,106 — 2,106 Available-for-Sale Debt Investments: Foreign bonds 110 16 126 108 17 125 Other debt securities 42 1 43 20 1 21 Total available-for-sale debt investments 152 17 169 128 18 146 Total cash equivalents and available-for-sale debt investments $ 3,553 $ 17 $ 3,570 $ 2,234 $ 18 $ 2,252 As of July 31, 2021 and October 31, 2020, 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 of the U.S. as of July 31, 2021 and October 31, 2020. 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, 2021 Amortized Cost Fair Value In millions Due in one to five years $ 25 $ 25 Due in more than five years 127 144 $ 152 $ 169 Non-marketable equity investments in privately held companies are included in Long-term financing receivables and other assets in the Condensed Consolidated Balance Sheets. These non-marketable equity investments are carried either at fair value or under the measurement alternative. The carrying amount of those non-marketable equity investments accounted for under the measurement alternative amounted to $252 million and $295 million as of July 31, 2021 and October 31, 2020, respectively. During the nine months ended July 31, 2021, the Company recorded an unrealized gain of $25 million on these investments. The carrying amount of those non-marketable equity investments accounted for under the fair value option amounted to $92 million as of July 31, 2021. During the nine months ended July 31, 2021, the Company recorded an unrealized gain of $34 million on these investments. 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 amounted to $2.3 billion and $2.2 billion as of July 31, 2021 and October 31, 2020. For the three and nine months ended July 31, 2021, the Company recorded earnings from equity interests of $79 million and $109 million, 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, 2021 As of October 31, 2020 Fair Value Fair Value Outstanding Other Long-Term Other Long-Term Outstanding Other Long-Term Other Long-Term In millions Derivatives designated as hedging instruments Fair value hedges: Interest rate contracts $ 3,850 $ — $ 153 $ — $ — $ 3,850 $ — $ 220 $ — $ — Cash flow hedges: Foreign currency contracts 7,872 89 46 65 62 7,652 75 85 95 38 Interest rate contracts — — — — — 500 — — 2 — Net investment hedges: Foreign currency contracts 1,821 25 24 18 20 1,804 34 44 11 9 Total derivatives designated as hedging instruments 13,543 114 223 83 82 13,806 109 349 108 47 Derivatives not designated as hedging instruments Foreign currency contracts 5,923 20 7 23 2 6,157 43 9 35 1 Other derivatives 113 1 — — — 105 — — 3 — Total derivatives not designated as hedging instruments 6,036 21 7 23 2 6,262 43 9 38 1 Total derivatives $ 19,579 $ 135 $ 230 $ 106 $ 84 $ 20,068 $ 152 $ 358 $ 146 $ 48 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. The 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, 2021 In the Condensed Consolidated Balance Sheets (i) (ii) (iii) = (i)–(ii) (iv) (v) (vi) = (iii)–(iv)–(v) Gross Amounts Not Offset Gross Gross Net Amount Derivatives Financial Net Amount In millions Derivative assets $ 365 $ — $ 365 $ 154 $ 203 (1) $ 8 Derivative liabilities $ 190 $ — $ 190 $ 154 $ 30 (2) $ 6 As of October 31, 2020 In the Condensed Consolidated Balance Sheets (i) (ii) (iii) = (i)–(ii) (iv) (v) (vi) = (iii)–(iv)–(v) Gross Amounts Not Offset Gross Gross Net Amount Derivatives Financial Net Amount In millions Derivative assets $ 510 $ — $ 510 $ 137 $ 321 (1) $ 52 Derivative liabilities $ 194 $ — $ 194 $ 137 $ 55 (2) $ 2 (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, 2021, of the $30 million of collateral posted, $5 million was in cash and $25 million was through re-use of counterparty collateral. As of October 31, 2020, $55 million of collateral posted was entirely by way of re-use of counterparty collateral. The amounts recorded on the Condensed Consolidated Balance Sheets related to cumulative basis adjustments for fair value hedges were as follows: Carrying amount of the hedged assets/ (liabilities) Cumulative amount of fair value hedging adjustment included in the carrying amount of the hedged assets/ (liabilities) As of As of July 31, 2021 October 31, 2020 July 31, 2021 October 31, 2020 In millions In millions Long-term debt $ (3,994) $ (4,059) $ (153) $ (220) The pre-tax effect of derivative instruments in cash flow and net investment hedging relationships recognized in Other Comprehensive Income ("OCI") were as follows: Gains (Losses) Recognized in OCI on Derivatives Three months ended July 31, 2021 Three months ended July 31, 2020 Nine months ended July 31, 2021 Nine months ended July 31, 2020 In millions Derivatives in Cash Flow Hedging relationship Foreign exchange contracts $ 101 $ (456) $ (183) $ (79) Interest rate contracts — — (6) Derivatives in Net Investment Hedging relationship Foreign exchange contracts 16 (83) (61) 50 Total $ 117 $ (539) $ (244) $ (35) As of July 31, 2021, the Company expects to reclassify an estimated net accumulated other comprehensive gain of approximately $42 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. Effect of Derivative Instruments on the Condensed Consolidated Statements of Earnings The pre-tax effect of derivative instruments on the Condensed Consolidated Statements of Earnings were as follows: Gains (Losses) Recognized in Income Three months ended July 31, 2021 Three months ended July 31, 2020 Nine months ended July 31, 2021 Nine months ended July 31, 2020 Net revenue Interest and other, net Net revenue Interest and other, net Net revenue Interest and other, net Net revenue Interest and other, net In millions Total amounts of income and expense line items presented in the Condensed Consolidated Statements of Earnings in which the effects of fair value hedges, cash flow hedges and derivatives not designated as hedging instruments are recorded $ 6,897 $ (50) $ 6,816 $ (71) $ 20,430 $ (105) $ 19,774 $ (158) Gains (losses) on derivatives in fair value hedging relationships Interest rate contracts Hedged items $ — $ (3) $ — $ (13) $ — $ 67 $ — $ (198) Derivatives designated as hedging instruments — 3 — 13 — (67) — 198 Gains (losses) on derivatives in cash flow hedging relationships Foreign exchange contracts Amount of gains (losses) reclassified from accumulated other comprehensive income into income (14) 50 23 (264) (113) (147) 97 (55) Interest rate contracts Amount of gains (losses) reclassified from accumulated other comprehensive income into income — — — (1) — (2) — (1) Gains (losses) on derivatives not designated as hedging instruments Foreign exchange contracts — (33) — 8 — (61) — 53 Other derivatives — (1) — (6) — 3 — (1) Total gains (losses) $ (14) $ 16 $ 23 $ (263) $ (113) $ (207) $ 97 $ (4) |
Borrowings
Borrowings | 9 Months Ended |
Jul. 31, 2021 | |
Debt Disclosure [Abstract] | |
Borrowings | Borrowings Notes Payable, Short-Term Borrowings and Long-Term Debt Notes payable, short-term borrowings, including the current portion of long-term debt, and long-terms debt were as follows: As of July 31, 2021 October 31, 2020 In millions Current portion of long-term debt $ 2,741 $ 2,768 FS commercial paper 694 677 Notes payable to banks, lines of credit and other 301 310 Total notes payable and short-term borrowings $ 3,736 $ 3,755 Long-term debt 12,489 12,186 Total Debt $ 16,225 $ 15,941 Unsecured Senior Notes In March 2021, the Company repaid $500 million of three-month USD LIBOR plus 0.68% Senior Notes on their original maturity date. Asset-backed Debt Securities In June 2021, the Company issued $753 million of asset-backed debt securities in six tranches at a weighted average price of 99.99% and a weighted average interest rate of 0.58%, payable monthly from August 2021 with a stated final maturity date of March 2029. In March 2021, the Company issued $1.0 billion of asset-backed debt securities in six tranches at a weighted average price of 99.99% and a weighted average interest rate of 0.49%, payable monthly from April 2021 with a stated final maturity date of March 2031. Commercial Paper |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Jul. 31, 2021 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders' Equity The components of Accumulated other comprehensive loss, net of taxes as of July 31, 2021, and changes during the nine months ended July 31, 2021 were as follows: Net unrealized Net unrealized Unrealized Cumulative Accumulated In millions Balance at beginning of period $ 18 $ (7) $ (3,473) $ (477) $ (3,939) Other comprehensive income (loss) before reclassifications (1) (183) 29 20 (135) Reclassifications of (gains) losses into earnings — 262 214 — 476 Tax (provision) benefit — (14) (15) (4) (33) Balance at end of period $ 17 $ 58 $ (3,245) $ (461) $ (3,631) The components of Accumulated other comprehensive loss, net of taxes as of July 31, 2020, and changes during the nine months ended July 31, 2020 were as follows: Net unrealized Net unrealized Unrealized Cumulative Accumulated In millions Balance at beginning of period $ 23 $ 53 $ (3,366) $ (437) $ (3,727) Effect of change in accounting principle (1) — (10) — (33) (43) Other comprehensive income (loss) before reclassifications — (85) (10) (46) (141) Reclassifications of (gains) losses into earnings (8) (41) 191 — 142 Tax (provision) benefit — 20 (11) 4 13 Balance at end of period $ 15 $ (63) $ (3,196) $ (512) $ (3,756) (1) Reflects the impact of the adoption of an accounting standard update that allows for the reclassification of stranded tax effects from accumulated other comprehensive loss to accumulated deficit. Share Repurchase Program On April 6, 2020, the Company announced that it suspended purchases under its share repurchase program in response to the global economic uncertainty that resulted from the worldwide spread of COVID-19. As of July 31, 2021, the Company had a remaining authorization of $2.1 billion for future share repurchases. |
Net Earnings (Loss) Per Share
Net Earnings (Loss) Per Share | 9 Months Ended |
Jul. 31, 2021 | |
Earnings Per Share [Abstract] | |
Net Earnings (Loss) Per Share | Net Earnings (Loss) Per ShareThe 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 outstanding 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, 2021 2020 2021 2020 In millions, except per share amounts Numerator: Net earnings (loss) $ 392 $ 9 $ 874 $ (479) Denominator: Weighted-average shares used to compute basic net EPS 1,314 1,292 1,308 1,294 Dilutive effect of employee stock plans 24 8 20 — Weighted-average shares used to compute diluted net EPS 1,338 1,300 1,328 1294 Net earnings (loss) per share: Basic $ 0.30 $ 0.01 $ 0.67 $ (0.37) Diluted $ 0.29 $ 0.01 $ 0.66 $ (0.37) Anti-dilutive weighted-average stock awards (1) 1 21 7 48 (1) The Company excludes shares potentially issuable under employee stock plans that could dilute basic net EPS in the future from the calculation of diluted net earnings per share, as their effect, if included, would have been anti-dilutive for the periods presented. |
Litigation and Contingencies
Litigation and Contingencies | 9 Months Ended |
Jul. 31, 2021 | |
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, 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, 2021, 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 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 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, April 11, 2016, and January 15, 2019, but were canceled at the request of the Customs Tribunal. The hearing was again rescheduled for January 20, 2021 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 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 (collectively, “Defendants”) 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 age 40 years 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. Following the filing of Plaintiffs' Fourth Amended Complaint, Plaintiffs filed a Motion for Preliminary Class Certification on December 30, 2020. On April 14, 2021, Plaintiffs’ Motion for Conditional Class Certification was granted. The conditionally certified collective action consists of all individuals who had their employment terminated by Defendants pursuant to a WFR Plan on or after November 1, 2015, and who were 40 years or older at the time of such termination. The collective action excludes all individuals who signed a Waiver and General Release Agreement or an Agreement to Arbitrate Claims. 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. Trial 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. 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 million and will be recorded upon receipt. On June 14, 2021, the California Court of Appeal affirmed the judgment of the trial court. Oracle filed a Petition for Rehearing with the California Court of Appeal, which was denied on July 8, 2021. On July 26, 2021, Oracle filed a Petition for Review with the California Supreme Court. HP, Inc. filed an Answer to the Petition for Review on August 16, 2021. 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 January 29, 2019, the court granted HPE’s Motion for Summary Judgment as to all of Oracle’s claims. On February 20, 2019, the court entered judgment in favor of HPE, dismissing Oracle’s claims in their entirety. Oracle appealed the trial court’s ruling to the United States Court of Appeals for the Ninth Circuit. On August 20, 2020, the United States Court of Appeals for the Ninth Circuit issued its ruling, affirming in part and reversing in part the trial court’s decision granting summary judgment in favor of HPE. On October 6, 2020, the matter was remanded to the United States District Court for the Northern District of California. On June 4, 2021, the Court issued an order denying HPE’s motion for summary judgment and granting-in-part Oracle’s motion for partial summary judgment as to a certain of HPE’s defenses. The Court has set trial to begin on November 29, 2021. 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. 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 appealed the jury verdict of non-infringement to the United States Court of Appeals for the Federal Circuit. HPE cross-appealed the court’s decision to grant Network-1's motion for Judgment as a Matter of Law on validity. On September 24, 2020, the Federal Circuit issued its ruling, affirming-in-part and reversing-in-part the jury's verdict, and finding that an erroneous claim construction was presented to the jury that prejudiced Network-1. The matter has been remanded back to United States District Court for the Eastern District of Texas for further proceedings consistent with the Federal Circuit's ruling. On May 7, 2021, the District Court issued an order granting Network-1's motion for a new trial. The parties have agreed to the terms of a settlement that resolves the litigation with no material financial statements impact. The lawsuit was dismissed on August 13, 2021 and the matter is now closed. Q3 Networking Litigation. On September 21 and September 22, 2020, Q3 Networking LLC filed complaints against HPE, Aruba Networks, Commscope and Netgear in the United States District Court for the District of Delaware and the United States International Trade Commission (“ITC”). Both complaints allege infringement of four patents, and the ITC complaint defines the “accused products” as “routers, access points, controllers, network management servers, other networking products, and hardware and software components thereof.” The ITC action was instituted on October 23, 2020. The evidentiary hearing before the ITC has been completed and an initial determination is expected in 2021. The District of Delaware action has been stayed pending resolution of the ITC action. 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. Environmental The Company's operations and products are or may in the future become subject to various federal, state, local and foreign laws and regulations concerning environmental protection, including laws addressing the discharge of pollutants into the air and water, the management and disposal of hazardous substances and wastes, the clean-up of contaminated sites, the substances and materials used in the Company's products, the energy consumption of products, services and operations and the operational or financial responsibility for recycling, treatment and disposal of those products. This includes legislation that makes producers of electrical goods, including servers and networking equipment, financially responsible for specified collection, recycling, treatment and disposal of past and future covered products (sometimes referred to as "product take-back legislation"). The Company could incur substantial costs, its products could be restricted from entering certain jurisdictions, and it could face other sanctions, if it were to violate or become liable under environmental laws or if its products become non-compliant with environmental laws. The Company's potential exposure includes impacts on revenue, fines and civil or criminal sanctions, third-party property damage or personal injury claims and clean-up costs. The amount and timing of costs to comply with environmental laws are difficult to predict. In particular, the Company may become a party to, or otherwise involved in, proceedings brought by U.S. or state environmental agencies under the Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA"), known as "Superfund," or other federal, state or foreign laws and regulations addressing the clean-up of contaminated sites, and may become a party to, or otherwise involved in, proceedings brought by private parties for contribution towards clean-up costs. The Company is also contractually obligated to make financial contributions to address actions related to certain environmental liabilities, both ongoing and arising in the future, pursuant to its Separation and Distribution Agreement with HP Inc. |
Overview and Summary of Signi_2
Overview and Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Jul. 31, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The 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, 2021 and October 31, 2020, its results of operations for the three and nine months ended July 31, 2021 and 2020, its cash flows for the nine months ended July 31, 2021 and 2020, and its statements of stockholders' equity for the three and nine months ended July 31, 2021 and 2020. The results of operations for the three and nine months ended July 31, 2021 and the cash flows for the nine months ended July 31, 2021 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, 2020, 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. |
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 consolidates a Variable Interest Entity (“VIE”) where it has been determined that the Company is the primary beneficiary of the entity’s operation. In evaluating whether the Company is the primary beneficiary, the Company evaluates its power to direct the most significant activities of the VIE by considering the purpose and design of the entity and the risks the entity was designed to create and pass through to its variable interest holders. The Company also evaluates its economic interests in the VIE. 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 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 periods presented. |
Segment Realignment and Reclassifications | Segment Realignment and Reclassifications Effective at the beginning of the first quarter of fiscal 2021, HPE implemented certain organizational changes to align its segment financial reporting more closely with its current business structure. These organizational changes are: (i) the transfer of the lifecycle event services business, previously reported within the Advisory and Professional Services ("A & PS") reportable segment to Compute, Storage and HPC & MCS reportable segments; (ii) the transfer of certain software and related services business, previously reported within the Compute, Storage and A & PS reportable segments to the Corporate Investments and Other reportable segment, to form a new Software operating segment; and (iii) the transfer of the remaining A & PS operating segment, previously reported as a separate reportable segment, to the Corporate Investments and Other reportable segment. As a result of these changes, the Corporate Investments and Other Segment now includes the A & PS operating segment, the Communications and Media Solutions operating segment, the Software operating segment, and Hewlett Packard Enterprise Labs which is responsible for research and development. Additionally, effective at the beginning of the first quarter of fiscal 2021, the Company has excluded stock-based compensation expense from its segment earnings from operations. Segment Policy There have been no 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, 2020, except for the organizational changes and the change in allocation of stock based compensation expense described in Note 1, "Overview and Summary of Significant Accounting Policies". Hewlett Packard Enterprise does not allocate to its segments certain operating expenses, which it manages at the corporate level. These unallocated operating costs include certain corporate costs and eliminations, stock-based compensation expense, amortization of initial direct costs, amortization of intangible assets, impairment of goodwill, transformation costs, disaster charges, acquisition, disposition and other related charges. |
Significant Accounting Policies | Significant Accounting Policies Except for the change in certain accounting policies upon adoption of the accounting standards described below, there have been no significant changes to the Company's significant accounting policies described in PART II, Item 8, Note 1, "Overview and Summary of Significant Accounting Policies", of the Company's Annual Report on Form 10-K for the fiscal year ended October 31, 2020. |
Recently Adopted and Recently Enacted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In January 2021, the FASB issued guidance to clarify that all derivative instruments affected by changes to the interest rates used for discounting, margining or contract price alignment can apply certain optional expedients and exceptions mentioned in its reference rate reform guidance even though they do not reference to LIBOR or a rate being discontinued. This guidance was effective upon issuance. The Company adopted the guidance in the first quarter of fiscal 2021 and there was no impact on its Condensed Consolidated Financial Statements upon adoption. In December 2019, the FASB amended the existing accounting standards for income taxes. The amendments clarify and simplify the accounting for income taxes by eliminating certain exceptions to the general principles. The Company adopted the guidance in the first quarter of fiscal 2021 and there was no material impact on its Condensed Consolidated Financial Statements. 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 adopted the guidance in the first quarter of fiscal 2021 and there was no material impact 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 pension plans. The Company adopted the guidance in the first quarter of fiscal 2021 and there was no impact on its Condensed Consolidated Financial Statements. However, the Company expects to have additional disclosures relating to retirement and post-retirement benefit plans in its Annual Report on Form 10-K for the fiscal year ended October 31, 2021. In June 2016, the FASB amended the existing accounting standards for the measurement of credit losses with additional amendments in 2018, 2019 and 2020. These amendments primarily require the measurement and recognition of current expected credit losses for financial assets held at amortized cost. The amended accounting standard replaces the existing incurred loss impairment model with an expected loss model, which requires the use of forward-looking information to calculate credit loss estimates. It also eliminates the concept of other-than-temporary impairment and requires credit losses related to available-for-sale debt securities to be recorded through an allowance for credit losses rather than as a reduction in the amortized cost basis of the securities. These changes will result in earlier recognition of credit losses. The Company adopted the Current Expected Credit Losses standard (the “CECL standard”) as of November 1, 2020 using the modified retrospective method, with the cumulative-effect adjustment recorded to the opening balance of Accumulated deficit within stockholders’ equity in the Condensed Consolidated Balance Sheets. The cumulative effect of adopting the CECL standard resulted in an increase of $28 million to the allowance for expected credit losses within financing receivables, and a corresponding increase of $25 million, net of $3 million of deferred taxes to Accumulated deficit as of November 1, 2020. The allowance for expected credit losses related to accounts receivables is comprised of a general reserve and a specific reserve. The Company may record a specific reserve for individual accounts when the Company becomes aware of specific customer circumstances, such as in the case of a bankruptcy filing or deterioration in the customer's operating results or financial position. If there are additional changes in circumstances related to the specific customer, the Company further adjusts estimates of the recoverability of receivables. The Company maintains an allowance for credit losses for all other customers based on a variety of factors, including the use of third-party credit risk models that generate quantitative measures of default probabilities based on market factors, the financial condition of customers and the length of time receivables are past due. These qualitative factors are subjective and require a degree of management judgement. The past due or delinquency status of a receivable is based on the contractual payment terms of the receivable. The Company establishes an allowance for expected credit losses related to accounts receivable, including unbilled receivables. The allowance for expected credit losses related to financing receivables is comprised of a general reserve and a specific reserve. The Company establishes a specific reserve for financing receivables with identified exposures, such as customer defaults, bankruptcy or other events, that make it unlikely the Company will recover its investment. For individually evaluated receivables, the Company determines the expected cash flow for the receivable, which includes consideration of estimated proceeds from disposition of the collateral and calculates an estimate of the potential loss and the probability of loss. For those accounts where a loss is considered probable, the Company records a specific reserve. The Company maintains a general reserve using a credit loss model on a regional basis and bases such percentages on several factors, including consideration of historical credit losses and portfolio delinquencies, trends in the overall weighted-average risk rating of the portfolio, current economic conditions, and forward-looking information, including reasonable and supportable forecasts. The Company believes the economic forecasts employed represent reasonable and supportable forecasts, followed by a reversion to long term trends. The Company excludes accounts evaluated as part of the specific reserve from the general reserve analysis. The Company generally writes off a receivable or records a specific reserve when a receivable becomes 180 days past due, or sooner if the Company determines that the receivable is not collectible. The Company’s debt securities are generally considered available-for-sale and are reported at fair value with unrealized gains and losses, net of applicable taxes, recorded in Accumulated other comprehensive loss in the Condensed Consolidated Balance Sheets. Realized gains and losses for available-for-sale securities are calculated based on the specific identification method and included in Interest and other, net in the Condensed Consolidated Statements of Earnings. The Company monitors its investment portfolio for potential impairment on a quarterly basis. When the carrying amount of an investment in debt securities exceeds its fair value and the decline in value is determined to be due to credit-related factors, the Company recognizes the impairment by way of an allowance for credit loss in Interest and other, net in the Condensed Consolidated Statement of Earnings while the impairment that is not credit related is recorded in Accumulated other comprehensive loss in the Condensed Consolidated Balance Sheets. Recently Enacted Accounting Pronouncements In January 2020, the FASB issued guidance to clarify certain interactions between the guidance to account for equity securities, the guidance to account for investments under the equity method of accounting, and the guidance to account for derivatives and hedging. The new guidance clarifies the application of measurement alternatives and the accounting for certain forward contracts and purchased options to acquire investments. The Company is required to adopt the guidance in the first quarter of fiscal 2022, though early adoption is permitted. The Company does not expect the impact on adoption of these amendments on its Consolidated Financial Statements to be material. |
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. |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Jul. 31, 2021 | |
Segment Reporting [Abstract] | |
Segment Operating Results from Continuing Operations | Segment Operating Results Segment net revenue and operating results were as follows: Compute HPC & MCS Storage Intelligent Edge Financial Corporate Total In millions Three months ended July 31, 2021 Net revenue $ 3,033 $ 671 $ 1,154 $ 865 $ 842 $ 332 $ 6,897 Intersegment net revenue 71 70 22 2 2 — 167 Total segment net revenue $ 3,104 $ 741 $ 1,176 $ 867 $ 844 $ 332 $ 7,064 Segment earnings (loss) from operations $ 347 $ 29 $ 178 $ 137 $ 94 $ (28) $ 757 Three months ended July 31, 2020 Net revenue $ 3,265 $ 650 $ 1,109 $ 682 $ 807 $ 303 $ 6,816 Intersegment net revenue 144 17 23 2 4 — 190 Total segment net revenue $ 3,409 $ 667 $ 1,132 $ 684 $ 811 $ 303 $ 7,006 Segment earnings (loss) from operations $ 318 $ 47 $ 170 $ 71 $ 66 $ (68) $ 604 Nine months ended July 31, 2021 Net revenue $ 8,889 $ 2,081 $ 3,456 $ 2,465 $ 2,536 $ 1,003 $ 20,430 Intersegment net revenue 177 107 50 7 7 — 348 Total segment net revenue $ 9,066 $ 2,188 $ 3,506 $ 2,472 $ 2,543 $ 1,003 $ 20,778 Segment earnings (loss) from operations $ 1,024 $ 91 $ 604 $ 413 $ 269 $ (84) $ 2,317 Nine months ended July 31, 2020 Net revenue $ 8,796 $ 2,063 $ 3,406 $ 2,058 $ 2,494 $ 957 $ 19,774 Intersegment net revenue 298 50 64 11 9 1 433 Total segment net revenue $ 9,094 $ 2,113 $ 3,470 $ 2,069 $ 2,503 $ 958 $ 20,207 Segment earnings (loss) from operations $ 797 $ 156 $ 592 $ 240 $ 218 $ (172) $ 1,831 |
Reconciliation of Segment Operating Results | The reconciliation of segment operating results to Hewlett Packard Enterprise Condensed Consolidated Financial statements was as follows: Three Months Ended Nine Months Ended 2021 2020 2021 2020 In millions Net Revenue: Total segments $ 7,064 $ 7,006 $ 20,778 $ 20,207 Eliminations of intersegment net revenue (167) (190) (348) (433) Total Hewlett Packard Enterprise consolidated net revenue $ 6,897 $ 6,816 $ 20,430 $ 19,774 Earnings before taxes: Total segment earnings from operations $ 757 $ 604 $ 2,317 $ 1,831 Unallocated corporate costs and eliminations (84) (65) (186) (165) Stock-based compensation expense (86) (55) (294) (215) Amortization of initial direct costs (2) (3) (6) (9) Amortization of intangible assets (82) (95) (276) (299) Transformation costs (213) (357) (733) (646) Disaster charges (5) (2) (6) (24) Acquisition, disposition and other related charges (3) (15) (34) (82) Impairment of goodwill — — — (865) Interest and other, net (50) (71) (105) (158) Tax indemnification and related adjustments 76 (30) 60 (86) Non-service net periodic benefit credit 19 28 53 101 Earnings from equity interests 79 27 109 50 Total Hewlett Packard Enterprise consolidated earnings (loss) before taxes $ 406 $ (34) $ 899 $ (567) |
Schedule of Reconciliation of Assets from Segments to Consolidated | Total assets by segment and the reconciliation of segment assets to Hewlett Packard Enterprise consolidated total assets were as follows: As of July 31, 2021 October 31, 2020 In millions Compute $ 16,339 $ 14,962 HPC & MCS 6,502 6,245 Storage 6,674 6,438 Intelligent Edge 4,473 4,352 Financial Services 14,651 14,765 Corporate Investments and Other 1,244 1,124 Corporate and unallocated assets 6,554 6,129 Total Hewlett Packard Enterprise consolidated total assets $ 56,437 $ 54,015 |
Net Revenue by Geographic Areas | The Company’s net revenue by geographic region was as follows: Three Months Ended July 31, Nine Months Ended July 31, 2021 2020 2021 2020 In millions Americas: United States $ 2,237 $ 2,362 $ 6,433 $ 6,586 Americas excluding U.S. 461 395 1,357 1,273 Total Americas $ 2,698 $ 2,757 $ 7,790 $ 7,859 Europe, Middle East and Africa 2,510 2,448 7,684 7,206 Asia Pacific and Japan 1,689 1,611 4,956 4,709 Total Hewlett Packard Enterprise consolidated net revenue $ 6,897 $ 6,816 $ 20,430 $ 19,774 |
Transformation Programs (Tables
Transformation Programs (Tables) | 9 Months Ended |
Jul. 31, 2021 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Related Costs | During the three and nine months ended July 31, 2021, the Company incurred $147 million and $552 million, respectively, of charges related to the cost optimization and prioritization plan of which $146 million and $549 million were recorded within Transformation costs, and $1 million and $3 million, respectively, was recorded within Non-service net periodic benefit credit in the Condensed Consolidated Statements of Earnings. During the three and nine months ended July 31, 2020, the Company incurred $238 million of charges related to the cost optimization and prioritization plan which was recorded within Transformation costs in the Condensed Consolidated Statements of Earnings, the components of which were as follows: Three months ended July 31, Nine months ended July 31, 2021 2020 2021 2020 In millions Program management $ 17 $ 14 $ 72 $ 14 IT Costs 6 4 9 4 Restructuring charges 124 220 471 220 Total $ 147 $ 238 $ 552 $ 238 Three months ended July 31, Nine months ended July 31, 2021 2020 2021 2020 In millions Program management $ 5 $ 10 $ 10 $ 28 IT costs 54 25 126 71 Restructuring charges 2 84 21 332 Gain on real estate sales — (7) (3) (44) Impairment on real estate assets — — 4 — Other 6 7 26 21 Total $ 67 $ 119 $ 184 $ 408 |
Schedule of Restructuring Reserve by Cost | Restructuring activities related to the Company's employees and infrastructure under the cost optimization and prioritization plan and HPE Next Plan, were presented in the table below: Cost Optimization and Prioritization Plan HPE Next Plan Employee Infrastructure Employee Infrastructure In millions Liability as of October 31, 2020 $ 210 $ 68 $ 144 $ 52 Charges 199 272 — 21 Cash payments (214) (86) (94) (29) Non-cash items 1 (68) 3 (4) Liability as of July 31, 2021 $ 196 $ 186 $ 53 $ 40 Total costs incurred to date, as of July 31, 2021 $ 429 $ 371 $ 1,261 $ 246 Total expected costs to be incurred as of July 31, 2021 $ 700 $ 610 $ 1,261 $ 248 |
Retirement Benefit Plans (Table
Retirement Benefit Plans (Tables) | 9 Months Ended |
Jul. 31, 2021 | |
Retirement Benefits [Abstract] | |
Summary of Net Benefit Cost | The Company's net pension benefit (credit) cost for defined benefit plans recognized in the Condensed Consolidated Statements of Earnings was as follows: Three months ended July 31, Nine months ended July 31, 2021 2020 2021 2020 In millions Service cost $ 24 $ 23 $ 73 $ 69 Interest cost (1) 30 35 89 106 Expected return on plan assets (1) (121) (133) (360) (402) Amortization and deferrals (1) : Actuarial loss 74 65 223 194 Prior service benefit (3) (3) (10) (10) Net periodic benefit (credit) cost 4 (13) 15 (43) Settlement loss (1) — 7 1 8 Special termination benefits (1) 1 — 3 1 Total net benefit (credit) cost $ 5 $ (6) $ 19 $ (34) (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, 2021 | |
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, 2021 October 31, 2020 In millions Deferred tax assets $ 2,025 $ 1,778 Deferred tax liabilities (384) (290) Deferred tax assets net of deferred tax liabilities $ 1,641 $ 1,488 |
Balance Sheet Details (Tables)
Balance Sheet Details (Tables) | 9 Months Ended |
Jul. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Cash and Cash Equivalents | Cash, cash equivalents and restricted cash As of July 31, 2021 October 31, 2020 In millions Cash and cash equivalents $ 5,293 $ 4,233 Restricted cash (1) 359 388 Total $ 5,652 $ 4,621 (1) Restricted cash is included within Other current assets in the accompanying Condensed Consolidated Balance Sheets and is primarily related to cash received under the Company's collateral securities agreements for its derivative instruments and cash restricted under the fixed-term securitization program for the issuance of asset-backed debt securities. |
Schedule of Inventory | Inventory As of July 31, 2021 October 31, 2020 In millions Finished goods $ 1,373 $ 1,197 Purchased parts and fabricated assemblies 2,569 1,477 Total $ 3,942 $ 2,674 |
Schedule of Property, Plant and Equipment | Property, Plant and Equipment As of July 31, 2021 October 31, 2020 In millions Land $ 75 $ 89 Buildings and leasehold improvements 1,697 1,886 Machinery and equipment, including equipment held for lease 9,855 9,624 11,627 11,599 Accumulated depreciation (6,117) (5,974) Total $ 5,510 $ 5,625 |
Changes in Aggregate Product Warranty Liabilities | The Company's aggregate product warranty liability as of July 31, 2021, and changes were as follows: Nine Months Ended In millions Balance at beginning of period $ 385 Charges 159 Adjustments related to pre-existing warranties (27) Settlements made (180) Balance at end of period $ 337 |
Summary of Accounts Receivable, Net | A summary of accounts receivable, net, including unbilled receivables was as follows: As of July 31, 2021 October 31, 2020 In millions Accounts receivable, net Accounts receivable $ 3,125 $ 3,227 Unbilled receivables 214 205 Allowances (42) (46) Total $ 3,297 $ 3,386 |
Schedule of Trade Receivables Sold and Cash Received | The allowances for credit losses related to accounts receivable and changes therein were as follows: As of July 31, 2021 October 31, 2020 In millions Balance at beginning of the period $ 46 $ 31 Provision for credit losses 8 29 Write off's, net of recoveries (12) (14) Balance at end of the period $ 42 $ 46 |
Accounting for Leases as a Le_2
Accounting for Leases as a Lessor (Tables) | 9 Months Ended |
Jul. 31, 2021 | |
Leases [Abstract] | |
Components of Financing Receivables | The components of financing receivables were as follows: As of July 31, 2021 October 31, 2020 In millions Minimum lease payments receivable $ 9,346 $ 9,448 Unguaranteed residual value 386 364 Unearned income (725) (754) Financing receivables, gross 9,007 9,058 Allowance for credit losses (234) (154) Financing receivables, net 8,773 8,904 Less: current portion (3,814) (3,794) Amounts due after one year, net $ 4,959 $ 5,110 |
Sales-type and Direct Financing Leases, Lease Receivable, Maturity | As of July 31, 2021 and October 31, 2020, scheduled maturities of the Company's minimum lease payments receivable were as follows: As of July 31, 2021 October 31, 2020 Fiscal year In millions Remainder of fiscal 2021 $ 1,496 $ 4,182 2022 3,389 2,662 2023 2,306 1,572 2024 1,326 720 2025 609 252 Thereafter 220 60 Total undiscounted cash flows $ 9,346 $ 9,448 Present value of lease payments (recognized as finance receivables) $ 8,621 $ 8,694 Unearned income $ 725 $ 754 |
Credit Risk Profile of Gross Financing Receivables | The credit risk profile of financing receivables, based on internal risk ratings as of July 31, 2021, presented on amortized cost basis by year of origination was as follows: As of July 31, 2021 Risk Rating Low Moderate High Fiscal Year In millions 2021 $ 1,341 $ 1,156 $ 40 2020 1,607 1,203 94 2019 965 880 95 2018 469 491 88 2017 and prior 198 271 109 Total $ 4,580 $ 4,001 $ 426 The credit risk profile of gross financing receivables, based on internal risk ratings as of October 31, 2020, was as follows: As of October 31, 2020 In millions Risk Rating: Low $ 4,590 Moderate 4,091 High 377 Total $ 9,058 |
Allowance for Doubtful Accounts for Financing Receivables | The allowance for credit losses for financing receivables as of July 31, 2021 and October 31, 2020 and the respective changes during the nine and twelve months then ended were as follows: As of July 31, 2021 October 31, 2020 In millions Balance at beginning of period $ 154 $ 131 Adjustment for adoption of the new credit loss standard 28 — Provision for credit losses 59 43 Adjustment to the existing allowance 19 — Write-offs (26) (20) Balance at end of period $ 234 $ 154 |
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, 2021 October 31, 2020 In millions Billed: (1) Current 1-30 days $ 347 $ 340 Past due 31-60 days 38 43 Past due 61-90 days 17 22 Past due > 90 days 121 140 Unbilled sales-type and direct-financing lease receivables 8,484 8,513 Total gross financing receivables $ 9,007 $ 9,058 Gross financing receivables on non-accrual status (2) $ 285 $ 364 Gross financing receivables 90 days past due and still accruing interest (2) $ 92 $ 74 (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, 2021 October 31, 2020 In millions Equipment leased to customers $ 7,166 $ 7,184 Accumulated depreciation (3,223) (3,157) Total $ 3,943 $ 4,027 |
Lessor Operating Lease Payments Maturity | Minimum future rentals on non-cancelable operating leases related to leased equipment were as follows: As of July 31, 2021 Fiscal year In millions Remainder of fiscal 2021 $ 510 2022 1,524 2023 873 2024 300 2025 44 Thereafter 11 Total $ 3,262 |
Lessor Lease Activity | The following table presents amounts included in the Condensed Consolidated Statement of Earnings related to lessor activity: Three Months Ended July 31, Nine Months Ended July 31, 2021 2020 2021 2020 In millions Sales-type leases and direct financing leases: Interest income $ 125 $ 115 $ 371 $ 343 Lease income - operating leases 598 588 1,797 1,821 Total lease income $ 723 $ 703 $ 2,168 $ 2,164 |
Schedule of Variable Interest Entities | The assets in the table below include those that can be used to settle the obligations of the VIE. Additionally, general creditors do not have recourse to the assets of the VIE. As of July 31, 2021 October 31, 2020 Assets held by VIE In millions Other current assets $ 179 $ 120 Financing receivables Short-term $ 805 $ 531 Long-term $ 882 $ 584 Property, plant and equipment $ 1,010 $ 665 Liabilities held by VIE Notes payable and short-term borrowings, net of unamortized debt issuance costs $ 1,389 $ 886 Long-term debt, net of unamortized debt issuance costs $ 1,198 $ 834 |
Goodwill (Tables)
Goodwill (Tables) | 9 Months Ended |
Jul. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Allocation and Changes in the Carrying Amount of Goodwill | The following table represents the carrying value of goodwill, by reportable segment as of October 31, 2020 and July 31, 2021: Compute HPC & MCS Storage Intelligent Edge Financial Services Corporate Investments and Other Total In millions Balance at October 31, 2020 (1) (2) $ 7,532 $ 3,616 $ 3,946 $ 2,566 $ 144 213 $ 18,017 Goodwill from current period acquisitions — 86 — — — — 86 Goodwill adjustments — — — (11) — — (11) Balance at July 31, 2021 (2) $ 7,532 $ 3,702 $ 3,946 $ 2,555 $ 144 $ 213 $ 18,092 (1) As a result of the organizational realignments which were effective as of November 1, 2020, (described in Note 1, "Overview and Summary of Significant Accounting Policies"), $213 million of goodwill was reallocated from Storage segment to Corporate Investments and Other segment as of the beginning of the period using a relative fair value approach. (2) Goodwill is net of accumulated impairment losses of $953 million. Of this amount, $865 million related to the HPC & MCS reporting unit was recorded during the second quarter of 2020 and $88 million related to the CMS reporting unit within Corporate Investments and Other was recorded during the fourth quarter of fiscal 2018. There is no goodwill remaining in the CMS reporting unit. |
Fair Value (Tables)
Fair Value (Tables) | 9 Months Ended |
Jul. 31, 2021 | |
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, 2021 As of October 31, 2020 Fair Value Fair Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Remaining Inputs (Level 2) Significant Other Unobservable Remaining Inputs (Level 3) Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Remaining Inputs (Level 2) Significant Other Unobservable Remaining Inputs (Level 3) Total In millions Assets Cash Equivalents and Investments: Time deposits $ — $ 1,398 $ — $ 1,398 $ — $ 939 $ — $ 939 Money market funds 2,003 — — 2,003 1,167 — — 1,167 Equity securities 2 — 92 94 — — — — Foreign bonds 1 125 — 126 — 125 — 125 Other debt securities — — 43 43 — — 21 21 Derivative Instruments: Interest rate contracts — 153 — 153 — 220 — 220 Foreign exchange contracts — 211 — 211 — 290 — 290 Other derivatives — 1 — 1 — — — — Total assets $ 2,006 $ 1,888 $ 135 $ 4,029 $ 1,167 $ 1,574 $ 21 $ 2,762 Liabilities Derivative Instruments: Interest rate contracts $ — $ — $ — $ — $ — $ 2 $ — $ 2 Foreign exchange contracts — 190 — 190 — 189 — 189 Other derivatives — — — — — 3 — 3 Total liabilities $ — $ 190 $ — $ 190 $ — $ 194 $ — $ 194 |
Financial Instruments (Tables)
Financial Instruments (Tables) | 9 Months Ended |
Jul. 31, 2021 | |
Investments, All Other Investments [Abstract] | |
Cash Equivalents and Available-for-Sale Investments | Cash equivalents and available-for-sale debt investments were as follows: As of July 31, 2021 As of October 31, 2020 Cost Gross Unrealized Gain Fair Cost Gross Unrealized Gain Fair In millions Cash Equivalents: Time deposits $ 1,398 $ — $ 1,398 $ 939 $ — $ 939 Money market funds 2,003 — 2,003 1,167 — 1,167 Total cash equivalents 3,401 — 3,401 2,106 — 2,106 Available-for-Sale Debt Investments: Foreign bonds 110 16 126 108 17 125 Other debt securities 42 1 43 20 1 21 Total available-for-sale debt investments 152 17 169 128 18 146 Total cash equivalents and available-for-sale debt investments $ 3,553 $ 17 $ 3,570 $ 2,234 $ 18 $ 2,252 |
Contractual Maturities of Investments in Available-for-Sale Debt Securities | Contractual maturities of available-for-sale debt investments were as follows: July 31, 2021 Amortized Cost Fair Value In millions Due in one to five years $ 25 $ 25 Due in more than five years 127 144 $ 152 $ 169 |
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, 2021 As of October 31, 2020 Fair Value Fair Value Outstanding Other Long-Term Other Long-Term Outstanding Other Long-Term Other Long-Term In millions Derivatives designated as hedging instruments Fair value hedges: Interest rate contracts $ 3,850 $ — $ 153 $ — $ — $ 3,850 $ — $ 220 $ — $ — Cash flow hedges: Foreign currency contracts 7,872 89 46 65 62 7,652 75 85 95 38 Interest rate contracts — — — — — 500 — — 2 — Net investment hedges: Foreign currency contracts 1,821 25 24 18 20 1,804 34 44 11 9 Total derivatives designated as hedging instruments 13,543 114 223 83 82 13,806 109 349 108 47 Derivatives not designated as hedging instruments Foreign currency contracts 5,923 20 7 23 2 6,157 43 9 35 1 Other derivatives 113 1 — — — 105 — — 3 — Total derivatives not designated as hedging instruments 6,036 21 7 23 2 6,262 43 9 38 1 Total derivatives $ 19,579 $ 135 $ 230 $ 106 $ 84 $ 20,068 $ 152 $ 358 $ 146 $ 48 |
Offsetting Assets | The 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, 2021 In the Condensed Consolidated Balance Sheets (i) (ii) (iii) = (i)–(ii) (iv) (v) (vi) = (iii)–(iv)–(v) Gross Amounts Not Offset Gross Gross Net Amount Derivatives Financial Net Amount In millions Derivative assets $ 365 $ — $ 365 $ 154 $ 203 (1) $ 8 Derivative liabilities $ 190 $ — $ 190 $ 154 $ 30 (2) $ 6 As of October 31, 2020 In the Condensed Consolidated Balance Sheets (i) (ii) (iii) = (i)–(ii) (iv) (v) (vi) = (iii)–(iv)–(v) Gross Amounts Not Offset Gross Gross Net Amount Derivatives Financial Net Amount In millions Derivative assets $ 510 $ — $ 510 $ 137 $ 321 (1) $ 52 Derivative liabilities $ 194 $ — $ 194 $ 137 $ 55 (2) $ 2 (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. |
Offsetting Liabilities | The 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, 2021 In the Condensed Consolidated Balance Sheets (i) (ii) (iii) = (i)–(ii) (iv) (v) (vi) = (iii)–(iv)–(v) Gross Amounts Not Offset Gross Gross Net Amount Derivatives Financial Net Amount In millions Derivative assets $ 365 $ — $ 365 $ 154 $ 203 (1) $ 8 Derivative liabilities $ 190 $ — $ 190 $ 154 $ 30 (2) $ 6 As of October 31, 2020 In the Condensed Consolidated Balance Sheets (i) (ii) (iii) = (i)–(ii) (iv) (v) (vi) = (iii)–(iv)–(v) Gross Amounts Not Offset Gross Gross Net Amount Derivatives Financial Net Amount In millions Derivative assets $ 510 $ — $ 510 $ 137 $ 321 (1) $ 52 Derivative liabilities $ 194 $ — $ 194 $ 137 $ 55 (2) $ 2 (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. |
Pre-tax Effect of Derivative Instruments and Related Hedged Items in a Fair Value Hedging Relationship | The amounts recorded on the Condensed Consolidated Balance Sheets related to cumulative basis adjustments for fair value hedges were as follows: Carrying amount of the hedged assets/ (liabilities) Cumulative amount of fair value hedging adjustment included in the carrying amount of the hedged assets/ (liabilities) As of As of July 31, 2021 October 31, 2020 July 31, 2021 October 31, 2020 In millions In millions Long-term debt $ (3,994) $ (4,059) $ (153) $ (220) |
Pre-tax Effect of Derivative Instruments in Net Investment Hedging Relationships | The pre-tax effect of derivative instruments in cash flow and net investment hedging relationships recognized in Other Comprehensive Income ("OCI") were as follows: Gains (Losses) Recognized in OCI on Derivatives Three months ended July 31, 2021 Three months ended July 31, 2020 Nine months ended July 31, 2021 Nine months ended July 31, 2020 In millions Derivatives in Cash Flow Hedging relationship Foreign exchange contracts $ 101 $ (456) $ (183) $ (79) Interest rate contracts — — (6) Derivatives in Net Investment Hedging relationship Foreign exchange contracts 16 (83) (61) 50 Total $ 117 $ (539) $ (244) $ (35) |
Pre-tax Effect of Derivative Instruments in Cash Flow Hedging Relationships | The pre-tax effect of derivative instruments in cash flow and net investment hedging relationships recognized in Other Comprehensive Income ("OCI") were as follows: Gains (Losses) Recognized in OCI on Derivatives Three months ended July 31, 2021 Three months ended July 31, 2020 Nine months ended July 31, 2021 Nine months ended July 31, 2020 In millions Derivatives in Cash Flow Hedging relationship Foreign exchange contracts $ 101 $ (456) $ (183) $ (79) Interest rate contracts — — (6) Derivatives in Net Investment Hedging relationship Foreign exchange contracts 16 (83) (61) 50 Total $ 117 $ (539) $ (244) $ (35) |
Effect of Derivative Instruments on the Statement of Earnings | The pre-tax effect of derivative instruments on the Condensed Consolidated Statements of Earnings were as follows: Gains (Losses) Recognized in Income Three months ended July 31, 2021 Three months ended July 31, 2020 Nine months ended July 31, 2021 Nine months ended July 31, 2020 Net revenue Interest and other, net Net revenue Interest and other, net Net revenue Interest and other, net Net revenue Interest and other, net In millions Total amounts of income and expense line items presented in the Condensed Consolidated Statements of Earnings in which the effects of fair value hedges, cash flow hedges and derivatives not designated as hedging instruments are recorded $ 6,897 $ (50) $ 6,816 $ (71) $ 20,430 $ (105) $ 19,774 $ (158) Gains (losses) on derivatives in fair value hedging relationships Interest rate contracts Hedged items $ — $ (3) $ — $ (13) $ — $ 67 $ — $ (198) Derivatives designated as hedging instruments — 3 — 13 — (67) — 198 Gains (losses) on derivatives in cash flow hedging relationships Foreign exchange contracts Amount of gains (losses) reclassified from accumulated other comprehensive income into income (14) 50 23 (264) (113) (147) 97 (55) Interest rate contracts Amount of gains (losses) reclassified from accumulated other comprehensive income into income — — — (1) — (2) — (1) Gains (losses) on derivatives not designated as hedging instruments Foreign exchange contracts — (33) — 8 — (61) — 53 Other derivatives — (1) — (6) — 3 — (1) Total gains (losses) $ (14) $ 16 $ 23 $ (263) $ (113) $ (207) $ 97 $ (4) |
Borrowings (Tables)
Borrowings (Tables) | 9 Months Ended |
Jul. 31, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Notes Payable and Short-term Borrowings, Including the Current Portion of Long-term Debt | Notes payable, short-term borrowings, including the current portion of long-term debt, and long-terms debt were as follows: As of July 31, 2021 October 31, 2020 In millions Current portion of long-term debt $ 2,741 $ 2,768 FS commercial paper 694 677 Notes payable to banks, lines of credit and other 301 310 Total notes payable and short-term borrowings $ 3,736 $ 3,755 Long-term debt 12,489 12,186 Total Debt $ 16,225 $ 15,941 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 9 Months Ended |
Jul. 31, 2021 | |
Equity [Abstract] | |
Components of Accumulated Other Comprehensive Loss, Net of Taxes | The components of Accumulated other comprehensive loss, net of taxes as of July 31, 2021, and changes during the nine months ended July 31, 2021 were as follows: Net unrealized Net unrealized Unrealized Cumulative Accumulated In millions Balance at beginning of period $ 18 $ (7) $ (3,473) $ (477) $ (3,939) Other comprehensive income (loss) before reclassifications (1) (183) 29 20 (135) Reclassifications of (gains) losses into earnings — 262 214 — 476 Tax (provision) benefit — (14) (15) (4) (33) Balance at end of period $ 17 $ 58 $ (3,245) $ (461) $ (3,631) The components of Accumulated other comprehensive loss, net of taxes as of July 31, 2020, and changes during the nine months ended July 31, 2020 were as follows: Net unrealized Net unrealized Unrealized Cumulative Accumulated In millions Balance at beginning of period $ 23 $ 53 $ (3,366) $ (437) $ (3,727) Effect of change in accounting principle (1) — (10) — (33) (43) Other comprehensive income (loss) before reclassifications — (85) (10) (46) (141) Reclassifications of (gains) losses into earnings (8) (41) 191 — 142 Tax (provision) benefit — 20 (11) 4 13 Balance at end of period $ 15 $ (63) $ (3,196) $ (512) $ (3,756) (1) Reflects the impact of the adoption of an accounting standard update that allows for the reclassification of stranded tax effects from accumulated other comprehensive loss to accumulated deficit. |
Net Earnings (Loss) Per Share (
Net Earnings (Loss) Per Share (Tables) | 9 Months Ended |
Jul. 31, 2021 | |
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, 2021 2020 2021 2020 In millions, except per share amounts Numerator: Net earnings (loss) $ 392 $ 9 $ 874 $ (479) Denominator: Weighted-average shares used to compute basic net EPS 1,314 1,292 1,308 1,294 Dilutive effect of employee stock plans 24 8 20 — Weighted-average shares used to compute diluted net EPS 1,338 1,300 1,328 1294 Net earnings (loss) per share: Basic $ 0.30 $ 0.01 $ 0.67 $ (0.37) Diluted $ 0.29 $ 0.01 $ 0.66 $ (0.37) Anti-dilutive weighted-average stock awards (1) 1 21 7 48 (1) The Company excludes shares potentially issuable under employee stock plans that could dilute basic net EPS in the future from the calculation of diluted net earnings per share, as their effect, if included, would have been anti-dilutive for the periods presented. |
Overview and Summary of Signi_3
Overview and Summary of Significant Accounting Policies - Narrative (Details) - USD ($) $ in Millions | Sep. 07, 2021 | Aug. 31, 2021 | Jul. 31, 2021 | Apr. 30, 2021 | Oct. 31, 2020 | Jul. 31, 2020 | Apr. 30, 2020 | Oct. 31, 2019 | ||
Segment Reporting Information [Line Items] | ||||||||||
Goodwill | $ 18,092 | $ 18,017 | ||||||||
Allowance for credit loss | 234 | 154 | $ 131 | |||||||
Stockholders' equity | 17,073 | 16,096 | ||||||||
Deferred tax assets | 2,025 | 1,778 | ||||||||
Subsequent Event | Notes Payable to Banks | Notes Due October 2021 | Forecast | ||||||||||
Segment Reporting Information [Line Items] | ||||||||||
Stated interest rate | 3.50% | |||||||||
Extinguishment of Debt, Amount | $ 500 | |||||||||
Subsequent Event | Notes Payable to Banks | Floating Rate Notes Due October 2021 | Forecast | ||||||||||
Segment Reporting Information [Line Items] | ||||||||||
Extinguishment of Debt, Amount | $ 800 | |||||||||
Zerto Ltd. | Subsequent Event | ||||||||||
Segment Reporting Information [Line Items] | ||||||||||
Purchase price consideration | $ 374 | |||||||||
Determined AI Inc. and Ampool Inc. | ||||||||||
Segment Reporting Information [Line Items] | ||||||||||
Purchase price consideration | 117 | |||||||||
Goodwill | 86 | |||||||||
Amortizable intangible assets | 24 | |||||||||
Cumulative Effect, Period of Adoption, Adjustment | ||||||||||
Segment Reporting Information [Line Items] | ||||||||||
Allowance for credit loss | 28 | 0 | ||||||||
Accounting Standards Update 2016-13 | Cumulative Effect, Period of Adoption, Adjustment | ||||||||||
Segment Reporting Information [Line Items] | ||||||||||
Allowance for credit loss | 28 | |||||||||
Deferred tax assets | 3 | |||||||||
Accumulated Deficit | ||||||||||
Segment Reporting Information [Line Items] | ||||||||||
Stockholders' equity | $ (7,994) | $ (8,229) | (8,375) | $ (8,377) | $ (8,385) | (7,632) | ||||
Accumulated Deficit | Cumulative Effect, Period of Adoption, Adjustment | ||||||||||
Segment Reporting Information [Line Items] | ||||||||||
Stockholders' equity | (25) | [1] | $ 43 | [2] | ||||||
Accumulated Deficit | Accounting Standards Update 2016-13 | Cumulative Effect, Period of Adoption, Adjustment | ||||||||||
Segment Reporting Information [Line Items] | ||||||||||
Stockholders' equity | $ 25 | |||||||||
[1] | Represents the impact of the adoption of the accounting standard on the measurement of credit losses on financial assets. | |||||||||
[2] | Represents the impact of the adoption of an accounting standard update that allows for the reclassification of stranded tax effects from accumulated other comprehensive loss toaccumulated deficit. |
Segment Information - Narrative
Segment Information - Narrative (Details) | 3 Months Ended |
Jul. 31, 2021segment | |
Segment Reporting [Abstract] | |
Number of segments | 6 |
Segment Information - Segment O
Segment Information - Segment Operating Results from Continuing Operations (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2021 | Jul. 31, 2020 | Jul. 31, 2021 | Jul. 31, 2020 | |
Segment Reporting Information [Line Items] | ||||
Net revenue | $ 6,897 | $ 6,816 | $ 20,430 | $ 19,774 |
Segment earnings (loss) from operations | 282 | 12 | 782 | (474) |
Intersegment net revenue and other | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | (167) | (190) | (348) | (433) |
Operating Segment | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | 7,064 | 7,006 | 20,778 | 20,207 |
Segment earnings (loss) from operations | 757 | 604 | 2,317 | 1,831 |
Compute | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | 3,033 | 3,265 | 8,889 | 8,796 |
Compute | Intersegment net revenue and other | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | (71) | (144) | (177) | (298) |
Compute | Operating Segment | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | 3,104 | 3,409 | 9,066 | 9,094 |
Segment earnings (loss) from operations | 347 | 318 | 1,024 | 797 |
HPC & MCS | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | 671 | 650 | 2,081 | 2,063 |
HPC & MCS | Intersegment net revenue and other | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | (70) | (17) | (107) | (50) |
HPC & MCS | Operating Segment | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | 741 | 667 | 2,188 | 2,113 |
Segment earnings (loss) from operations | 29 | 47 | 91 | 156 |
Storage | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | 1,154 | 1,109 | 3,456 | 3,406 |
Storage | Intersegment net revenue and other | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | (22) | (23) | (50) | (64) |
Storage | Operating Segment | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | 1,176 | 1,132 | 3,506 | 3,470 |
Segment earnings (loss) from operations | 178 | 170 | 604 | 592 |
Intelligent Edge | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | 865 | 682 | 2,465 | 2,058 |
Intelligent Edge | Intersegment net revenue and other | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | (2) | (2) | (7) | (11) |
Intelligent Edge | Operating Segment | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | 867 | 684 | 2,472 | 2,069 |
Segment earnings (loss) from operations | 137 | 71 | 413 | 240 |
Financial Services | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | 842 | 807 | 2,536 | 2,494 |
Financial Services | Intersegment net revenue and other | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | (2) | (4) | (7) | (9) |
Financial Services | Operating Segment | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | 844 | 811 | 2,543 | 2,503 |
Segment earnings (loss) from operations | 94 | 66 | 269 | 218 |
Corporate Investments and Other | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | 332 | 303 | 1,003 | 957 |
Corporate Investments and Other | Intersegment net revenue and other | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | 0 | 0 | 0 | (1) |
Corporate Investments and Other | Operating Segment | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | 332 | 303 | 1,003 | 958 |
Segment earnings (loss) from operations | $ (28) | $ (68) | $ (84) | $ (172) |
Segment Information - Reconcili
Segment Information - Reconciliation of Segment Operating Results (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2021 | Jul. 31, 2020 | Jul. 31, 2021 | Jul. 31, 2020 | |
Net revenue: | ||||
Net revenue | $ 6,897 | $ 6,816 | $ 20,430 | $ 19,774 |
(Loss) earnings before taxes: | ||||
Total segment earnings from operations | 282 | 12 | 782 | (474) |
Amortization of intangible assets | (82) | (95) | (276) | (299) |
Transformation costs | (213) | (357) | (733) | (646) |
Acquisition, disposition and other related charges | (3) | (15) | (34) | (55) |
Interest and other, net | (50) | (71) | (105) | (158) |
Tax indemnification and related adjustments | 76 | (30) | 60 | (86) |
Non-service net periodic benefit credit | 19 | 28 | 53 | 101 |
Earnings from equity interests | 79 | 27 | 109 | 50 |
Earnings (loss) before taxes | 406 | (34) | 899 | (567) |
Operating Segment | ||||
Net revenue: | ||||
Net revenue | 7,064 | 7,006 | 20,778 | 20,207 |
(Loss) earnings before taxes: | ||||
Total segment earnings from operations | 757 | 604 | 2,317 | 1,831 |
Elimination of intersegment net revenue and other | ||||
Net revenue: | ||||
Net revenue | (167) | (190) | (348) | (433) |
Segment Reconciling Items | ||||
(Loss) earnings before taxes: | ||||
Unallocated corporate costs and eliminations | (84) | (65) | (186) | (165) |
Stock-based compensation expense | (86) | (55) | (294) | (215) |
Amortization of initial direct costs | (2) | (3) | (6) | (9) |
Amortization of intangible assets | (82) | (95) | (276) | (299) |
Transformation costs | (213) | (357) | (733) | (646) |
Disaster charges | (5) | (2) | (6) | (24) |
Acquisition, disposition and other related charges | (3) | (15) | (34) | (82) |
Impairment of goodwill | 0 | 0 | 0 | (865) |
Interest and other, net | (50) | (71) | (105) | (158) |
Tax indemnification and related adjustments | 76 | (30) | 60 | (86) |
Non-service net periodic benefit credit | 19 | 28 | 53 | 101 |
Earnings from equity interests | $ 79 | $ 27 | $ 109 | $ 50 |
Segment Information - Reconci_2
Segment Information - Reconciliation of Segment Assets (Details) - USD ($) $ in Millions | Jul. 31, 2021 | Oct. 31, 2020 |
Segment Reporting Information [Line Items] | ||
Assets | $ 56,437 | $ 54,015 |
Operating Segment | Compute | ||
Segment Reporting Information [Line Items] | ||
Assets | 16,339 | 14,962 |
Operating Segment | HPC & MCS | ||
Segment Reporting Information [Line Items] | ||
Assets | 6,502 | 6,245 |
Operating Segment | Storage | ||
Segment Reporting Information [Line Items] | ||
Assets | 6,674 | 6,438 |
Operating Segment | Intelligent Edge | ||
Segment Reporting Information [Line Items] | ||
Assets | 4,473 | 4,352 |
Operating Segment | Financial Services | ||
Segment Reporting Information [Line Items] | ||
Assets | 14,651 | 14,765 |
Operating Segment | Corporate Investments and Other | ||
Segment Reporting Information [Line Items] | ||
Assets | 1,244 | 1,124 |
Corporate and unallocated assets | ||
Segment Reporting Information [Line Items] | ||
Assets | $ 6,554 | $ 6,129 |
Segment Information - Revenue b
Segment Information - Revenue by Geographic Region (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2021 | Jul. 31, 2020 | Jul. 31, 2021 | Jul. 31, 2020 | |
Segment Reporting Information [Line Items] | ||||
Total net revenue | $ 6,897 | $ 6,816 | $ 20,430 | $ 19,774 |
Total Americas | ||||
Segment Reporting Information [Line Items] | ||||
Total net revenue | 2,698 | 2,757 | 7,790 | 7,859 |
United States | ||||
Segment Reporting Information [Line Items] | ||||
Total net revenue | 2,237 | 2,362 | 6,433 | 6,586 |
Americas excluding U.S. | ||||
Segment Reporting Information [Line Items] | ||||
Total net revenue | 461 | 395 | 1,357 | 1,273 |
Europe, Middle East and Africa | ||||
Segment Reporting Information [Line Items] | ||||
Total net revenue | 2,510 | 2,448 | 7,684 | 7,206 |
Asia Pacific and Japan | ||||
Segment Reporting Information [Line Items] | ||||
Total net revenue | $ 1,689 | $ 1,611 | $ 4,956 | $ 4,709 |
Transformation Programs - Narra
Transformation Programs - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Jul. 31, 2021 | Jul. 31, 2020 | Jul. 31, 2021 | Jul. 31, 2020 | Oct. 31, 2020 | |
Restructuring Cost and Reserve [Line Items] | |||||
Transformation costs | $ 213 | $ 357 | $ 733 | $ 646 | |
Current restructuring liability reported in Accrued restructuring | 267 | 267 | $ 366 | ||
Transformation Program | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Current restructuring liability reported in Accrued restructuring | 263 | 263 | 359 | ||
Transformation Program | Other Accrued Liabilities | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Current restructuring liability reported in Accrued restructuring | 29 | 29 | 24 | ||
Transformation Program | Long-Term Other Liabilities | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Long-term portion of restructuring reserve, recorded in Other liabilities | 183 | 183 | $ 91 | ||
HPE Next | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Transformation costs | 67 | 119 | 184 | 408 | |
Cost optimization and prioritization plan | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Transformation costs | 147 | $ 238 | 552 | $ 238 | |
Cost optimization and prioritization plan | Transformation Costs | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Transformation costs | 146 | 549 | |||
Cost optimization and prioritization plan | Non-Service Net Periodic Benefit Credit | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Transformation costs | $ 1 | $ 3 |
Transformation Programs - Trans
Transformation Programs - Transformation Costs (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2021 | Jul. 31, 2020 | Jul. 31, 2021 | Jul. 31, 2020 | |
Restructuring Cost and Reserve [Line Items] | ||||
Total | $ 213 | $ 357 | $ 733 | $ 646 |
HPE Next | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Program management | 5 | 10 | 10 | 28 |
IT costs | 54 | 25 | 126 | 71 |
Restructuring charges | 2 | 84 | 21 | 332 |
Gain on real estate sales | 0 | (7) | (3) | (44) |
Impairment on real estate assets | 0 | 0 | 4 | 0 |
Other | 6 | 7 | 26 | 21 |
Total | 67 | 119 | 184 | 408 |
Cost optimization and prioritization plan | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Program management | 17 | 14 | 72 | 14 |
IT costs | 6 | 4 | 9 | 4 |
Restructuring charges | 124 | 220 | 471 | 220 |
Total | $ 147 | $ 238 | $ 552 | $ 238 |
Transformation Programs - Sched
Transformation Programs - Schedule of Restructuring Activity (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2021 | Jul. 31, 2020 | Jul. 31, 2021 | Jul. 31, 2020 | |
HPE Next | ||||
Restructuring Reserve | ||||
Charges | $ 2 | $ 84 | $ 21 | $ 332 |
HPE Next | Employee Severance | ||||
Restructuring Reserve | ||||
Balance at the beginning of the period | 144 | |||
Charges | 0 | |||
Cash payments | (94) | |||
Non-cash items | 3 | |||
Balance at the end of the period | 53 | 53 | ||
Total costs incurred to date, as of July 31, 2021 | 1,261 | 1,261 | ||
Total expected costs to be incurred as of July 31, 2021 | 1,261 | 1,261 | ||
HPE Next | Infrastructure and other | ||||
Restructuring Reserve | ||||
Balance at the beginning of the period | 52 | |||
Charges | 21 | |||
Cash payments | (29) | |||
Non-cash items | (4) | |||
Balance at the end of the period | 40 | 40 | ||
Total costs incurred to date, as of July 31, 2021 | 246 | 246 | ||
Total expected costs to be incurred as of July 31, 2021 | 248 | 248 | ||
Cost optimization and prioritization plan | ||||
Restructuring Reserve | ||||
Charges | 124 | $ 220 | 471 | $ 220 |
Cost optimization and prioritization plan | Employee Severance | ||||
Restructuring Reserve | ||||
Balance at the beginning of the period | 210 | |||
Charges | 199 | |||
Cash payments | (214) | |||
Non-cash items | 1 | |||
Balance at the end of the period | 196 | 196 | ||
Total costs incurred to date, as of July 31, 2021 | 429 | 429 | ||
Total expected costs to be incurred as of July 31, 2021 | 700 | 700 | ||
Cost optimization and prioritization plan | Infrastructure and other | ||||
Restructuring Reserve | ||||
Balance at the beginning of the period | 68 | |||
Charges | 272 | |||
Cash payments | (86) | |||
Non-cash items | (68) | |||
Balance at the end of the period | 186 | 186 | ||
Total costs incurred to date, as of July 31, 2021 | 371 | 371 | ||
Total expected costs to be incurred as of July 31, 2021 | $ 610 | $ 610 |
Retirement Benefit Plans (Detai
Retirement Benefit Plans (Details) - Benefit Plans - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2021 | Jul. 31, 2020 | Jul. 31, 2021 | Jul. 31, 2020 | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Service cost | $ 24 | $ 23 | $ 73 | $ 69 |
Interest cost | 30 | 35 | 89 | 106 |
Expected return on plan assets | (121) | (133) | (360) | (402) |
Amortization and deferrals: | ||||
Actuarial loss | 74 | 65 | 223 | 194 |
Prior service benefit | (3) | (3) | (10) | (10) |
Net periodic benefit (credit) cost | 4 | (13) | 15 | (43) |
Settlement loss | 0 | 7 | 1 | 8 |
Special termination benefits | 1 | 0 | 3 | 1 |
Total net benefit (credit) cost | $ 5 | $ (6) | $ 19 | $ (34) |
Taxes on Earnings - Narrative (
Taxes on Earnings - Narrative (Details) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Jul. 31, 2021USD ($)socialContributionTax | Jul. 31, 2020USD ($) | Jul. 31, 2021USD ($)socialContributionTax | Jul. 31, 2020USD ($) | Oct. 31, 2020USD ($) | |
Income Tax Examination [Line Items] | |||||
(Provision) benefit for taxes | $ (14) | $ 43 | $ (25) | $ 88 | |
Effective tax rate (as a percent) | 3.40% | 126.50% | 2.80% | 15.50% | |
Net income tax benefits | $ (99) | $ 86 | $ (222) | $ 253 | |
Income tax benefit on restructuring charges, separation costs, transformation costs and acquisition and other related charges | 31 | 72 | 138 | 120 | |
Tax rate changes | 88 | $ 30 | 88 | 30 | |
Pre-Separation tax matters | 30 | (56) | |||
Unrecognized tax benefits | 2,100 | 2,100 | $ 2,200 | ||
Unrecognized tax benefits that would affect effective tax rate if realized | 709 | 709 | 731 | ||
Accrued income tax for interest and penalties | 127 | $ 127 | $ 119 | ||
Likelihood of no resolution period | 12 months | ||||
Reasonably possible reduction in existing unrecognized tax benefits within the next 12 months | $ 75 | $ 75 | |||
Foreign Tax Authority | India | |||||
Income Tax Examination [Line Items] | |||||
Tax rate changes | $ 57 | ||||
Foreign Tax Authority | Brazil | |||||
Income Tax Examination [Line Items] | |||||
Number of social contribution taxes | socialContributionTax | 2 | 2 | |||
PIS contribution tax amount | $ 5 | $ 5 | |||
COFINS contribution tax amount | $ 23 | $ 23 |
Taxes on Earnings - Schedule of
Taxes on Earnings - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Millions | Jul. 31, 2021 | Oct. 31, 2020 |
Income Tax Disclosure [Abstract] | ||
Deferred tax assets | $ 2,025 | $ 1,778 |
Deferred tax liabilities | (384) | (290) |
Deferred tax assets net of deferred tax liabilities | $ 1,641 | $ 1,488 |
Balance Sheet Details - Schedul
Balance Sheet Details - Schedule of Cash and Cash Equivalents (Details) - USD ($) $ in Millions | Jul. 31, 2021 | Oct. 31, 2020 | Jul. 31, 2020 | Oct. 31, 2019 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Cash and cash equivalents | $ 5,293 | $ 4,233 | ||
Restricted cash | 359 | 388 | ||
Total | $ 5,652 | $ 4,621 | $ 8,937 | $ 4,076 |
Balance Sheet Details - Sched_2
Balance Sheet Details - Schedule of Inventory (Details) - USD ($) $ in Millions | Jul. 31, 2021 | Oct. 31, 2020 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Finished goods | $ 1,373 | $ 1,197 |
Purchased parts and fabricated assemblies | 2,569 | 1,477 |
Total | $ 3,942 | $ 2,674 |
Balance Sheet Details - Sched_3
Balance Sheet Details - Schedule of Property, Plant and Equipment and Narrative (Details) - USD ($) $ in Millions | Jul. 31, 2021 | Oct. 31, 2020 |
Property, Plant and Equipment, Net | ||
Machinery and equipment, including equipment held for lease | $ 9,855 | $ 9,624 |
Property, plant and equipment before accumulated depreciation | 11,627 | 11,599 |
Accumulated depreciation | (6,117) | (5,974) |
Total | 5,510 | 5,625 |
Land | ||
Property, Plant and Equipment, Net | ||
Equipment leased to customers | 75 | 89 |
Buildings and leasehold improvements | ||
Property, Plant and Equipment, Net | ||
Equipment leased to customers | $ 1,697 | $ 1,886 |
Balance Sheet Details - Changes
Balance Sheet Details - Changes in Aggregate Product Warranty Liabilities (Details) $ in Millions | 9 Months Ended |
Jul. 31, 2021USD ($) | |
Changes in aggregated product warranty liabilities | |
Balance at beginning of period | $ 385 |
Charges | 159 |
Adjustments related to pre-existing warranties | (27) |
Settlements made | (180) |
Balance at end of period | $ 337 |
Balance Sheet Details - Summary
Balance Sheet Details - Summary of Accounts Receivable, Net (Details) - USD ($) $ in Millions | Jul. 31, 2021 | Oct. 31, 2020 | Oct. 31, 2019 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Accounts receivable | $ 3,125 | $ 3,227 | |
Unbilled receivables | 214 | 205 | |
Allowances | (42) | (46) | $ (31) |
Total | $ 3,297 | $ 3,386 |
Balance Sheet Details - Allowan
Balance Sheet Details - Allowance for Doubtful Accounts (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended |
Jul. 31, 2021 | Oct. 31, 2020 | |
Accounts Receivable, Allowance for Credit Loss | ||
Balance at beginning of year | $ 46 | $ 31 |
Provision for credit losses | 8 | 29 |
Write off's, net of recoveries | (12) | (14) |
Balance at end of year | $ 42 | $ 46 |
Balance Sheet Details - Narrati
Balance Sheet Details - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Jul. 31, 2021 | Jul. 31, 2020 | Jul. 31, 2021 | Jul. 31, 2020 | Oct. 31, 2020 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Trade receivables sold | $ 1,000 | $ 3,100 | $ 3,900 | ||
Deferred revenue | 3,434 | 3,434 | 3,430 | ||
Contract liabilities | 6,400 | 6,400 | 6,200 | ||
Unearned revenue recognized | 2,700 | ||||
Unsatisfied performance obligations | 6,400 | 6,400 | |||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||||
Current portion of capitalized costs | 60 | 60 | 54 | ||
Non-current portion of capitalized costs | 86 | 86 | 76 | ||
Amortization of capitalized costs to obtain a contract | $ 16 | $ 15 | $ 48 | $ 43 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-08-01 | |||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||||
Unsatisfied performance obligation expected to be recognized over the remainder of the year | 21.00% | 21.00% | |||
Expected timing of satisfaction | 3 months | 3 months | |||
Notes payable and short-term borrowings | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Deferred revenue | $ 66 | $ 66 | $ 75 |
Accounting for Leases as a Le_3
Accounting for Leases as a Lessor - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |
Jul. 31, 2021 | Jan. 31, 2021 | Jul. 31, 2021 | |
Leases [Abstract] | |||
Financing receivable term, low end of range | 2 years | ||
Financing receivable term, high end of range | 5 years | ||
Financing receivable sold | $ 30 | $ 103 | $ 110 |
Accounting for Leases as a Le_4
Accounting for Leases as a Lessor - Components of Financing Receivables (Details) - USD ($) $ in Millions | Jul. 31, 2021 | Oct. 31, 2020 | Oct. 31, 2019 |
Leases [Abstract] | |||
Minimum lease payments receivable | $ 9,346 | $ 9,448 | |
Unguaranteed residual value | 386 | 364 | |
Unearned income | (725) | (754) | |
Total | 9,007 | 9,058 | |
Allowance for credit losses | (234) | (154) | $ (131) |
Financing receivables, net | 8,773 | 8,904 | |
Less: current portion | (3,814) | (3,794) | |
Amounts due after one year, net | $ 4,959 | $ 5,110 |
Accounting for Leases as a Le_5
Accounting for Leases as a Lessor - Finance Lease Receivable Maturity (Details) - USD ($) $ in Millions | Jul. 31, 2021 | Oct. 31, 2020 |
Leases [Abstract] | ||
Remainder of fiscal 2021 | $ 1,496 | |
2022 | 3,389 | $ 4,182 |
2023 | 2,306 | 2,662 |
2024 | 1,326 | 1,572 |
2025 | 609 | 720 |
2025 | 252 | |
Thereafter | 220 | |
Thereafter | 60 | |
Total undiscounted cash flows | 9,346 | 9,448 |
Present value of lease payments (recognized as finance receivables) | 8,621 | 8,694 |
Unearned income | $ 725 | $ 754 |
Accounting for Leases as a Le_6
Accounting for Leases as a Lessor - Credit Risk Profile of Financing Receivables (Details) - USD ($) $ in Millions | Jul. 31, 2021 | Oct. 31, 2020 |
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Total | $ 9,007 | $ 9,058 |
Low | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
2021 | 1,341 | |
2020 | 1,607 | |
2019 | 965 | |
2018 | 469 | |
2017 and prior | 198 | |
Total | 4,580 | 4,590 |
Moderate | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
2021 | 1,156 | |
2020 | 1,203 | |
2019 | 880 | |
2018 | 491 | |
2017 and prior | 271 | |
Total | 4,001 | 4,091 |
High | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
2021 | 40 | |
2020 | 94 | |
2019 | 95 | |
2018 | 88 | |
2017 and prior | 109 | |
Total | $ 426 | $ 377 |
Accounting for Leases as a Le_7
Accounting for Leases as a Lessor - Credit Risk Profile of Gross Financing Receivables (Details) - USD ($) $ in Millions | Jul. 31, 2021 | Oct. 31, 2020 |
Gross financing receivables | ||
Financing receivables, net | $ 9,007 | $ 9,058 |
Low | ||
Gross financing receivables | ||
Financing receivables, net | 4,580 | 4,590 |
Moderate | ||
Gross financing receivables | ||
Financing receivables, net | 4,001 | 4,091 |
High | ||
Gross financing receivables | ||
Financing receivables, net | $ 426 | $ 377 |
Accounting for Leases as a Le_8
Accounting for Leases as a Lessor - Allowance for Doubtful Accounts for Financing Receivables (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended |
Jul. 31, 2021 | Oct. 31, 2020 | |
Allowance for doubtful accounts | ||
Balance at beginning of period | $ 154 | $ 131 |
Provision for credit losses | 59 | 43 |
Adjustment to the existing allowance | 19 | 0 |
Write-offs | (26) | (20) |
Balance at end of period | 234 | 154 |
Cumulative Effect, Period of Adoption, Adjustment | ||
Allowance for doubtful accounts | ||
Balance at beginning of period | $ 28 | 0 |
Balance at end of period | $ 28 |
Accounting for Leases as a Le_9
Accounting for Leases as a Lessor - Summary of the Aging and Non-accrual Status of Gross Financing Receivables (Details) - USD ($) $ in Millions | Jul. 31, 2021 | Oct. 31, 2020 |
Financing Receivable, Past Due [Line Items] | ||
Financing receivables, net | $ 9,007 | $ 9,058 |
Gross financing receivables on non-accrual status | 285 | 364 |
Gross financing receivables 90 days past due and still accruing interest | 92 | 74 |
Unbilled | ||
Financing Receivable, Past Due [Line Items] | ||
Financing receivables, net | 8,484 | 8,513 |
Current 1-30 days | Billed | ||
Financing Receivable, Past Due [Line Items] | ||
Financing receivables, net | 347 | 340 |
Past due 31-60 days | Billed | ||
Financing Receivable, Past Due [Line Items] | ||
Financing receivables, net | 38 | 43 |
Past due 61-90 days | Billed | ||
Financing Receivable, Past Due [Line Items] | ||
Financing receivables, net | 17 | 22 |
Past due > 90 days | Billed | ||
Financing Receivable, Past Due [Line Items] | ||
Financing receivables, net | $ 121 | $ 140 |
Accounting for Leases as a L_10
Accounting for Leases as a Lessor - Operating Lease Assets Included in Machinery and Equipment (Details) - USD ($) $ in Millions | Jul. 31, 2021 | Oct. 31, 2020 |
Leases [Abstract] | ||
Equipment leased to customers | $ 7,166 | $ 7,184 |
Accumulated depreciation | (3,223) | (3,157) |
Total | $ 3,943 | $ 4,027 |
Accounting for Leases as a L_11
Accounting for Leases as a Lessor - Operating Lease Payments Maturity (Details) $ in Millions | Jul. 31, 2021USD ($) |
Leases [Abstract] | |
Remainder of fiscal 2021 | $ 510 |
2022 | 1,524 |
2023 | 873 |
2024 | 300 |
2025 | 44 |
Thereafter | 11 |
Total | $ 3,262 |
Accounting for Leases as a L_12
Accounting for Leases as a Lessor - Lessor Activity Included in Income Statement (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2021 | Jul. 31, 2020 | Jul. 31, 2021 | Jul. 31, 2020 | |
Leases [Abstract] | ||||
Interest income | $ 125 | $ 115 | $ 371 | $ 343 |
Lease income - operating leases | 598 | 588 | 1,797 | 1,821 |
Total lease income | $ 723 | $ 703 | $ 2,168 | $ 2,164 |
Accounting for Leases as a L_13
Accounting for Leases as a Lessor - Assets and Liabilities of VIE (Details) - VIE Primary Beneficiary - USD ($) $ in Millions | Jul. 31, 2021 | Oct. 31, 2020 |
Variable Interest Entity [Line Items] | ||
Other current assets | $ 179 | $ 120 |
Short-term | 805 | 531 |
Long-term | 882 | 584 |
Property, plant and equipment | 1,010 | 665 |
Notes payable and short-term borrowings, net of unamortized debt issuance costs | 1,389 | 886 |
Long-term debt, net of unamortized debt issuance costs | $ 1,198 | $ 834 |
Goodwill (Details)
Goodwill (Details) $ in Millions | 3 Months Ended | 9 Months Ended | ||||||
Jul. 31, 2021USD ($)segment | Jan. 31, 2021USD ($)reportingUnit | Jul. 31, 2020USD ($) | Apr. 30, 2020USD ($) | Oct. 31, 2018USD ($) | Jul. 31, 2021USD ($) | Jul. 31, 2020USD ($) | Nov. 01, 2020USD ($) | |
Goodwill [Roll Forward] | ||||||||
Goodwill beginning balance | $ 18,017 | $ 18,017 | ||||||
Goodwill from current period acquisitions | 86 | |||||||
Goodwill adjustments | (11) | |||||||
Goodwill ending balance | $ 18,092 | 18,092 | ||||||
Goodwill impairment | 953 | 953 | ||||||
Impairment of goodwill | $ 0 | $ 0 | 0 | $ 865 | ||||
Number of segments | segment | 6 | |||||||
Number of Reporting Units | reportingUnit | 3 | |||||||
Minimum | ||||||||
Goodwill [Roll Forward] | ||||||||
Percentage of fair value in excess of carrying amount | 8.00% | |||||||
Maximum | ||||||||
Goodwill [Roll Forward] | ||||||||
Percentage of fair value in excess of carrying amount | 37.00% | |||||||
Compute | ||||||||
Goodwill [Roll Forward] | ||||||||
Goodwill beginning balance | $ 7,532 | 7,532 | ||||||
Goodwill from current period acquisitions | 0 | |||||||
Goodwill adjustments | 0 | |||||||
Goodwill ending balance | $ 7,532 | 7,532 | ||||||
HPC & MCS | ||||||||
Goodwill [Roll Forward] | ||||||||
Goodwill beginning balance | 3,616 | 3,616 | ||||||
Goodwill from current period acquisitions | 86 | |||||||
Goodwill adjustments | 0 | |||||||
Goodwill ending balance | 3,702 | 3,702 | ||||||
Impairment of goodwill | $ 865 | |||||||
Percentage of fair value in excess of carrying amount | 8.00% | |||||||
Storage | ||||||||
Goodwill [Roll Forward] | ||||||||
Goodwill beginning balance | 3,946 | 3,946 | ||||||
Goodwill from current period acquisitions | 0 | |||||||
Goodwill adjustments | 0 | |||||||
Goodwill ending balance | 3,946 | 3,946 | ||||||
Intelligent Edge | ||||||||
Goodwill [Roll Forward] | ||||||||
Goodwill beginning balance | 2,566 | 2,566 | ||||||
Goodwill from current period acquisitions | 0 | |||||||
Goodwill adjustments | (11) | |||||||
Goodwill ending balance | 2,555 | 2,555 | ||||||
Financial Services | ||||||||
Goodwill [Roll Forward] | ||||||||
Goodwill beginning balance | 144 | 144 | ||||||
Goodwill from current period acquisitions | 0 | |||||||
Goodwill adjustments | 0 | |||||||
Goodwill ending balance | 144 | 144 | ||||||
Corporate Investments and Other | ||||||||
Goodwill [Roll Forward] | ||||||||
Goodwill beginning balance | $ 213 | 213 | ||||||
Goodwill from current period acquisitions | 0 | |||||||
Goodwill adjustments | 0 | |||||||
Goodwill ending balance | $ 213 | $ 213 | ||||||
Amount of transfer in goodwill | $ 213 | |||||||
CMS Reporting Unit | ||||||||
Goodwill [Roll Forward] | ||||||||
Goodwill ending balance | $ 0 | |||||||
Impairment of goodwill | $ 88 |
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, 2021 | Oct. 31, 2020 |
Assets | ||
Total assets | $ 4,029 | $ 2,762 |
Liabilities | ||
Total liabilities | 190 | 194 |
Time deposits | ||
Assets | ||
Total assets | 1,398 | 939 |
Money market funds | ||
Assets | ||
Total assets | 2,003 | 1,167 |
Foreign bonds | ||
Assets | ||
Total assets | 126 | 125 |
Other debt securities | ||
Assets | ||
Total assets | 43 | 21 |
Interest rate contracts | ||
Assets | ||
Total assets | 153 | 220 |
Liabilities | ||
Total liabilities | 0 | 2 |
Foreign exchange contracts | ||
Assets | ||
Total assets | 211 | 290 |
Liabilities | ||
Total liabilities | 190 | 189 |
Other derivatives | ||
Assets | ||
Total assets | 1 | 0 |
Liabilities | ||
Total liabilities | 0 | 3 |
Equity Securities | ||
Assets | ||
Total assets | 94 | 0 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Assets | ||
Total assets | 2,006 | 1,167 |
Liabilities | ||
Total liabilities | 0 | 0 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Time deposits | ||
Assets | ||
Total assets | 0 | 0 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Money market funds | ||
Assets | ||
Total assets | 2,003 | 1,167 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Foreign bonds | ||
Assets | ||
Total assets | 1 | 0 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Other debt securities | ||
Assets | ||
Total assets | 0 | 0 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Interest rate contracts | ||
Assets | ||
Total assets | 0 | 0 |
Liabilities | ||
Total liabilities | 0 | 0 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Foreign exchange contracts | ||
Assets | ||
Total assets | 0 | 0 |
Liabilities | ||
Total liabilities | 0 | 0 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Other derivatives | ||
Assets | ||
Total assets | 0 | 0 |
Liabilities | ||
Total liabilities | 0 | 0 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Equity Securities | ||
Assets | ||
Total assets | 2 | 0 |
Significant Other Observable Remaining Inputs (Level 2) | ||
Assets | ||
Total assets | 1,888 | 1,574 |
Liabilities | ||
Total liabilities | 190 | 194 |
Significant Other Observable Remaining Inputs (Level 2) | Time deposits | ||
Assets | ||
Total assets | 1,398 | 939 |
Significant Other Observable Remaining Inputs (Level 2) | Money market funds | ||
Assets | ||
Total assets | 0 | 0 |
Significant Other Observable Remaining Inputs (Level 2) | Foreign bonds | ||
Assets | ||
Total assets | 125 | 125 |
Significant Other Observable Remaining Inputs (Level 2) | Other debt securities | ||
Assets | ||
Total assets | 0 | 0 |
Significant Other Observable Remaining Inputs (Level 2) | Interest rate contracts | ||
Assets | ||
Total assets | 153 | 220 |
Liabilities | ||
Total liabilities | 0 | 2 |
Significant Other Observable Remaining Inputs (Level 2) | Foreign exchange contracts | ||
Assets | ||
Total assets | 211 | 290 |
Liabilities | ||
Total liabilities | 190 | 189 |
Significant Other Observable Remaining Inputs (Level 2) | Other derivatives | ||
Assets | ||
Total assets | 1 | 0 |
Liabilities | ||
Total liabilities | 0 | 3 |
Significant Other Observable Remaining Inputs (Level 2) | Equity Securities | ||
Assets | ||
Total assets | 0 | 0 |
Significant Other Unobservable Remaining Inputs (Level 3) | ||
Assets | ||
Total assets | 135 | 21 |
Liabilities | ||
Total liabilities | 0 | 0 |
Significant Other Unobservable Remaining Inputs (Level 3) | Time deposits | ||
Assets | ||
Total assets | 0 | 0 |
Significant Other Unobservable Remaining Inputs (Level 3) | Money market funds | ||
Assets | ||
Total assets | 0 | 0 |
Significant Other Unobservable Remaining Inputs (Level 3) | Foreign bonds | ||
Assets | ||
Total assets | 0 | 0 |
Significant Other Unobservable Remaining Inputs (Level 3) | Other debt securities | ||
Assets | ||
Total assets | 43 | 21 |
Significant Other Unobservable Remaining Inputs (Level 3) | Interest rate contracts | ||
Assets | ||
Total assets | 0 | 0 |
Liabilities | ||
Total liabilities | 0 | 0 |
Significant Other Unobservable Remaining Inputs (Level 3) | Foreign exchange contracts | ||
Assets | ||
Total assets | 0 | 0 |
Liabilities | ||
Total liabilities | 0 | 0 |
Significant Other Unobservable Remaining Inputs (Level 3) | Other derivatives | ||
Assets | ||
Total assets | 0 | 0 |
Liabilities | ||
Total liabilities | 0 | 0 |
Significant Other Unobservable Remaining Inputs (Level 3) | Equity Securities | ||
Assets | ||
Total assets | $ 92 | $ 0 |
Fair Value - Narrative (Details
Fair Value - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Jul. 31, 2021 | Jul. 31, 2020 | Apr. 30, 2020 | Jul. 31, 2021 | Jul. 31, 2020 | Oct. 31, 2020 | |
Financial assets and liabilities measured at fair value on a recurring basis | ||||||
Impairment of goodwill | $ 0 | $ 0 | $ 0 | $ 865 | ||
Interest and Other, Net | ||||||
Financial assets and liabilities measured at fair value on a recurring basis | ||||||
Recognized gain from equity investments without readily determinable fair value | 25 | |||||
Significant Other Unobservable Remaining Inputs (Level 3) | ||||||
Financial assets and liabilities measured at fair value on a recurring basis | ||||||
Right-of-use asset impairment charges | 4 | 72 | ||||
HPC & MCS | ||||||
Financial assets and liabilities measured at fair value on a recurring basis | ||||||
Impairment of goodwill | $ 865 | |||||
HPC & MCS | Significant Other Unobservable Remaining Inputs (Level 3) | ||||||
Financial assets and liabilities measured at fair value on a recurring basis | ||||||
Impairment of goodwill | $ 865 | |||||
Fair Value | ||||||
Financial assets and liabilities measured at fair value on a recurring basis | ||||||
Fair value, short-term and long-term debt | 17,600 | 17,600 | $ 17,100 | |||
Carrying Value | ||||||
Financial assets and liabilities measured at fair value on a recurring basis | ||||||
Fair value, short-term and long-term debt | $ 16,200 | $ 16,200 | $ 15,900 |
Financial Instruments - Cash Eq
Financial Instruments - Cash Equivalents and Available-for-Sale Investments (Details) - USD ($) $ in Millions | Jul. 31, 2021 | Oct. 31, 2020 |
Cash and Cash Equivalents [Line Items] | ||
Debt securities, Amortized Cost | $ 152 | |
Debt securities, Gross Unrealized Gain | 17 | $ 18 |
Debt securities, Fair Value | 169 | |
Total cash and equivalents and available-for-sale investments, Cost basis | 3,553 | 2,234 |
Total cash equivalents and available-for-sale debt investments | 3,570 | 2,252 |
Cost | ||
Cash and Cash Equivalents [Line Items] | ||
Total cash equivalents | 3,401 | 2,106 |
Cost | Time deposits | ||
Cash and Cash Equivalents [Line Items] | ||
Total cash equivalents | 1,398 | 939 |
Cost | Money market funds | ||
Cash and Cash Equivalents [Line Items] | ||
Total cash equivalents | 2,003 | 1,167 |
Fair Value | ||
Cash and Cash Equivalents [Line Items] | ||
Total cash equivalents | 3,401 | 2,106 |
Fair Value | Time deposits | ||
Cash and Cash Equivalents [Line Items] | ||
Total cash equivalents | 1,398 | 939 |
Fair Value | Money market funds | ||
Cash and Cash Equivalents [Line Items] | ||
Total cash equivalents | 2,003 | 1,167 |
Debt securities | ||
Cash and Cash Equivalents [Line Items] | ||
Debt securities, Amortized Cost | 152 | 128 |
Debt securities, Gross Unrealized Gain | 17 | 18 |
Debt securities, Fair Value | 169 | 146 |
Foreign bonds | ||
Cash and Cash Equivalents [Line Items] | ||
Debt securities, Amortized Cost | 110 | 108 |
Debt securities, Gross Unrealized Gain | 16 | 17 |
Debt securities, Fair Value | 126 | 125 |
Other debt securities | ||
Cash and Cash Equivalents [Line Items] | ||
Debt securities, Amortized Cost | 42 | 20 |
Debt securities, Gross Unrealized Gain | 1 | 1 |
Debt securities, Fair Value | $ 43 | $ 21 |
Financial Instruments - Contrac
Financial Instruments - Contractual Maturities of Investments in Available-for-Sale Debt Securities (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Jul. 31, 2021 | Jul. 31, 2020 | Jul. 31, 2021 | Jul. 31, 2020 | Oct. 31, 2020 | |
Amortized Cost | |||||
Due in one to five years | $ 25 | $ 25 | |||
Due in more than five years | 127 | 127 | |||
Debt securities, Amortized Cost | 152 | 152 | |||
Fair Value | |||||
Due in one to five years | 25 | 25 | |||
Due in more than five years | 144 | 144 | |||
Debt securities, Fair Value | 169 | 169 | |||
Summary of Investment Holdings [Line Items] | |||||
Investments in equity interests | 2,286 | 2,286 | $ 2,170 | ||
Earnings from equity interests | 79 | $ 27 | 109 | $ 50 | |
Fair Value | |||||
Summary of Investment Holdings [Line Items] | |||||
Investments in equity interests | 2,300 | 2,300 | 2,200 | ||
Equity Securities in Privately Held Companies | Measurement Alternative | |||||
Summary of Investment Holdings [Line Items] | |||||
Equity securities without readily determinable fair value | 252 | 252 | $ 295 | ||
Unrealized gain on equity securities | 25 | ||||
Equity Securities in Privately Held Companies | Fair Value | |||||
Summary of Investment Holdings [Line Items] | |||||
Equity securities without readily determinable fair value | $ 92 | 92 | |||
Unrealized gain on equity securities | $ 34 |
Financial Instruments - Gross N
Financial Instruments - Gross Notional and Fair Value of Instruments in the Balance Sheets (Details) - USD ($) $ in Millions | Jul. 31, 2021 | Oct. 31, 2020 |
Derivatives, Fair Value | ||
Outstanding Gross Notional | $ 19,579 | $ 20,068 |
Other Current Assets | ||
Derivatives, Fair Value | ||
Derivative asset, fair value | 135 | 152 |
Long-Term Financing Receivables and Other Assets | ||
Derivatives, Fair Value | ||
Derivative asset, fair value | 230 | 358 |
Other Accrued Liabilities | ||
Derivatives, Fair Value | ||
Derivative liability, fair value | 106 | 146 |
Long-Term Other Liabilities | ||
Derivatives, Fair Value | ||
Derivative liability, fair value | 84 | 48 |
Derivatives designated as hedging instruments | ||
Derivatives, Fair Value | ||
Outstanding Gross Notional | 13,543 | 13,806 |
Derivatives designated as hedging instruments | Other Current Assets | ||
Derivatives, Fair Value | ||
Derivative asset, fair value | 114 | 109 |
Derivatives designated as hedging instruments | Long-Term Financing Receivables and Other Assets | ||
Derivatives, Fair Value | ||
Derivative asset, fair value | 223 | 349 |
Derivatives designated as hedging instruments | Other Accrued Liabilities | ||
Derivatives, Fair Value | ||
Derivative liability, fair value | 83 | 108 |
Derivatives designated as hedging instruments | Long-Term Other Liabilities | ||
Derivatives, Fair Value | ||
Derivative liability, fair value | 82 | 47 |
Derivatives designated as hedging instruments | Fair value hedges | Interest rate contracts | ||
Derivatives, Fair Value | ||
Outstanding Gross Notional | 3,850 | 3,850 |
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 | 153 | 220 |
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 | 0 | 0 |
Derivatives designated as hedging instruments | Cash flow hedges | Interest rate contracts | ||
Derivatives, Fair Value | ||
Outstanding Gross Notional | 0 | 500 |
Derivatives designated as hedging instruments | Cash flow hedges | Interest rate contracts | Other Current Assets | ||
Derivatives, Fair Value | ||
Derivative asset, fair value | 0 | 0 |
Derivatives designated as hedging instruments | Cash flow hedges | Interest rate contracts | Long-Term Financing Receivables and Other Assets | ||
Derivatives, Fair Value | ||
Derivative asset, fair value | 0 | 0 |
Derivatives designated as hedging instruments | Cash flow hedges | Interest rate contracts | Other Accrued Liabilities | ||
Derivatives, Fair Value | ||
Derivative liability, fair value | 0 | 2 |
Derivatives designated as hedging instruments | Cash flow hedges | Interest rate contracts | Long-Term Other Liabilities | ||
Derivatives, Fair Value | ||
Derivative liability, fair value | 0 | 0 |
Derivatives designated as hedging instruments | Cash flow hedges | Foreign exchange contracts | ||
Derivatives, Fair Value | ||
Outstanding Gross Notional | 7,872 | 7,652 |
Derivatives designated as hedging instruments | Cash flow hedges | Foreign exchange contracts | Other Current Assets | ||
Derivatives, Fair Value | ||
Derivative asset, fair value | 89 | 75 |
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 | 46 | 85 |
Derivatives designated as hedging instruments | Cash flow hedges | Foreign exchange contracts | Other Accrued Liabilities | ||
Derivatives, Fair Value | ||
Derivative liability, fair value | 65 | 95 |
Derivatives designated as hedging instruments | Cash flow hedges | Foreign exchange contracts | Long-Term Other Liabilities | ||
Derivatives, Fair Value | ||
Derivative liability, fair value | 62 | 38 |
Derivatives designated as hedging instruments | Net investment hedges | Foreign exchange contracts | ||
Derivatives, Fair Value | ||
Outstanding Gross Notional | 1,821 | 1,804 |
Derivatives designated as hedging instruments | Net investment hedges | Foreign exchange contracts | Other Current Assets | ||
Derivatives, Fair Value | ||
Derivative asset, fair value | 25 | 34 |
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 | 24 | 44 |
Derivatives designated as hedging instruments | Net investment hedges | Foreign exchange contracts | Other Accrued Liabilities | ||
Derivatives, Fair Value | ||
Derivative liability, fair value | 18 | 11 |
Derivatives designated as hedging instruments | Net investment hedges | Foreign exchange contracts | Long-Term Other Liabilities | ||
Derivatives, Fair Value | ||
Derivative liability, fair value | 20 | 9 |
Derivatives not designated as hedging instruments | ||
Derivatives, Fair Value | ||
Outstanding Gross Notional | 6,036 | 6,262 |
Derivatives not designated as hedging instruments | Other Current Assets | ||
Derivatives, Fair Value | ||
Derivative asset, fair value | 21 | 43 |
Derivatives not designated as hedging instruments | Long-Term Financing Receivables and Other Assets | ||
Derivatives, Fair Value | ||
Derivative asset, fair value | 7 | 9 |
Derivatives not designated as hedging instruments | Other Accrued Liabilities | ||
Derivatives, Fair Value | ||
Derivative liability, fair value | 23 | 38 |
Derivatives not designated as hedging instruments | Long-Term Other Liabilities | ||
Derivatives, Fair Value | ||
Derivative liability, fair value | 2 | 1 |
Derivatives not designated as hedging instruments | Foreign exchange contracts | ||
Derivatives, Fair Value | ||
Outstanding Gross Notional | 5,923 | 6,157 |
Derivatives not designated as hedging instruments | Foreign exchange contracts | Other Current Assets | ||
Derivatives, Fair Value | ||
Derivative asset, fair value | 20 | 43 |
Derivatives not designated as hedging instruments | Foreign exchange contracts | Long-Term Financing Receivables and Other Assets | ||
Derivatives, Fair Value | ||
Derivative asset, fair value | 7 | 9 |
Derivatives not designated as hedging instruments | Foreign exchange contracts | Other Accrued Liabilities | ||
Derivatives, Fair Value | ||
Derivative liability, fair value | 23 | 35 |
Derivatives not designated as hedging instruments | Foreign exchange contracts | Long-Term Other Liabilities | ||
Derivatives, Fair Value | ||
Derivative liability, fair value | 2 | 1 |
Derivatives not designated as hedging instruments | Other derivatives | ||
Derivatives, Fair Value | ||
Outstanding Gross Notional | 113 | 105 |
Derivatives not designated as hedging instruments | Other derivatives | Other Current Assets | ||
Derivatives, Fair Value | ||
Derivative asset, fair value | 1 | 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 | 0 | 3 |
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) $ in Millions | Jul. 31, 2021USD ($)business_day | Oct. 31, 2020USD ($)business_day |
Derivative assets | ||
Gross Amount Recognized | $ 365 | $ 510 |
Gross Amount Offset | 0 | 0 |
Net Amount Presented | 365 | 510 |
Gross Amounts Not Offset | ||
Derivatives | 154 | 137 |
Financial Collateral | 203 | 321 |
Net Amount | 8 | 52 |
Derivative liabilities | ||
Gross Amount Recognized | 190 | 194 |
Gross Amount Offset | 0 | 0 |
Net Amount Presented | 190 | 194 |
Gross Amounts Not Offset | ||
Derivatives | 154 | 137 |
Financial Collateral | 30 | 55 |
Net Amount | $ 6 | $ 2 |
Business days prior to respective reporting date | business_day | 2 | 2 |
Cash collateral | $ 5 | |
Counterparty collateral | $ 25 | $ 55 |
Financial Instruments - Amounts
Financial Instruments - Amounts Recorded in the Balance Sheet (Details) - Long-term debt - USD ($) $ in Millions | Jul. 31, 2021 | Oct. 31, 2020 |
Derivatives, Fair Value | ||
Carrying amount of the hedged assets/ (liabilities) | $ (3,994) | $ (4,059) |
Cumulative amount of fair value hedging adjustment included in the carrying amount of the hedged (liabilities) | $ (153) | $ (220) |
Financial Instruments - Pre-tax
Financial Instruments - Pre-tax Effect of Derivative Instruments in Hedging Relationships on OCI (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2021 | Jul. 31, 2020 | Jul. 31, 2021 | Jul. 31, 2020 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gains (Losses) Recognized in OCI on Derivatives in Cash Flow Hedging Relationship | $ 101 | $ (456) | $ (183) | $ (85) |
Total | 117 | (539) | (244) | (35) |
Expected amount of AOCI expected to be reclassified in the next 12 months | 42 | 42 | ||
Foreign currency contracts | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gains (Losses) Recognized in OCI on Derivatives in Cash Flow Hedging Relationship | 101 | (456) | (183) | (79) |
Gains (Losses) Recognized in OCI on Derivatives in Net Investment Hedging Relationship | 16 | (83) | (61) | 50 |
Interest rate contracts | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gains (Losses) Recognized in OCI on Derivatives in Cash Flow Hedging Relationship | $ 0 | $ 0 | $ (6) |
Financial Instruments - Pre-t_2
Financial Instruments - Pre-tax Effect of Derivative Instruments on Statement of Earnings (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2021 | Jul. 31, 2020 | Jul. 31, 2021 | Jul. 31, 2020 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Net revenue | $ 6,897 | $ 6,816 | $ 20,430 | $ 19,774 |
Interest and other, net | (50) | (71) | (105) | (158) |
Net revenue | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Total gains (losses) | (14) | 23 | (113) | 97 |
Interest and other, net | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Total gains (losses) | 16 | (263) | (207) | (4) |
Interest rate contracts | Net revenue | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gains (losses) on derivatives in fair value hedging relationships | 0 | 0 | 0 | 0 |
Amount of gains (losses) reclassified from accumulated other comprehensive income into income | 0 | 0 | 0 | 0 |
Interest rate contracts | Interest and other, net | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gains (losses) on derivatives in fair value hedging relationships | (3) | (13) | 67 | (198) |
Amount of gains (losses) reclassified from accumulated other comprehensive income into income | 0 | (1) | (2) | (1) |
Foreign currency contracts | Net revenue | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of gains (losses) reclassified from accumulated other comprehensive income into income | (14) | 23 | (113) | 97 |
Gains (losses) on derivatives not designated as hedging instruments | 0 | 0 | 0 | 0 |
Foreign currency contracts | Interest and other, net | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of gains (losses) reclassified from accumulated other comprehensive income into income | 50 | (264) | (147) | (55) |
Gains (losses) on derivatives not designated as hedging instruments | (33) | 8 | (61) | 53 |
Other derivatives | Net revenue | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gains (losses) on derivatives not designated as hedging instruments | 0 | 0 | 0 | 0 |
Other derivatives | Interest and other, net | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gains (losses) on derivatives not designated as hedging instruments | (1) | (6) | 3 | (1) |
Derivatives designated as hedging instruments | Interest rate contracts | Net revenue | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gains (losses) on derivatives in fair value hedging relationships | 0 | 0 | 0 | 0 |
Derivatives designated as hedging instruments | Interest rate contracts | Interest and other, net | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gains (losses) on derivatives in fair value hedging relationships | $ 3 | $ 13 | $ (67) | $ 198 |
Borrowings - Notes Payable and
Borrowings - Notes Payable and Short-Term Borrowings (Details) - USD ($) $ in Millions | Jul. 31, 2021 | Oct. 31, 2020 |
Debt Disclosure [Abstract] | ||
Current portion of long-term debt | $ 2,741 | $ 2,768 |
FS commercial paper | 694 | 677 |
Notes payable to banks, lines of credit and other | 301 | 310 |
Notes payable and short-term borrowings | 3,736 | 3,755 |
Long-term debt | 12,489 | 12,186 |
Total Debt | $ 16,225 | $ 15,941 |
Borrowings - Narrative (Details
Borrowings - Narrative (Details) $ in Millions | 1 Months Ended | ||||
Jun. 30, 2021USD ($)tranche | Mar. 31, 2021USD ($)tranche | Jul. 31, 2021USD ($)program | Oct. 31, 2020USD ($) | Mar. 31, 2020USD ($) | |
Asset-backed Debt Securities | |||||
Line of Credit Facility [Line Items] | |||||
Amount issued | $ 753 | $ 1,000 | |||
Number of tranches | tranche | 6 | 6 | |||
Discount rate at issuance | 99.99% | 99.99% | |||
Weighted-average interest rate | 0.58% | 0.49% | |||
Senior Notes | |||||
Line of Credit Facility [Line Items] | |||||
Repayments of senior debt | $ 500 | ||||
Senior Notes | London Interbank Offered Rate (LIBOR) | |||||
Line of Credit Facility [Line Items] | |||||
Basis spread on variable rate | 0.68% | ||||
Commercial Paper | |||||
Line of Credit Facility [Line Items] | |||||
Number of commercial paper programs | program | 2 | ||||
Maximum borrowing capacity under commercial paper program | $ 4,750 | ||||
Amount outstanding | $ 0 | $ 0 | |||
Commercial Paper | Euro Commercial Paper Program | |||||
Line of Credit Facility [Line Items] | |||||
Maximum borrowing capacity under commercial paper program | 3,000 | ||||
Commercial Paper | Euro Commercial Paper Certificate of Deposit Programme | |||||
Line of Credit Facility [Line Items] | |||||
Maximum borrowing capacity under commercial paper program | 1,000 | ||||
Commercial Paper | Hewlett Packard Enterprise | Euro Commercial Paper Certificate of Deposit Programme | |||||
Line of Credit Facility [Line Items] | |||||
Amount outstanding | $ 694 | $ 677 |
Stockholders' Equity - Componen
Stockholders' Equity - Components of AOCI (Details) - USD ($) $ in Millions | 9 Months Ended | ||
Jul. 31, 2021 | Jul. 31, 2020 | ||
Components of accumulated other comprehensive loss, net of taxes | |||
Balance at beginning of period | $ 16,096 | ||
Balance at end of period | 17,073 | ||
Net unrealized gains (losses) on available-for-sale securities | |||
Components of accumulated other comprehensive loss, net of taxes | |||
Balance at beginning of period | 18 | $ 23 | |
Other comprehensive income (loss) before reclassifications | (1) | 0 | |
Reclassifications of (gains) losses into earnings | 0 | (8) | |
Tax (provision) benefit | 0 | 0 | |
Balance at end of period | 17 | 15 | |
Net unrealized gains (losses) on cash flow hedges | |||
Components of accumulated other comprehensive loss, net of taxes | |||
Balance at beginning of period | (7) | 53 | |
Other comprehensive income (loss) before reclassifications | (183) | (85) | |
Reclassifications of (gains) losses into earnings | 262 | (41) | |
Tax (provision) benefit | (14) | 20 | |
Balance at end of period | 58 | (63) | |
Net unrealized gains (losses) on cash flow hedges | Cumulative Effect, Period of Adoption, Adjustment | |||
Components of accumulated other comprehensive loss, net of taxes | |||
Balance at beginning of period | (10) | ||
Unrealized components of defined benefit plans | |||
Components of accumulated other comprehensive loss, net of taxes | |||
Balance at beginning of period | (3,473) | (3,366) | |
Other comprehensive income (loss) before reclassifications | 29 | (10) | |
Reclassifications of (gains) losses into earnings | 214 | 191 | |
Tax (provision) benefit | (15) | (11) | |
Balance at end of period | (3,245) | (3,196) | |
Cumulative translation adjustment | |||
Components of accumulated other comprehensive loss, net of taxes | |||
Balance at beginning of period | (477) | (437) | |
Other comprehensive income (loss) before reclassifications | 20 | (46) | |
Reclassifications of (gains) losses into earnings | 0 | 0 | |
Tax (provision) benefit | (4) | 4 | |
Balance at end of period | (461) | (512) | |
Cumulative translation adjustment | Cumulative Effect, Period of Adoption, Adjustment | |||
Components of accumulated other comprehensive loss, net of taxes | |||
Balance at beginning of period | (33) | ||
Accumulated other comprehensive loss | |||
Components of accumulated other comprehensive loss, net of taxes | |||
Balance at beginning of period | (3,939) | (3,727) | |
Other comprehensive income (loss) before reclassifications | (135) | (141) | |
Reclassifications of (gains) losses into earnings | 476 | 142 | |
Tax (provision) benefit | (33) | 13 | |
Balance at end of period | $ (3,631) | (3,756) | |
Accumulated other comprehensive loss | Cumulative Effect, Period of Adoption, Adjustment | |||
Components of accumulated other comprehensive loss, net of taxes | |||
Balance at beginning of period | [1] | $ (43) | |
[1] | Represents the impact of the adoption of an accounting standard update that allows for the reclassification of stranded tax effects from accumulated other comprehensive loss toaccumulated deficit. |
Stockholders' Equity - Narrativ
Stockholders' Equity - Narrative (Details) $ in Billions | Jul. 31, 2021USD ($) |
Equity [Abstract] | |
Remaining authorized repurchase amount | $ 2.1 |
Net Earnings (Loss) Per Share_2
Net Earnings (Loss) Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2021 | Jul. 31, 2020 | Jul. 31, 2021 | Jul. 31, 2020 | |
Numerator: | ||||
Net earnings (loss) | $ 392 | $ 9 | $ 874 | $ (479) |
Denominator: | ||||
Weighted-average shares used to compute basic net EPS (in shares) | 1,314 | 1,292 | 1,308 | 1,294 |
Dilutive effect of employee stock plans (in shares) | 24 | 8 | 20 | 0 |
Weighted-average shares used to compute diluted net EPS (in shares) | 1,338 | 1,300 | 1,328 | 1,294 |
Net earnings (loss) per share: | ||||
Basic (in dollars per share) | $ 0.30 | $ 0.01 | $ 0.67 | $ (0.37) |
Diluted (in dollars per share) | $ 0.29 | $ 0.01 | $ 0.66 | $ (0.37) |
Anti-dilutive weighted-average stock awards (in shares) | 1 | 21 | 7 | 48 |
Litigation and Contingencies (D
Litigation and Contingencies (Details) $ in Millions | Sep. 22, 2020patent | May 16, 2019USD ($) | Dec. 19, 2016 | Jun. 30, 2016USD ($) | Jan. 24, 2013USD ($) | Dec. 11, 2012USD ($) | Apr. 21, 2012USD ($) | May 10, 2010USD ($)employee | Apr. 29, 2010USD ($) | Jul. 31, 2011 | Jul. 31, 2021 | Oct. 31, 2008contract | Apr. 20, 2012USD ($) | Apr. 11, 2012USD ($) | Jun. 15, 2011phase |
Litigation and Contingencies | |||||||||||||||
Damages sought | $ 370 | ||||||||||||||
Q3 Networking Litigation | |||||||||||||||
Litigation and Contingencies | |||||||||||||||
Number of patents allegedly infringed | patent | 4 | ||||||||||||||
Judicial ruling | Oracle | |||||||||||||||
Litigation and Contingencies | |||||||||||||||
Number of phases | phase | 2 | ||||||||||||||
Amount awarded | $ 3,000 | ||||||||||||||
Judicial ruling | Oracle - past lost profits | |||||||||||||||
Litigation and Contingencies | |||||||||||||||
Amount awarded | 1,700 | ||||||||||||||
Judicial ruling | Oracle - future lost profits | |||||||||||||||
Litigation and Contingencies | |||||||||||||||
Amount awarded | $ 1,300 | ||||||||||||||
Renewed judgement | Oracle | |||||||||||||||
Litigation and Contingencies | |||||||||||||||
Amount awarded | $ 3,800 | ||||||||||||||
Daily interest accrual on renewed judgement | $ 1 | ||||||||||||||
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 | ||||||||||||||
Bangalore Commissioner of Customs | |||||||||||||||
Litigation and Contingencies | |||||||||||||||
Duties and penalties under show cause notices | $ 17 | $ 386 | |||||||||||||
Amount deposited under show cause notice prior to order | $ 7 | $ 9 | |||||||||||||
Additional amount deposited against products-related show cause notice | $ 10 | ||||||||||||||
Additional amount deposited against parts-related show cause notice | $ 3 | ||||||||||||||
Additional amount deposited against product order | $ 24 | ||||||||||||||
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 |
Uncategorized Items - hpe-20210
Label | Element | Value |
High Performance Compute and Mission Critical Systems Segment [Member] | ||
Goodwill | us-gaap_Goodwill | $ 3,600,000,000 |