Cover Page
Cover Page - shares | 3 Months Ended | |
Jan. 31, 2023 | Mar. 02, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jan. 31, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-37483 | |
Entity Registrant Name | HEWLETT PACKARD ENTERPRISE COMPANY | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 47-3298624 | |
Entity Address, Address Line One | 1701 East Mossy Oaks Road, | |
Entity Address, City or Town | Spring, | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 77389 | |
City Area Code | (678) | |
Local Phone Number | 259-9860 | |
Title of 12(b) Security | Common stock, par value $0.01 per share | |
Trading Symbol | HPE | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 1,295,869,008 | |
Entity Central Index Key | 0001645590 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --10-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q1 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Earnings (Unaudited) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
Jan. 31, 2023 | Jan. 31, 2022 | |
Net revenue: | ||
Financing income | $ 123 | $ 122 |
Total net revenue | 7,809 | 6,961 |
Costs and expenses: | ||
Financing cost | 78 | 46 |
Research and development | 623 | 504 |
Selling, general and administrative | 1,257 | 1,201 |
Amortization of intangible assets | 73 | 73 |
Transformation costs | 102 | 111 |
Disaster (charges) recovery | 1 | (1) |
Acquisition, disposition and other related charges | 11 | 8 |
Total costs and expenses | 7,218 | 6,513 |
Earnings from operations | 591 | 448 |
Interest and other, net | (25) | (5) |
Tax indemnification and related adjustments | (1) | (17) |
Non-service net periodic benefit credit | 0 | 36 |
Earnings from equity interests | 58 | 31 |
Earnings before (provision) benefit for taxes | 623 | 493 |
(Provision) benefit for taxes | (122) | 20 |
Net earnings | $ 501 | $ 513 |
Net earnings per share: | ||
Basic (in dollars per share) | $ 0.39 | $ 0.39 |
Diluted (in dollars per share) | $ 0.38 | $ 0.39 |
Weighted-average shares used to compute net earnings per share: | ||
Basic (in shares) | 1,298 | 1,304 |
Diluted (in shares) | 1,315 | 1,325 |
Products | ||
Net revenue: | ||
Revenues | $ 5,114 | $ 4,243 |
Costs and expenses: | ||
Cost of products and services | 3,460 | 3,016 |
Services | ||
Net revenue: | ||
Revenues | 2,572 | 2,596 |
Costs and expenses: | ||
Cost of products and services | $ 1,613 | $ 1,555 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Millions | 3 Months Ended | |
Jan. 31, 2023 | Jan. 31, 2022 | |
Statement of Comprehensive Income [Abstract] | ||
Net earnings | $ 501 | $ 513 |
Change in net unrealized gains (losses) on available-for-sale securities: | ||
Net unrealized gains (losses) arising during the period | 5 | (1) |
Change in net unrealized gains (losses) on available-for-sale securities | 5 | (1) |
Change in net unrealized (losses) gains on cash flow hedges: | ||
Net unrealized (losses) gains arising during the period | (518) | 215 |
Net losses (gains) reclassified into earnings | 247 | (201) |
Change in net unrealized gains (losses) on cash flow hedges | (271) | 14 |
Change in unrealized components of defined benefit plans: | ||
Net unrealized gains arising during the period | 0 | 6 |
Amortization of net actuarial loss and prior service benefit | 35 | 41 |
Curtailments, settlements and other | 0 | 1 |
Change in unrealized components of defined benefit plans | 35 | 48 |
Change in cumulative translation adjustment | 20 | (11) |
Other comprehensive (loss) income before taxes | (211) | 50 |
Benefit (provision) for taxes | 53 | (13) |
Other comprehensive (loss) income, net of taxes | (158) | 37 |
Comprehensive income | $ 343 | $ 550 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Jan. 31, 2023 | Oct. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 2,530 | $ 4,163 |
Accounts receivable, net of allowances | 4,201 | 4,101 |
Financing receivables, net of allowances | 3,726 | 3,522 |
Inventory | 4,644 | 5,161 |
Other current assets | 3,133 | 3,559 |
Total current assets | 18,234 | 20,506 |
Property, plant and equipment | 5,990 | 5,784 |
Long-term financing receivables and other assets | 11,046 | 10,537 |
Investments in equity interests | 2,225 | 2,160 |
Goodwill | 17,421 | 17,403 |
Intangible assets | 675 | 733 |
Total assets | 55,591 | 57,123 |
Current liabilities: | ||
Notes payable and short-term borrowings | 5,349 | 4,612 |
Accounts payable | 6,535 | 8,717 |
Employee compensation and benefits | 1,284 | 1,401 |
Taxes on earnings | 210 | 176 |
Deferred revenue | 3,533 | 3,451 |
Accrued restructuring | 185 | 192 |
Other accrued liabilities | 4,380 | 4,625 |
Total current liabilities | 21,476 | 23,174 |
Long-term debt | 7,577 | 7,853 |
Other non-current liabilities | 6,475 | 6,187 |
Commitments and contingencies | ||
HPE stockholders' equity: | ||
Common stock, $0.01 par value (9,600 shares authorized; 1,297 and 1,281 shares issued and outstanding at January 31, 2023 and October 31, 2022, respectively) | 13 | 13 |
Additional paid-in capital | 28,259 | 28,299 |
Accumulated deficit | (5,005) | (5,350) |
Accumulated other comprehensive loss | (3,256) | (3,098) |
Total HPE stockholders' equity | 20,011 | 19,864 |
Non-controlling interests | 52 | 45 |
Total stockholders' equity | 20,063 | 19,909 |
Total liabilities and stockholders' equity | $ 55,591 | $ 57,123 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares shares in Millions | Jan. 31, 2023 | Oct. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 9,600 | 9,600 |
Common stock, shares issued | 1,297 | 1,281 |
Common stock, shares outstanding | 1,297 | 1,281 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions | 3 Months Ended | |
Jan. 31, 2023 | Jan. 31, 2022 | |
Cash flows from operating activities: | ||
Net earnings | $ 501 | $ 513 |
Adjustments to reconcile net earnings to net cash used in operating activities: | ||
Depreciation and amortization | 656 | 621 |
Stock-based compensation expense | 140 | 128 |
Provision for inventory and doubtful accounts | 45 | 46 |
Restructuring charges | 72 | 37 |
Deferred taxes on earnings | 20 | 37 |
Earnings from equity interests | (58) | (31) |
Other, net | (60) | (27) |
Changes in operating assets and liabilities, net of acquisitions: | ||
Accounts receivable | (112) | 543 |
Financing receivables | (523) | 181 |
Inventory | 495 | (834) |
Accounts payable | (2,195) | (438) |
Taxes on earnings | 46 | (111) |
Restructuring | (96) | (114) |
Other assets and liabilities | 240 | (627) |
Net cash used in operating activities | (829) | (76) |
Cash flows from investing activities: | ||
Investment in property, plant and equipment | (794) | (624) |
Proceeds from sale of property, plant and equipment | 159 | 123 |
Purchases of investments | 0 | (21) |
Proceeds from maturities and sales of investments | 4 | 44 |
Financial collateral posted | (682) | (10) |
Financial collateral received | 108 | 153 |
Payments made in connection with business acquisitions, net of cash acquired | (32) | 0 |
Net cash used in investing activities | (1,237) | (335) |
Cash flows from financing activities: | ||
Short-term borrowings with original maturities less than 90 days, net | 745 | 53 |
Proceeds from debt, net of issuance costs | 261 | 1,276 |
Payment of debt | (661) | (633) |
Net payments related to stock-based award activities | (107) | (57) |
Repurchase of common stock | (73) | (129) |
Cash dividends paid to shareholders | (156) | (155) |
Net cash provided by financing activities | 9 | 355 |
Effect of Exchange Rate on Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents, Continuing Operations | 138 | 0 |
Decrease in cash, cash equivalents and restricted cash | (1,919) | (56) |
Cash, cash equivalents and restricted cash at beginning of period | 4,763 | 4,332 |
Cash, cash equivalents and restricted cash at end of period | $ 2,844 | $ 4,276 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) shares in Thousands, $ in Millions | Total | Equity Attributable to the Company | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Non- controlling Interests | Total Equity |
Balance at beginning of period (in shares) at Oct. 31, 2021 | 1,294,634 | |||||||
Balance at beginning of period at Oct. 31, 2021 | $ 19,971 | $ 13 | $ 28,470 | $ (5,597) | $ (2,915) | $ 46 | $ 20,017 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net earnings | 513 | 513 | 1 | 514 | ||||
Other comprehensive income (loss) | $ 37 | 37 | 37 | 37 | ||||
Comprehensive income (loss) | 550 | 1 | 551 | |||||
Stock-based compensation expense | 128 | 128 | 128 | |||||
Tax withholding related to vesting of employee stock plans | (82) | (82) | (82) | |||||
Issuance of common stock in connection with employee stock plans and other (in shares) | 13,449 | |||||||
Issuance of common stock in connection with employee stock plans and other | 26 | 26 | 26 | |||||
Repurchases of common stock (in shares) | (7,824) | |||||||
Repurchases of common stock | (120) | (120) | (120) | |||||
Cash dividends declared | (155) | (155) | (155) | |||||
Balance at beginning of period (in shares) at Jan. 31, 2022 | 1,300,259 | |||||||
Balance at end of period at Jan. 31, 2022 | 20,318 | $ 13 | 28,422 | (5,239) | (2,878) | 47 | 20,365 | |
Balance at beginning of period (in shares) at Oct. 31, 2022 | 1,281,000 | 1,281,037 | ||||||
Balance at beginning of period at Oct. 31, 2022 | $ 19,909 | 19,864 | $ 13 | 28,299 | (5,350) | (3,098) | 45 | 19,909 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net earnings | 501 | 501 | 7 | 508 | ||||
Other comprehensive income (loss) | $ (158) | (158) | (158) | (158) | ||||
Comprehensive income (loss) | 343 | 7 | 350 | |||||
Stock-based compensation expense | 140 | 140 | 140 | |||||
Tax withholding related to vesting of employee stock plans | (134) | (134) | (134) | |||||
Issuance of common stock in connection with employee stock plans and other (in shares) | 20,352 | |||||||
Issuance of common stock in connection with employee stock plans and other | 24 | 24 | 24 | |||||
Repurchases of common stock (in shares) | (4,505) | |||||||
Repurchases of common stock | (70) | (70) | (70) | |||||
Cash dividends declared | (156) | (156) | (156) | |||||
Balance at beginning of period (in shares) at Jan. 31, 2023 | 1,297,000 | 1,296,884 | ||||||
Balance at end of period at Jan. 31, 2023 | $ 20,063 | $ 20,011 | $ 13 | $ 28,259 | $ (5,005) | $ (3,256) | $ 52 | $ 20,063 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) (Parenthetical) - $ / shares | 3 Months Ended | |
Jan. 31, 2023 | Jan. 31, 2022 | |
Statement of Stockholders' Equity [Abstract] | ||
Cash dividends declared (in dollars per share) | $ 0.12 | $ 0.12 |
Overview and Summary of Signifi
Overview and Summary of Significant Accounting Policies | 3 Months Ended |
Jan. 31, 2023 | |
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 to large global enterprises and governmental entities. Basis of Presentation and Consolidation The Condensed Consolidated Financial Statements of the Company were prepared in accordance with United States ("U.S.") Generally Accepted Accounting Principles ("GAAP"). The Company’s 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. 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 January 31, 2023 and October 31, 2022, its results of operations for the three months ended January 31, 2023 and 2022, its cash flows for the three months ended January 31, 2023 and 2022, and its statements of stockholders' equity for the three months ended January 31, 2023 and 2022. The results of operations and the cash flows for the three months ended January 31, 2023 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, 2022, as filed with the U.S. Securities and Exchange Commission ("SEC") on December 8, 2022. Segment Realignment Effective at the beginning of the first quarter of fiscal 2023, in orde r to align its segment financial reporting more closely with its current business structure, the Company implemented an organizational change with the transfer of certain storage networking products, previously reported within the Storage reportable segment, to the Compute reportable segment. The Company reflected these changes to its segment information retrospectively to the earliest period presented, which primarily resulted in the realignment of net revenue and operating profit 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 There have been no 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, 2022. Recently Enacted Accounting Pronouncements Although there are new accounting pronouncements issued by the Financial Accounting Standards Board ("FASB") that the Company will adopt, as applicable, the Company does not believe any of these accounting pronouncements will have a material impact on its Condensed Consolidated Financial Statements. |
Segment Information
Segment Information | 3 Months Ended |
Jan. 31, 2023 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information Hewlett Packard Enterprise's operations are organized into six segments for financial reporting purposes: Compute, High Performance Computing & Artificial Intelligence ("HPC & AI"), 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, who is the Chief Executive Officer, 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 includes both general purpose servers for multi-workload computing and workload optimized servers to deliver the best performance and value for demanding applications. This portfolio of products includes the HPE ProLiant Compute rack and tower servers and HPE Synergy servers. Compute offerings also include operational and support services and HPE GreenLake for Compute that provides flexible Compute as-a-service ("aaS") IT infrastructure on a consumption basis through the HPE GreenLake edge-to-cloud platform. HPC & AI offers integrated systems comprised of software and hardware designed to address HPC, AI, Data Analytics, and Transaction Processing workloads for government and commercial customers globally. The solutions are segmented into HPC and Data Solutions. The HPC portfolio of products includes HPE Cray Supercomputing, HPE Apollo and Converged Edge Systems (formerly known as Edge Compute) hardware, software, and data management appliances that are often sold as supercomputing systems, including exascale supercomputers. The Data Solutions portfolio includes the mission critical compute portfolio and HPE NonStop. The mission critical compute portfolio includes the HPE Superdome Flex and HPE Integrity product lines for critical applications including large enterprise software applications and data analytics platforms. The HPE Nonstop portfolio includes high-availability, fault-tolerant, software and appliances that power applications such as credit-card transaction processing that require large scale and high availability. HPC & AI offerings also include operational and support services sold with its systems and as standalone services, and also offers most of its solutions aaS on a consumption basis through the HPE GreenLake edge-to-cloud platform. Storage provides primary storage product and service offerings, which include software-powered hyperconverged infrastructure ("HCI") with HPE Nimble Storage Disaggregated HCI and HPE SimpliVity, cloud-native primary storage with HPE Primera and HPE Alletra Storage, storage aaS with HPE GreenLake for Block Storage, disaster recovery and ransomware recovery with Zerto, backup aaS with HPE Backup and Recovery Service, and big data solutions running on HPE Alletra 4000 Data Storage Servers. Storage also provides solutions for unstructured data and analytics workloads and traditional tape, storage networking, and disk products, such as HPE MSA and HPE XP. Storage also provides data-driven intelligence with HPE InfoSight and HPE CloudPhysics along with operational and support services, software subscription services, and data infrastructure portfolio and solutions delivered aaS on a consumption basis through the HPE GreenLake edge-to-cloud platform. Intelligent Edge offers wired and wireless local area network ("LAN"), campus and data center switching, software-defined wide-area-network, network security, and associated services to enable secure connectivity for businesses of any size. The HPE Aruba Networking product portfolio includes hardware products such as Wi-Fi access points, switches and gateways. The HPE Aruba Networking software and services portfolio includes cloud-based management, network management, network access control, analytics and assurance, location services software, and professional and support services, as well as aaS and consumption models through the HPE GreenLake edge-to-cloud platform for the Intelligent Edge portfolio of products. Intelligence Edge offerings are consolidated in the Edge Service Platform which takes a cloud-native approach that provides customers a unified framework to meet their connectivity, security, and financial needs across campus, branch, data center, and remote worker environments . 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. FS also supports financial solutions for on-premise flexible consumption models, such as the HPE GreenLake edge-to-cloud platform. Corporate Investments and Other includes the Advisory and Professional Services ("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; the Communications and Media Solutions business ("CMS"), which primarily offers software and related services to the telecommunications industry; the HPE Software business which offers the HPE Ezmeral Software Container Platform and HPE Ezmeral Software Data Fabric; and Hewlett Packard Labs which is responsible for research and development. Segment Policy 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, transformation costs, disaster charges (recovery), and acquisition, disposition and other related charges. Segment Operating Results Segment net revenue and operating results were as follows: Compute HPC & AI Storage Intelligent Edge Financial Corporate Total In millions Three months ended January 31, 2023 Net revenue $ 3,367 $ 993 $ 1,168 $ 1,121 $ 867 $ 293 $ 7,809 Intersegment net revenue 89 63 19 6 6 — 183 Total segment net revenue $ 3,456 $ 1,056 $ 1,187 $ 1,127 $ 873 $ 293 $ 7,992 Segment earnings (loss) from operations $ 609 $ 1 $ 142 $ 247 $ 82 $ (55) $ 1,026 Three months ended January 31, 2022 Net revenue $ 3,004 $ 776 $ 1,116 $ 900 $ 840 $ 325 $ 6,961 Intersegment net revenue 40 14 12 1 2 — 69 Total segment net revenue $ 3,044 $ 790 $ 1,128 $ 901 $ 842 $ 325 $ 7,030 Segment earnings (loss) from operations $ 427 $ (7) $ 157 $ 157 $ 104 $ (11) $ 827 The reconciliation of segment operating results to Condensed Consolidated Statements of Earnings was as follows: For the three months ended January 31, 2023 2022 In millions Net revenue: Total segments $ 7,992 $ 7,030 Eliminations of intersegment net revenue (183) (69) Total consolidated net revenue $ 7,809 $ 6,961 Earnings before taxes: Total segment earnings from operations $ 1,026 $ 827 Unallocated corporate costs and eliminations (108) (59) Stock-based compensation expense (140) (128) Amortization of initial direct costs — (1) Amortization of intangible assets (73) (73) Transformation costs (102) (111) Disaster (charges) recovery (1) 1 Acquisition, disposition and other related charges (11) (8) Interest and other, net (25) (5) Tax indemnification and related adjustments (1) (17) Non-service net periodic benefit credit — 36 Earnings from equity interests 58 31 Total earnings before provision for taxes $ 623 $ 493 Segment Assets Hewlett Packard Enterprise allocates assets to its business segments based on the segments primarily benefiting from the assets. Total assets by segment and the reconciliation of segment assets to total assets as per Condensed Consolidated Balance Sheets were as follows: As of January 31, 2023 October 31, 2022 In millions Compute $ 15,616 $ 16,881 HPC & AI 5,718 5,997 Storage 7,093 7,484 Intelligent Edge 4,403 4,594 Financial Services 14,937 14,837 Corporate Investments and Other 874 1,110 Corporate and unallocated assets 6,950 6,220 Total assets $ 55,591 $ 57,123 Geographic Information Net revenue by geographic region was as follows: For the three months ended January 31, 2023 2022 In millions Americas: United States $ 2,885 $ 2,318 Americas excluding U.S. 569 461 Total Americas 3,454 2,779 Europe, Middle East and Africa 2,680 2,556 Asia Pacific and Japan 1,675 1,626 Total consolidated net revenue $ 7,809 $ 6,961 |
Transformations Programs
Transformations Programs | 3 Months Ended |
Jan. 31, 2023 | |
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, a new hybrid workforce model called Edge-to-Office, real estate strategies, and simplifying and evolving our product portfolio strategy. The implementation period of the primary elements of the cost optimization and prioritization plan is anticipated to be through fiscal 2023. During the remaining implementation period, 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 its offerings, business processes and business systems to improve its strategy execution. The implementation period of primary elements of the HPE Next initiative is anticipated to be through fiscal 2023. During the remaining implementation period, the Company expects to incur predominantly IT infrastructure costs for streamlining, upgrading, and simplifying back-end operations, and real estate initiatives. These costs are expected to be offset by gains from real estate sales and sublease income from inactive office space. Cost Optimization and Prioritization Plan The components of transformation costs relating to the cost optimization and prioritization plan were as follows: For the three months ended January 31, 2023 2022 In millions Program management $ 1 $ 8 IT costs 8 8 Restructuring charges 71 37 Total $ 80 $ 53 HPE Next The components of transformation costs relating to HPE Next were as follows: For the three months ended January 31, 2023 2022 In millions Program management $ — $ 3 IT costs 21 47 Restructuring charges 1 — Gain on real estate sales — (8) Impairment of real estate assets — 11 Other — 5 Total $ 22 $ 58 Restructuring Plan Restructuring activities related to the Company's employees and infrastructure under the cost optimization and prioritization plan and HPE Next plan are presented in the table below: Cost Optimization and Prioritization Plan HPE Next Plan Employee Infrastructure Employee Infrastructure In millions Liability as of October 31, 2022 $ 185 $ 122 $ 11 $ 25 Charges 53 18 — 1 Cash payments (71) (18) (4) (2) Non-cash items 12 1 1 — Liability as of January 31, 2023 $ 179 $ 123 $ 8 $ 24 Total costs incurred to date, as of January 31, 2023 $ 698 $ 501 $ 1,261 $ 261 Total expected costs to be incurred as of January 31, 2023 $ 750 $ 550 $ 1,261 $ 265 The current restructuring liability related to the transformation programs, reported in the Condensed Consolidated Balance Sheets as of January 31, 2023 and October 31, 2022, was $184 million and $191 million, respectively, in Accrued restructuring, and $25 million and $28 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 January 31, 2023 and October 31, 2022, was $125 million and $124 million, respectively. |
Retirement Benefit Plans
Retirement Benefit Plans | 3 Months Ended |
Jan. 31, 2023 | |
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: For the three months ended January 31, 2023 2022 In millions Service cost $ 13 $ 20 Interest cost (1) 93 40 Expected return on plan assets (1) (130) (118) Amortization and deferrals (1) : Actuarial loss 39 44 Prior service benefit (3) (3) Net periodic benefit (credit) cost 12 (17) Settlement loss and special termination benefits (1) — 1 Total net benefit (credit) cost $ 12 $ (16) (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 | 3 Months Ended |
Jan. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Taxes on Earnings | Taxes on Earnings Provision for Taxes For the three months ended January 31, 2023 and 2022, the Company recorded income tax expense of $122 million and income tax benefit of $20 million, respectively, which reflects an effective tax rate of 19.6% and (4.1)%, 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. For the three months ended January 31, 2023, the Company recorded $11 million of net income tax benefits related to various items discrete to the period. The amount primarily included $22 million of income tax benefits related to transformation costs, acquisition, disposition and other related charges and $13 million of net excess tax benefits related to stock-based compensation, partially offset by $23 million of net income tax charges related to tax audit settlements and changes in uncertain tax positions. For the three months ended January 31, 2022, the Company recorded $83 million of net income tax benefits related to various items discrete to the period. The amount primarily included $43 million of net income tax benefits related to the settlement of U.S. tax audit matters, $24 million of income tax benefits related to transformation costs and acquisition, disposition and other related charges, and $16 million of net income tax benefits related to the settlement of foreign tax audit matters. Uncertain Tax Positions As of January 31, 2023 and October 31, 2022, the amount of unrecognized tax benefits was $720 million and $674 million, respectively, of which up to $419 million and $386 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. The Company recognized interest expense of $1 million and interest income of $40 million for the three months ended January 31, 2023 and 2022, respectively. The Company recognized interest income in the first quarter of fiscal 2022 due to the release of reserves as a result of the effective settlement of the IRS audit for fiscal 2016. As of January 31, 2023 and October 31, 2022, the Company had accrued $82 million and $81 million, respectively, for interest and penalties in the Condensed Consolidated Balance Sheets. The Company engages in continuous discussion and negotiation with tax authorities regarding tax matters in various jurisdictions. The Internal Revenue Service is conducting an audit of the Company's fiscal 2017, 2018, and 2019 U.S. federal income tax returns. 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 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 $44 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 January 31, 2023 October 31, 2022 In millions Deferred tax assets $ 2,231 $ 2,127 Deferred tax liabilities (345) (320) Deferred tax assets net of deferred tax liabilities $ 1,886 $ 1,807 |
Balance Sheet Details
Balance Sheet Details | 3 Months Ended |
Jan. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Balance Sheet Details | Balance Sheet Details Cash, cash equivalents and restricted cash As of January 31, 2023 October 31, 2022 In millions Cash and cash equivalents $ 2,530 $ 4,163 Restricted cash (1) 314 600 Total $ 2,844 $ 4,763 (1) The Company included restricted cash in Other current assets in the accompanying Condensed Consolidated Balance Sheets. Inventory As of January 31, 2023 October 31, 2022 In millions Finished goods $ 1,999 $ 2,187 Purchased parts and fabricated assemblies 2,645 2,974 Total $ 4,644 $ 5,161 Property, Plant and Equipment As of January 31, 2023 October 31, 2022 In millions Land $ 74 $ 74 Buildings and leasehold improvements 1,524 1,503 Machinery and equipment, including equipment held for lease 10,075 9,729 Gross property, plant and equipment 11,673 11,306 Accumulated depreciation (5,683) (5,522) Net property, plant and equipment $ 5,990 $ 5,784 Warranties The Company's aggregate product warranty liability and changes thereto were as follows: For the three months ended January 31, 2023 In millions Balance at beginning of period $ 360 Charges 47 Adjustments related to pre-existing warranties (2) Settlements made (50) Balance at end of period $ 355 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 January 31, 2023 October 31, 2022 In millions Unbilled receivables $ 286 $ 245 Accounts receivable 3,942 3,881 Allowances (27) (25) Total $ 4,201 $ 4,101 The allowances for credit losses related to accounts receivable and changes during the three months ended January 31, 2023 and the year ended October 31, 2022 were as follows: As of January 31, 2023 October 31, 2022 In millions Balance at beginning of period $ 25 $ 23 Provision for credit losses 5 25 Adjustments to existing allowances, including write offs (3) (23) Balance at end of period $ 27 $ 25 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 months ended January 31, 2023 and the fiscal year ended October 31, 2022, the Company sold $1.1 billion and $4.1 billion of trade receivables, respectively. The Company recorded an obligation of $95 million and $88 million within Notes payable and short-term borrowings in its Condensed Consolidated Balance Sheets as of January 31, 2023 and October 31, 2022 respectively, related to the trade receivables sold and collected from the third-party for which the revenue recognition was deferred. Contract Liabilities and Remaining Performance Obligations As of January 31, 2023 and October 31, 2022, current deferred revenue of $3.5 billion and $3.4 billion, respectively, were recorded in Deferred revenue, and non-current deferred revenue of $3.1 billion and $3.0 billion, respectively, were recorded in Other non-current liabilities in the Condensed Consolidated Balance Sheets. During the three months ended January 31, 2023, approximately $1.2 billion of revenue was recognized relating to contract liabilities recorded as of October 31, 2022. 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. As of January 31, 2023, the aggregate amount of remaining performance obligations, or deferred revenue, was $6.6 billion. The Company expects to recognize approximately 48% of this balance over fiscal 2023 with the remainder to be recognized thereafter. Costs to Obtain a Contract As of January 31, 2023, the current and non-current portions of the capitalized costs to obtain a contract were $77 million and $126 million, respectively. As of October 31, 2022, the current and non-current portions of the capitalized costs to obtain a contract were $76 million and $124 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 months ended January 31, 2023 and 2022 the Company amortized $22 million and $20 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 | 3 Months Ended |
Jan. 31, 2023 | |
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 January 31, 2023 October 31, 2022 In millions Minimum lease payments receivable $ 9,256 $ 8,686 Unguaranteed residual value 407 380 Unearned income (804) (707) Financing receivables, gross 8,859 8,359 Allowance for credit losses (333) (325) Financing receivables, net 8,526 8,034 Less: current portion (3,726) (3,522) Amounts due after one year, net $ 4,800 $ 4,512 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 months ended January 31, 2023 and the fiscal year ended October 31, 2022, the Company sold $39 million and $183 million of financing receivables, respectively. 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 gross financing receivables, based on internal risk ratings as of January 31, 2023, presented on amortized cost basis by year of origination was as follows: As of January 31, 2023 Risk Rating Low Moderate High Fiscal Year In millions 2023 $ 352 $ 215 $ 5 2022 2,273 1,427 48 2021 1,279 1,004 44 2020 662 515 64 2019 and prior 331 485 155 Total $ 4,897 $ 3,646 $ 316 The credit risk profile of gross financing receivables, based on internal risk ratings as of October 31, 2022, presented on amortized cost basis by year of origination was as follows: As of October 31, 2022 Risk Rating Low Moderate High Fiscal Year In millions 2022 $ 1,987 $ 1,277 $ 44 2021 1,338 1,071 42 2020 756 571 67 2019 328 336 69 2018 and prior 143 234 96 Total $ 4,552 $ 3,489 $ 318 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. 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 January 31, 2023 and October 31, 2022 and the respective changes during the three and twelve months then ended were as follows. As of January 31, 2023 October 31, 2022 In millions Balance at beginning of period $ 325 $ 228 Provision for credit losses (1) 18 177 Adjustment to the existing allowance — (10) Write-offs (10) (70) Balance at end of period $ 333 $ 325 (1) Fiscal 2022 included a provision of $99 million related to expected credit losses due to the Company's exit from its Russia and Belarus businesses. Non-Accrual and Past-Due Financing Receivables The following table summarizes the aging and non-accrual status of gross financing receivables: As of January 31, 2023 October 31, 2022 In millions Billed: (1) Current and past due 1-30 days $ 396 $ 372 Past due 31-60 days 45 32 Past due 61-90 days 32 19 Past due > 90 days 148 121 Unbilled sales-type and direct-financing lease receivables 8,238 7,815 Total gross financing receivables $ 8,859 $ 8,359 Gross financing receivables on non-accrual status (2) $ 317 $ 290 Gross financing receivables 90 days past due and still accruing interest (2) $ 76 $ 72 (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. The following table presents amounts included in the Condensed Consolidated Statement of Earnings related to lessor activity: For the three months ended January 31, 2023 2022 In millions Interest income from sales-type leases and direct financing leases $ 123 $ 122 Lease income from operating leases 589 572 Total lease income $ 712 $ 694 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 Variable Interest Entity ("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 January 31, 2023 and October 31, 2022, 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 January 31, 2023 October 31, 2022 Assets held by VIE: In millions Other current assets $ 178 $ 203 Financing receivables Short-term 766 838 Long-term 931 1,085 Property, plant and equipment 1,122 1,323 Liabilities held by VIE: Notes payable and short-term borrowings, net of unamortized debt issuance costs 1,335 1,510 Long-term debt, net of unamortized debt issuance costs $ 1,128 $ 1,415 For the three months ended January 31, 2023, no financing receivables and leased equipment were transferred via securitization through the SPE. For the fiscal year ended October 31, 2022, financing receivables and leased equipment transferred via securitization through the SPE were $1.6 billion and $1.2 billion, respectively. |
Goodwill
Goodwill | 3 Months Ended |
Jan. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Goodwill Goodwill is tested for impairment at the reporting unit level. As of January 31, 2023, the Company's reporting units are consistent with the reportable segments identified in Note 2, with the exception of Corporate Investments and Other, which contains three reporting units: A & PS, CMS, and Software. The following table represents the carrying value of goodwill, by reportable segment as of January 31, 2023 and October 31, 2022. There has been no change to the accumulated impairment loss from the Company's Annual Report on Form 10-K for the fiscal year ended October 31, 2022. Compute HPC & AI Storage Intelligent Edge Financial Services Corporate Investments and Other Total In millions Balance at October 31, 2022 (1) $ 7,692 $ 2,889 $ 4,000 $ 2,555 $ 144 $ 123 $ 17,403 Goodwill acquired during the period — 18 — — — — 18 Balance at January 31, 2023 $ 7,692 $ 2,907 $ 4,000 $ 2,555 $ 144 $ 123 $ 17,421 (1) As a result of the organizational realignments which were effective as of November 1, 2022, (described in Note 1, "Overview and Summary of Significant Accounting Policies"), $160 million of goodwill was reallocated from the Storage segment to the Compute segment as of the beginning of the period using a relative fair value approach. The Company evaluates 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. As of the annual test date in fiscal 2022, the HPC & AI reporting unit had goodwill of $2.9 billion and an excess of fair value over carrying value of net assets of 0%. The HPC & AI reporting unit relies significantly on the income approach which estimates the fair value based on the present value of future cash flows. The HPC & AI business is facing challenges primarily related to supply chain constraints and other operational challenges impacting the Company’s ability to achieve certain customer acceptance milestones required for revenue recognition and resulting cost increases associated with fulfilling contracts over longer than originally anticipated timelines. The Company currently believes these challenges will be successfully addressed as the supply chain constraints are improving. If the global macroeconomic or geopolitical conditions worsen, projected revenue growth rates or operating margins decline, weighted average cost of capital increases, or if the Company has significant or sustained decline in its stock price, it is possible its estimates about the HPC & AI reporting unit's ability to |
Fair Value
Fair Value | 3 Months Ended |
Jan. 31, 2023 | |
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 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. The following table presents the Company's assets and liabilities that are measured at fair value on a recurring basis: As of January 31, 2023 As of October 31, 2022 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 $ — $ 631 $ — $ 631 $ — $ 1,516 $ — $ 1,516 Money market funds 501 — — 501 744 — — 744 Equity securities — — 126 126 — — 126 126 Foreign bonds — 104 — 104 — 91 — 91 Other debt securities — — 33 33 — — 33 33 Derivative Instruments: Foreign exchange contracts — 276 — 276 — 840 — 840 Other derivatives — 6 — 6 — 2 — 2 Total assets $ 501 $ 1,017 $ 159 $ 1,677 $ 744 $ 2,449 $ 159 $ 3,352 Liabilities Derivative Instruments: Interest rate contracts $ — $ 137 $ — $ 137 $ — $ 178 $ — $ 178 Foreign exchange contracts — 329 — 329 — 128 — 128 Other derivatives — — — — — 1 — 1 Total liabilities $ — $ 466 $ — $ 466 $ — $ 307 $ — $ 307 Other Fair Value Disclosures Short-Term and Long-Term Debt: As of January 31, 2023 and October 31, 2022, the estimated fair value of the Company's short-term and long-term debt was $13.0 billion and $12.2 billion, respectively. As of January 31, 2023 and October 31, 2022, the carrying value of the Company's short-term and long-term debt was $12.9 billion and $12.5 billion, respectively. If measured at fair value in the Condensed 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. For the three months ended January 31, 2023, the Company recognized an impairment of $10 million on these investments. The Company did not recognize any impairments on these equity investments during the three months ended January 31, 2022. If measured at fair value in the Condensed Consolidated Balance Sheets, these would generally be classified in Level 3 of the fair value hierarchy. Other financial instruments, including accounts receivable and accounts payable, are carried at cost, which approximates their fair value due to their short-term nature. 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 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. |
Financial Instruments
Financial Instruments | 3 Months Ended |
Jan. 31, 2023 | |
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 January 31, 2023 As of October 31, 2022 Cost Gross Unrealized Gains Fair Cost Gross Unrealized Gains (Losses) Fair In millions Cash Equivalents: Time deposits $ 631 $ — $ 631 $ 1,516 $ — $ 1,516 Money market funds 501 — 501 744 — 744 Total cash equivalents 1,132 — 1,132 2,260 — 2,260 Available-for-Sale Debt Investments: Foreign bonds 102 2 104 93 (2) 91 Other debt securities 31 2 33 32 1 33 Total available-for-sale debt investments 133 4 137 125 (1) 124 Total cash equivalents and available-for-sale debt investments $ 1,265 $ 4 $ 1,269 $ 2,385 $ (1) $ 2,384 As of January 31, 2023 and October 31, 2022, the carrying amount of cash equivalents approximated fair value due to the short period of time to maturity. Time deposits were primarily issued by institu tions outside o f the U.S. as of January 31, 2023 and October 31, 2022. 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: As of January 31, 2023 Amortized Cost Fair Value In millions Due in one year $ 19 $ 19 Due in more than five years 114 118 Total $ 133 $ 137 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 was $160 million and $175 million as of January 31, 2023 and October 31, 2022, respectively. For the three months ended January 31, 2023, the Company recognized an impairment of $10 million on these investments. The Company did not recognize any impairments on these equity investments during the three months ended January 31, 2022. The carrying amount of those non-marketable equity investments accounted for under the fair value option was $126 million as of January 31, 2023 and October 31, 2022. During the three months ended January 31, 2022, the Company recorded an unrealized gain of $59 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. The carrying amount of these investments was $2.2 billion as of January 31, 2023 and October 31, 2022. For the three months ended January 31, 2023 and 2022, the Company recorded earnings from equity interests of $58 million and $31 million, respectively, on these investments. 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 January 31, 2023 As of October 31, 2022 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 $ 2,500 $ — $ — $ — $ 137 $ 2,500 $ — $ — $ — $ 178 Cash flow hedges: Foreign currency contracts 7,798 119 96 168 47 7,662 420 246 25 13 Net investment hedges: Foreign currency contracts 1,896 23 25 35 24 1,883 60 74 12 13 Total derivatives designated as hedging instruments 12,194 142 121 203 208 12,045 480 320 37 204 Derivatives not designated as hedging instruments Foreign currency contracts 5,216 10 3 43 12 7,780 36 4 53 12 Other derivatives 110 6 — — — 95 2 — 1 — Total derivatives not designated as hedging instruments 5,326 16 3 43 12 7,875 38 4 54 12 Total derivatives $ 17,520 $ 158 $ 124 $ 246 $ 220 $ 19,920 $ 518 $ 324 $ 91 $ 216 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 January 31, 2023 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 $ 282 $ — $ 282 $ 128 $ 140 (1) $ 14 Derivative liabilities $ 466 $ — $ 466 $ 128 $ 319 (2) $ 19 As of October 31, 2022 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 $ 842 $ — $ 842 $ 199 $ 508 (1) $ 135 Derivative liabilities $ 307 $ — $ 307 $ 199 $ 113 (2) $ (5) (1) Represents the cash collateral posted by counterparties as of the respective reporting date for the Company's asset position, net of derivative amounts that could be offset, as of, generally, two business days prior to the respective reporting date. (2) Represents the collateral posted by the Company in cash or through the re-use of counterparty cash collateral as of the respective reporting date for the Company's liability position, net of derivative amounts that could be offset, as of, generally, two business days prior to the respective reporting date. As of January 31, 2023, of the $319 million of collateral posted, $313 million was in cash and $6 million was through the re-use of counterparty collateral. As of October 31, 2022, the entire amount of the collateral posted of $113 million was through the 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 liabilities Cumulative amount of fair value hedging adjustment included in the carrying amount of the hedged assets/ (liabilities) As of As of January 31, 2023 October 31, 2022 January 31, 2023 October 31, 2022 In millions In millions Long-term debt $ (2,358) $ (2,317) $ 137 $ 178 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 For the three months ended January 31, 2023 2022 In millions Derivatives in Cash Flow Hedging relationship Foreign exchange contracts $ (518) $ 215 Derivatives in Net Investment Hedging relationship Foreign exchange contracts (107) 11 Total $ (625) $ 226 As of January 31, 2023, the Company expects to reclassify an estimated net accumulated other comprehensive loss of approximately $104 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 For the three months ended January 31, 2023 2022 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 $ 7,809 $ (25) $ 6,961 $ (5) Gains (losses) on derivatives in fair value hedging relationships Interest rate contracts Hedged items — (41) — 54 Derivatives designated as hedging instruments — 41 — (54) Gains (losses) on derivatives in cash flow hedging relationships Foreign exchange contracts Amount of gains (losses) reclassified from accumulated other comprehensive income into income 50 (297) 65 136 Gains (losses) on derivatives not designated as hedging instruments Foreign exchange contracts — (194) — (40) Other derivatives — — — (9) Total gains (losses) $ 50 $ (491) $ 65 $ 87 |
Borrowings
Borrowings | 3 Months Ended |
Jan. 31, 2023 | |
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 January 31, 2023 October 31, 2022 Current portion of long-term debt (1) $ 3,727 $ 3,876 Commercial paper 1,439 542 Notes payable to banks, lines of credit and other 183 194 Total notes payable and short-term borrowings 5,349 4,612 Long-term debt 7,577 7,853 Total $ 12,926 $ 12,465 (1) As of January 31, 2023, the Current portion of long-term debt, net of discount and issuance costs, includes $1.3 billion associated with the asset-backed debt securities issued by the Company. Commercial Paper Hewlett Packard Enterprise maintains two commercial paper programs, "the Parent Programs", and a wholly-owned subsidiary maintains a third program. The Parent Program in the U.S. provides for the issuance of U.S. dollar-denominated commercial paper up to a maximum aggregate principal amount of $4.75 billion. The Parent Program outside the U.S. provides for the issuance of commercial paper denominated in U.S. dollars, euros, or British pounds up to a maximum aggregate principal amount of $3.0 billion or the equivalent in those alternative currencies. The combined aggregate principal amount of commercial paper outstanding under those two programs at any one time cannot exceed the $4.75 billion as authorized by Hewlett Packard Enterprise's Board of Directors. In addition, the Hewlett Packard Enterprise subsidiary's euro Commercial Paper/Certificate of Deposit Program provides for the issuance of commercial paper in various currencies of up to a maximum aggregate principal amount of $1.0 billion. As of January 31, 2023, $759 million was outstanding under the Parent Programs. As of October 31, 2022, no borrowings were outstanding under the Parent Programs. As of January 31, 2023 and October 31, 2022, $680 million and $542 million, respectively, were outstanding under the subsidiary’s program. Revolving Credit Facility The Company maintains a senior unsecured revolving credit facility that was entered into in December 2021 with an aggregate lending commitment of $4.75 billion for a period of five years. As of January 31, 2023 and October 31, 2022, no borrowings were outstanding under this credit facility. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Jan. 31, 2023 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders' Equity The components of accumulated other comprehensive loss, net of taxes as of January 31, 2023, and changes during the three months ended January 31, 2023 were as follows: Net unrealized Net unrealized Unrealized Cumulative Accumulated In millions Balance at beginning of period $ (1) $ 109 $ (2,596) $ (610) $ (3,098) Other comprehensive income (loss) before reclassifications 5 (518) — 20 (493) Reclassifications of losses into earnings — 247 35 — 282 Tax benefit (provision) — 55 (3) 1 53 Balance at end of period $ 4 $ (107) $ (2,564) $ (589) $ (3,256) The components of accumulated other comprehensive loss, net of taxes as of January 31, 2022, and changes during the three months ended January 31, 2022 were as follows: Net unrealized Net unrealized Unrealized Cumulative Accumulated In millions Balance at beginning of period $ 15 $ 81 $ (2,545) $ (466) $ (2,915) Other comprehensive (loss) income before reclassifications (1) 215 6 (11) 209 Reclassifications of (gains) losses into earnings — (201) 42 — (159) Tax provision — (2) (11) — (13) Balance at end of period $ 14 $ 93 $ (2,508) $ (477) $ (2,878) Share Repurchase Program For the three months ended January 31, 2023, the Company repurchased and settled a total of 4.7 million shares under its share repurchase program through open market repurchases, which included 0.3 million shares that were unsettled open market repurchases as of October 31, 2022. Additionally, as of January 31, 2023, the Company had unsettled open market repurchases |
Net Earnings Per Share
Net Earnings Per Share | 3 Months Ended |
Jan. 31, 2023 | |
Earnings Per Share [Abstract] | |
Net Earnings Per Share | Net Earnings Per Share The Company calculates basic net earnings per share ("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: For the three months ended January 31, 2023 2022 In millions, except per share amounts Numerator: Net earnings $ 501 $ 513 Denominator: Weighted-average shares used to compute basic net EPS 1,298 1,304 Dilutive effect of employee stock plans 17 21 Weighted-average shares used to compute diluted net EPS 1,315 1,325 Net earnings per share: Basic $ 0.39 $ 0.39 Diluted $ 0.38 $ 0.39 Anti-dilutive weighted-average stock awards (1) 9 1 (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, Contingencies, and
Litigation, Contingencies, and Commitments | 3 Months Ended |
Jan. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Litigation, Contingencies, and Commitments | Litigation, Contingencies, and Commitments Litigation 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 (the "Separation and Distribution Agreement") entered into in connection with Hewlett Packard Enterprise's spin-off from HP Inc. (formerly known as "Hewlett-Packard Company") (the "Separation"), Hewlett Packard Enterprise and HP Inc. 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 January 31, 2023, 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. The parties have reached an agreement to resolve this litigation. The terms of the class settlement are reflected in Plaintiff’s Motion for Preliminary Approval of Class Action Settlement and Certification of Settlement Class, which was filed with the Court on September 26, 2022. On November 3, 2022, the Court granted Plaintiff’s motion and preliminarily approved the terms of the class settlement, which defines the settlement class as all “[w]omen actively employed in California by Defendant at any point from November 1, 2015 through the date of Preliminary Approval” who were employed in a covered job code. The settlement class excludes certain individuals, including those who previously executed an arbitration agreement with HPE or an agreement that resulted in a release or waiver of claims. The hearing on final approval of the class settlement is scheduled for April 27, 2023. 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. The Court-approved notice was issued to potential class members and the opt-in period is now closed. 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. Trial began on May 23, 2022. On June 15, 2022, the jury returned its verdict, awarding $30 million in compensatory damages to Oracle and rejecting Oracle’s request for punitive damages. Judgment has not yet been entered by the Court as the parties are engaged in post-verdict motion practice on multiple issues, including HPE’s Motion for Judgment as a Matter of Law and Oracle’s request for an award of prejudgment interest and attorneys’ fees. The parties have since reached an agreement to resolve this dispute. Pursuant to the terms of the settlement, the case has been dismissed, and the matter is 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 District of Delaware action has been stayed pending resolution of the ITC action. The evidentiary hearing before the ITC has been completed. On December 7, 2021, the Administrative Law Judge issued his initial determination finding no violation of section 337 of the Tariff Act. On May 3, 2022, the ITC issued its Notice of Final Determination, affirming the initial determination and terminating the investigation. On June 18, 2022, Q3 Networking filed a petition for review of the ITC ruling with the United States Court of Appeals for the Federal Circuit. 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 the environment, including laws addressing the discharge of pollutants into the air and water; the management, movement, and disposal of hazardous substances and wastes; the clean-up of contaminated sites; product safety and compliance; 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, including those related to addressing climate change and other environmental related issues, or if its products become non-compliant with such 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. Guarantees In the ordinary course of business, the Company may issue performance guarantees to certain of its clients, customers, and other parties pursuant to which the Company has guaranteed the performance obligations of third parties. Some of those guarantees may be backed by standby letters of credit or surety bonds. In general, the Company would be obligated to perform over the term of the guarantee in the event a specified triggering event occurs as defined by the guarantee. The Company believes the likelihood of having to perform under a material guarantee is remote. The Company has entered into service contracts with certain of its clients that are supported by financing arrangements. If a service contract is terminated as a result of the Company's non-performance under the contract or failure to comply with the terms of the financing arrangement, the Company could, under certain circumstances, be required to acquire certain assets related to the service contract. The Company believes the likelihood of having to acquire a material amount of assets under these arrangements is remote. Indemnifications In the ordinary course of business, the Company enters into contractual arrangements under which the Company may agree to indemnify a third party to such arrangement from any losses incurred relating to the services they perform on behalf of the Company or for losses arising from certain events as defined within the particular contract, which may include, for example, litigation or claims relating to past performance. The Company also provides indemnifications to certain vendors and customers against claims of IP infringement made by third parties arising from the use by such vendors and customers of the Company's software products and support services and certain other matters. Some indemnifications may not be subject to maximum loss clauses. Historically, payments made related to these indemnifications have been immaterial. |
Equity Method Investments
Equity Method Investments | 3 Months Ended |
Jan. 31, 2023 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity Method Investments | Equity Method InvestmentsPursuant to the Shareholders' Agreement among the Company, Unisplendor International Technology Limited ("UNIS"), and H3C Technologies Co Limited ("H3C") dated as of May 1, 2016, as amended from time to time, and most recently on October 28, 2022, the Company delivered a notice to UNIS on December 30, 2022, to exercise its right to put to UNIS, for cash consideration, all of the H3C shares held by the Company, which represent 49% of the total issued share capital of H3C, at a price per share of 15.0 times the last twelve months’ post-tax profit of H3C (measured as of the period ending April 30, 2022) divided by the total number of H3C shares outstanding as of December 30, 2022. The determination of the purchase price remains subject to agreement among the parties, taking into account certain adjustments to the post-tax profit of H3C pursuant to the terms of the Shareholders’ Agreement and the availability of the necessary information to make such determination. The disposition is also subject to obtaining required regulatory approvals. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Jan. 31, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent EventsSubsequent to January 31, 2023, the Company announced and entered into definitive agreements to acquire Athonet and Axis Security. Athonet is a private cellular network technology provider that delivers mobile core networks to enterprises and communication service providers. Axis Security is a cloud security provider, which will allow the Company to expand its edge-to-cloud security capabilities by offering a Security Access Services Edge solution. The total expected cash purchase price of the acquisitions is approximately $490 million, subject to normal working capital and other closing adjustments. The Company expects both transactions to close during fiscal 2023. |
Overview and Summary of Signi_2
Overview and Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Jan. 31, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Consolidation | Basis of Presentation and Consolidation The Condensed Consolidated Financial Statements of the Company were prepared in accordance with United States ("U.S.") Generally Accepted Accounting Principles ("GAAP"). The Company’s 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. 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 January 31, 2023 and October 31, 2022, its results of operations for the three months ended January 31, 2023 and 2022, its cash flows for the three months ended January 31, 2023 and 2022, and its statements of stockholders' equity for the three months ended January 31, 2023 and 2022. The results of operations and the cash flows for the three months ended January 31, 2023 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, 2022, as filed with the U.S. Securities and Exchange Commission ("SEC") on December 8, 2022. |
Segment Realignment | Segment Realignment Effective at the beginning of the first quarter of fiscal 2023, in orde r to align its segment financial reporting more closely with its current business structure, the Company implemented an organizational change with the transfer of certain storage networking products, previously reported within the Storage reportable segment, to the Compute reportable segment. The Company reflected these changes to its segment information retrospectively to the earliest period presented, which primarily resulted in the realignment of net revenue and operating profit 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. Segment Policy 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, transformation costs, disaster charges (recovery), and acquisition, disposition and other related charges. |
Significant Accounting Policies | Significant Accounting Policies There have been no 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, 2022. |
Recently Enacted Accounting Pronouncements | Recently Enacted Accounting Pronouncements Although there are new accounting pronouncements issued by the Financial Accounting Standards Board ("FASB") that the Company will adopt, as applicable, the Company does not believe any of these accounting pronouncements will have a material impact on its Condensed Consolidated Financial Statements. |
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 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. |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Jan. 31, 2023 | |
Segment Reporting [Abstract] | |
Segment Operating Results from Continuing Operations | Segment Operating Results Segment net revenue and operating results were as follows: Compute HPC & AI Storage Intelligent Edge Financial Corporate Total In millions Three months ended January 31, 2023 Net revenue $ 3,367 $ 993 $ 1,168 $ 1,121 $ 867 $ 293 $ 7,809 Intersegment net revenue 89 63 19 6 6 — 183 Total segment net revenue $ 3,456 $ 1,056 $ 1,187 $ 1,127 $ 873 $ 293 $ 7,992 Segment earnings (loss) from operations $ 609 $ 1 $ 142 $ 247 $ 82 $ (55) $ 1,026 Three months ended January 31, 2022 Net revenue $ 3,004 $ 776 $ 1,116 $ 900 $ 840 $ 325 $ 6,961 Intersegment net revenue 40 14 12 1 2 — 69 Total segment net revenue $ 3,044 $ 790 $ 1,128 $ 901 $ 842 $ 325 $ 7,030 Segment earnings (loss) from operations $ 427 $ (7) $ 157 $ 157 $ 104 $ (11) $ 827 |
Reconciliation of Segment Operating Results | The reconciliation of segment operating results to Condensed Consolidated Statements of Earnings was as follows: For the three months ended January 31, 2023 2022 In millions Net revenue: Total segments $ 7,992 $ 7,030 Eliminations of intersegment net revenue (183) (69) Total consolidated net revenue $ 7,809 $ 6,961 Earnings before taxes: Total segment earnings from operations $ 1,026 $ 827 Unallocated corporate costs and eliminations (108) (59) Stock-based compensation expense (140) (128) Amortization of initial direct costs — (1) Amortization of intangible assets (73) (73) Transformation costs (102) (111) Disaster (charges) recovery (1) 1 Acquisition, disposition and other related charges (11) (8) Interest and other, net (25) (5) Tax indemnification and related adjustments (1) (17) Non-service net periodic benefit credit — 36 Earnings from equity interests 58 31 Total earnings before provision for taxes $ 623 $ 493 |
Schedule of Reconciliation of Assets from Segments to Consolidated | Hewlett Packard Enterprise allocates assets to its business segments based on the segments primarily benefiting from the assets. Total assets by segment and the reconciliation of segment assets to total assets as per Condensed Consolidated Balance Sheets were as follows: As of January 31, 2023 October 31, 2022 In millions Compute $ 15,616 $ 16,881 HPC & AI 5,718 5,997 Storage 7,093 7,484 Intelligent Edge 4,403 4,594 Financial Services 14,937 14,837 Corporate Investments and Other 874 1,110 Corporate and unallocated assets 6,950 6,220 Total assets $ 55,591 $ 57,123 |
Net Revenue by Geographic Areas | Net revenue by geographic region was as follows: For the three months ended January 31, 2023 2022 In millions Americas: United States $ 2,885 $ 2,318 Americas excluding U.S. 569 461 Total Americas 3,454 2,779 Europe, Middle East and Africa 2,680 2,556 Asia Pacific and Japan 1,675 1,626 Total consolidated net revenue $ 7,809 $ 6,961 |
Transformation Programs (Tables
Transformation Programs (Tables) | 3 Months Ended |
Jan. 31, 2023 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Related Costs | The components of transformation costs relating to the cost optimization and prioritization plan were as follows: For the three months ended January 31, 2023 2022 In millions Program management $ 1 $ 8 IT costs 8 8 Restructuring charges 71 37 Total $ 80 $ 53 The components of transformation costs relating to HPE Next were as follows: For the three months ended January 31, 2023 2022 In millions Program management $ — $ 3 IT costs 21 47 Restructuring charges 1 — Gain on real estate sales — (8) Impairment of real estate assets — 11 Other — 5 Total $ 22 $ 58 |
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 are presented in the table below: Cost Optimization and Prioritization Plan HPE Next Plan Employee Infrastructure Employee Infrastructure In millions Liability as of October 31, 2022 $ 185 $ 122 $ 11 $ 25 Charges 53 18 — 1 Cash payments (71) (18) (4) (2) Non-cash items 12 1 1 — Liability as of January 31, 2023 $ 179 $ 123 $ 8 $ 24 Total costs incurred to date, as of January 31, 2023 $ 698 $ 501 $ 1,261 $ 261 Total expected costs to be incurred as of January 31, 2023 $ 750 $ 550 $ 1,261 $ 265 |
Retirement Benefit Plans (Table
Retirement Benefit Plans (Tables) | 3 Months Ended |
Jan. 31, 2023 | |
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: For the three months ended January 31, 2023 2022 In millions Service cost $ 13 $ 20 Interest cost (1) 93 40 Expected return on plan assets (1) (130) (118) Amortization and deferrals (1) : Actuarial loss 39 44 Prior service benefit (3) (3) Net periodic benefit (credit) cost 12 (17) Settlement loss and special termination benefits (1) — 1 Total net benefit (credit) cost $ 12 $ (16) (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) | 3 Months Ended |
Jan. 31, 2023 | |
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 January 31, 2023 October 31, 2022 In millions Deferred tax assets $ 2,231 $ 2,127 Deferred tax liabilities (345) (320) Deferred tax assets net of deferred tax liabilities $ 1,886 $ 1,807 |
Balance Sheet Details (Tables)
Balance Sheet Details (Tables) | 3 Months Ended |
Jan. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Cash and Cash Equivalents | Cash, cash equivalents and restricted cash As of January 31, 2023 October 31, 2022 In millions Cash and cash equivalents $ 2,530 $ 4,163 Restricted cash (1) 314 600 Total $ 2,844 $ 4,763 (1) The Company included restricted cash in Other current assets in the accompanying Condensed Consolidated Balance Sheets. |
Schedule of Inventory | Inventory As of January 31, 2023 October 31, 2022 In millions Finished goods $ 1,999 $ 2,187 Purchased parts and fabricated assemblies 2,645 2,974 Total $ 4,644 $ 5,161 |
Schedule of Property, Plant and Equipment | Property, Plant and Equipment As of January 31, 2023 October 31, 2022 In millions Land $ 74 $ 74 Buildings and leasehold improvements 1,524 1,503 Machinery and equipment, including equipment held for lease 10,075 9,729 Gross property, plant and equipment 11,673 11,306 Accumulated depreciation (5,683) (5,522) Net property, plant and equipment $ 5,990 $ 5,784 |
Changes in Aggregate Product Warranty Liabilities | The Company's aggregate product warranty liability and changes thereto were as follows: For the three months ended January 31, 2023 In millions Balance at beginning of period $ 360 Charges 47 Adjustments related to pre-existing warranties (2) Settlements made (50) Balance at end of period $ 355 |
Summary of Accounts Receivable, Net | A summary of accounts receivable, net, including unbilled receivables was as follows: As of January 31, 2023 October 31, 2022 In millions Unbilled receivables $ 286 $ 245 Accounts receivable 3,942 3,881 Allowances (27) (25) Total $ 4,201 $ 4,101 |
Schedule of Trade Receivables Sold and Cash Received | The allowances for credit losses related to accounts receivable and changes during the three months ended January 31, 2023 and the year ended October 31, 2022 were as follows: As of January 31, 2023 October 31, 2022 In millions Balance at beginning of period $ 25 $ 23 Provision for credit losses 5 25 Adjustments to existing allowances, including write offs (3) (23) Balance at end of period $ 27 $ 25 |
Accounting for Leases as a Le_2
Accounting for Leases as a Lessor (Tables) | 3 Months Ended |
Jan. 31, 2023 | |
Leases [Abstract] | |
Components of Financing Receivables | The components of financing receivables were as follows: As of January 31, 2023 October 31, 2022 In millions Minimum lease payments receivable $ 9,256 $ 8,686 Unguaranteed residual value 407 380 Unearned income (804) (707) Financing receivables, gross 8,859 8,359 Allowance for credit losses (333) (325) Financing receivables, net 8,526 8,034 Less: current portion (3,726) (3,522) Amounts due after one year, net $ 4,800 $ 4,512 |
Credit Risk Profile of Gross Financing Receivables | The credit risk profile of gross financing receivables, based on internal risk ratings as of January 31, 2023, presented on amortized cost basis by year of origination was as follows: As of January 31, 2023 Risk Rating Low Moderate High Fiscal Year In millions 2023 $ 352 $ 215 $ 5 2022 2,273 1,427 48 2021 1,279 1,004 44 2020 662 515 64 2019 and prior 331 485 155 Total $ 4,897 $ 3,646 $ 316 The credit risk profile of gross financing receivables, based on internal risk ratings as of October 31, 2022, presented on amortized cost basis by year of origination was as follows: As of October 31, 2022 Risk Rating Low Moderate High Fiscal Year In millions 2022 $ 1,987 $ 1,277 $ 44 2021 1,338 1,071 42 2020 756 571 67 2019 328 336 69 2018 and prior 143 234 96 Total $ 4,552 $ 3,489 $ 318 |
Allowance for Doubtful Accounts for Financing Receivables | The allowance for credit losses for financing receivables as of January 31, 2023 and October 31, 2022 and the respective changes during the three and twelve months then ended were as follows. As of January 31, 2023 October 31, 2022 In millions Balance at beginning of period $ 325 $ 228 Provision for credit losses (1) 18 177 Adjustment to the existing allowance — (10) Write-offs (10) (70) Balance at end of period $ 333 $ 325 (1) Fiscal 2022 included a provision of $99 million related to expected credit losses due to the Company's exit from its Russia and Belarus businesses. |
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 January 31, 2023 October 31, 2022 In millions Billed: (1) Current and past due 1-30 days $ 396 $ 372 Past due 31-60 days 45 32 Past due 61-90 days 32 19 Past due > 90 days 148 121 Unbilled sales-type and direct-financing lease receivables 8,238 7,815 Total gross financing receivables $ 8,859 $ 8,359 Gross financing receivables on non-accrual status (2) $ 317 $ 290 Gross financing receivables 90 days past due and still accruing interest (2) $ 76 $ 72 (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. |
Lessor Lease Activity | The following table presents amounts included in the Condensed Consolidated Statement of Earnings related to lessor activity: For the three months ended January 31, 2023 2022 In millions Interest income from sales-type leases and direct financing leases $ 123 $ 122 Lease income from operating leases 589 572 Total lease income $ 712 $ 694 |
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 January 31, 2023 October 31, 2022 Assets held by VIE: In millions Other current assets $ 178 $ 203 Financing receivables Short-term 766 838 Long-term 931 1,085 Property, plant and equipment 1,122 1,323 Liabilities held by VIE: Notes payable and short-term borrowings, net of unamortized debt issuance costs 1,335 1,510 Long-term debt, net of unamortized debt issuance costs $ 1,128 $ 1,415 |
Goodwill (Tables)
Goodwill (Tables) | 3 Months Ended |
Jan. 31, 2023 | |
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 January 31, 2023 and October 31, 2022. There has been no change to the accumulated impairment loss from the Company's Annual Report on Form 10-K for the fiscal year ended October 31, 2022. Compute HPC & AI Storage Intelligent Edge Financial Services Corporate Investments and Other Total In millions Balance at October 31, 2022 (1) $ 7,692 $ 2,889 $ 4,000 $ 2,555 $ 144 $ 123 $ 17,403 Goodwill acquired during the period — 18 — — — — 18 Balance at January 31, 2023 $ 7,692 $ 2,907 $ 4,000 $ 2,555 $ 144 $ 123 $ 17,421 (1) As a result of the organizational realignments which were effective as of November 1, 2022, (described in Note 1, "Overview and Summary of Significant Accounting Policies"), $160 million of goodwill was reallocated from the Storage segment to the Compute segment as of the beginning of the period using a relative fair value approach. |
Fair Value (Tables)
Fair Value (Tables) | 3 Months Ended |
Jan. 31, 2023 | |
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 January 31, 2023 As of October 31, 2022 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 $ — $ 631 $ — $ 631 $ — $ 1,516 $ — $ 1,516 Money market funds 501 — — 501 744 — — 744 Equity securities — — 126 126 — — 126 126 Foreign bonds — 104 — 104 — 91 — 91 Other debt securities — — 33 33 — — 33 33 Derivative Instruments: Foreign exchange contracts — 276 — 276 — 840 — 840 Other derivatives — 6 — 6 — 2 — 2 Total assets $ 501 $ 1,017 $ 159 $ 1,677 $ 744 $ 2,449 $ 159 $ 3,352 Liabilities Derivative Instruments: Interest rate contracts $ — $ 137 $ — $ 137 $ — $ 178 $ — $ 178 Foreign exchange contracts — 329 — 329 — 128 — 128 Other derivatives — — — — — 1 — 1 Total liabilities $ — $ 466 $ — $ 466 $ — $ 307 $ — $ 307 |
Financial Instruments (Tables)
Financial Instruments (Tables) | 3 Months Ended |
Jan. 31, 2023 | |
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 January 31, 2023 As of October 31, 2022 Cost Gross Unrealized Gains Fair Cost Gross Unrealized Gains (Losses) Fair In millions Cash Equivalents: Time deposits $ 631 $ — $ 631 $ 1,516 $ — $ 1,516 Money market funds 501 — 501 744 — 744 Total cash equivalents 1,132 — 1,132 2,260 — 2,260 Available-for-Sale Debt Investments: Foreign bonds 102 2 104 93 (2) 91 Other debt securities 31 2 33 32 1 33 Total available-for-sale debt investments 133 4 137 125 (1) 124 Total cash equivalents and available-for-sale debt investments $ 1,265 $ 4 $ 1,269 $ 2,385 $ (1) $ 2,384 |
Contractual Maturities of Investments in Available-for-Sale Debt Securities | Contractual maturities of available-for-sale debt investments were as follows: As of January 31, 2023 Amortized Cost Fair Value In millions Due in one year $ 19 $ 19 Due in more than five years 114 118 Total $ 133 $ 137 |
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 January 31, 2023 As of October 31, 2022 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 $ 2,500 $ — $ — $ — $ 137 $ 2,500 $ — $ — $ — $ 178 Cash flow hedges: Foreign currency contracts 7,798 119 96 168 47 7,662 420 246 25 13 Net investment hedges: Foreign currency contracts 1,896 23 25 35 24 1,883 60 74 12 13 Total derivatives designated as hedging instruments 12,194 142 121 203 208 12,045 480 320 37 204 Derivatives not designated as hedging instruments Foreign currency contracts 5,216 10 3 43 12 7,780 36 4 53 12 Other derivatives 110 6 — — — 95 2 — 1 — Total derivatives not designated as hedging instruments 5,326 16 3 43 12 7,875 38 4 54 12 Total derivatives $ 17,520 $ 158 $ 124 $ 246 $ 220 $ 19,920 $ 518 $ 324 $ 91 $ 216 |
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 January 31, 2023 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 $ 282 $ — $ 282 $ 128 $ 140 (1) $ 14 Derivative liabilities $ 466 $ — $ 466 $ 128 $ 319 (2) $ 19 As of October 31, 2022 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 $ 842 $ — $ 842 $ 199 $ 508 (1) $ 135 Derivative liabilities $ 307 $ — $ 307 $ 199 $ 113 (2) $ (5) (1) Represents the cash collateral posted by counterparties as of the respective reporting date for the Company's asset position, net of derivative amounts that could be offset, as of, generally, two business days prior to the respective reporting date. |
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 January 31, 2023 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 $ 282 $ — $ 282 $ 128 $ 140 (1) $ 14 Derivative liabilities $ 466 $ — $ 466 $ 128 $ 319 (2) $ 19 As of October 31, 2022 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 $ 842 $ — $ 842 $ 199 $ 508 (1) $ 135 Derivative liabilities $ 307 $ — $ 307 $ 199 $ 113 (2) $ (5) (1) Represents the cash collateral posted by counterparties as of the respective reporting date for the Company's asset position, net of derivative amounts that could be offset, as of, generally, two business days prior to the respective reporting date. |
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 liabilities Cumulative amount of fair value hedging adjustment included in the carrying amount of the hedged assets/ (liabilities) As of As of January 31, 2023 October 31, 2022 January 31, 2023 October 31, 2022 In millions In millions Long-term debt $ (2,358) $ (2,317) $ 137 $ 178 |
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 For the three months ended January 31, 2023 2022 In millions Derivatives in Cash Flow Hedging relationship Foreign exchange contracts $ (518) $ 215 Derivatives in Net Investment Hedging relationship Foreign exchange contracts (107) 11 Total $ (625) $ 226 |
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 For the three months ended January 31, 2023 2022 In millions Derivatives in Cash Flow Hedging relationship Foreign exchange contracts $ (518) $ 215 Derivatives in Net Investment Hedging relationship Foreign exchange contracts (107) 11 Total $ (625) $ 226 |
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 For the three months ended January 31, 2023 2022 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 $ 7,809 $ (25) $ 6,961 $ (5) Gains (losses) on derivatives in fair value hedging relationships Interest rate contracts Hedged items — (41) — 54 Derivatives designated as hedging instruments — 41 — (54) Gains (losses) on derivatives in cash flow hedging relationships Foreign exchange contracts Amount of gains (losses) reclassified from accumulated other comprehensive income into income 50 (297) 65 136 Gains (losses) on derivatives not designated as hedging instruments Foreign exchange contracts — (194) — (40) Other derivatives — — — (9) Total gains (losses) $ 50 $ (491) $ 65 $ 87 |
Borrowings (Tables)
Borrowings (Tables) | 3 Months Ended |
Jan. 31, 2023 | |
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 January 31, 2023 October 31, 2022 Current portion of long-term debt (1) $ 3,727 $ 3,876 Commercial paper 1,439 542 Notes payable to banks, lines of credit and other 183 194 Total notes payable and short-term borrowings 5,349 4,612 Long-term debt 7,577 7,853 Total $ 12,926 $ 12,465 (1) As of January 31, 2023, the Current portion of long-term debt, net of discount and issuance costs, includes $1.3 billion associated with the asset-backed debt securities issued by the Company. |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Jan. 31, 2023 | |
Equity [Abstract] | |
Components of Accumulated Other Comprehensive Loss, Net of Taxes | The components of accumulated other comprehensive loss, net of taxes as of January 31, 2023, and changes during the three months ended January 31, 2023 were as follows: Net unrealized Net unrealized Unrealized Cumulative Accumulated In millions Balance at beginning of period $ (1) $ 109 $ (2,596) $ (610) $ (3,098) Other comprehensive income (loss) before reclassifications 5 (518) — 20 (493) Reclassifications of losses into earnings — 247 35 — 282 Tax benefit (provision) — 55 (3) 1 53 Balance at end of period $ 4 $ (107) $ (2,564) $ (589) $ (3,256) The components of accumulated other comprehensive loss, net of taxes as of January 31, 2022, and changes during the three months ended January 31, 2022 were as follows: Net unrealized Net unrealized Unrealized Cumulative Accumulated In millions Balance at beginning of period $ 15 $ 81 $ (2,545) $ (466) $ (2,915) Other comprehensive (loss) income before reclassifications (1) 215 6 (11) 209 Reclassifications of (gains) losses into earnings — (201) 42 — (159) Tax provision — (2) (11) — (13) Balance at end of period $ 14 $ 93 $ (2,508) $ (477) $ (2,878) |
Net Earnings Per Share (Tables)
Net Earnings Per Share (Tables) | 3 Months Ended |
Jan. 31, 2023 | |
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: For the three months ended January 31, 2023 2022 In millions, except per share amounts Numerator: Net earnings $ 501 $ 513 Denominator: Weighted-average shares used to compute basic net EPS 1,298 1,304 Dilutive effect of employee stock plans 17 21 Weighted-average shares used to compute diluted net EPS 1,315 1,325 Net earnings per share: Basic $ 0.39 $ 0.39 Diluted $ 0.38 $ 0.39 Anti-dilutive weighted-average stock awards (1) 9 1 (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. |
Segment Information - Narrative
Segment Information - Narrative (Details) | 3 Months Ended |
Jan. 31, 2023 segment | |
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 | |
Jan. 31, 2023 | Jan. 31, 2022 | |
Segment Reporting Information [Line Items] | ||
Net revenue | $ 7,809 | $ 6,961 |
Segment earnings (loss) from operations | 591 | 448 |
Intersegment net revenue and other | ||
Segment Reporting Information [Line Items] | ||
Net revenue | (183) | (69) |
Operating Segment | ||
Segment Reporting Information [Line Items] | ||
Net revenue | 7,992 | 7,030 |
Segment earnings (loss) from operations | 1,026 | 827 |
Compute | ||
Segment Reporting Information [Line Items] | ||
Net revenue | 3,367 | 3,004 |
Compute | Intersegment net revenue and other | ||
Segment Reporting Information [Line Items] | ||
Net revenue | (89) | (40) |
Compute | Operating Segment | ||
Segment Reporting Information [Line Items] | ||
Net revenue | 3,456 | 3,044 |
Segment earnings (loss) from operations | 609 | 427 |
HPC & AI | ||
Segment Reporting Information [Line Items] | ||
Net revenue | 993 | 776 |
HPC & AI | Intersegment net revenue and other | ||
Segment Reporting Information [Line Items] | ||
Net revenue | (63) | (14) |
HPC & AI | Operating Segment | ||
Segment Reporting Information [Line Items] | ||
Net revenue | 1,056 | 790 |
Segment earnings (loss) from operations | 1 | (7) |
Storage | ||
Segment Reporting Information [Line Items] | ||
Net revenue | 1,168 | 1,116 |
Storage | Intersegment net revenue and other | ||
Segment Reporting Information [Line Items] | ||
Net revenue | (19) | (12) |
Storage | Operating Segment | ||
Segment Reporting Information [Line Items] | ||
Net revenue | 1,187 | 1,128 |
Segment earnings (loss) from operations | 142 | 157 |
Intelligent Edge | ||
Segment Reporting Information [Line Items] | ||
Net revenue | 1,121 | 900 |
Intelligent Edge | Intersegment net revenue and other | ||
Segment Reporting Information [Line Items] | ||
Net revenue | (6) | (1) |
Intelligent Edge | Operating Segment | ||
Segment Reporting Information [Line Items] | ||
Net revenue | 1,127 | 901 |
Segment earnings (loss) from operations | 247 | 157 |
Financial Services | ||
Segment Reporting Information [Line Items] | ||
Net revenue | 867 | 840 |
Financial Services | Intersegment net revenue and other | ||
Segment Reporting Information [Line Items] | ||
Net revenue | (6) | (2) |
Financial Services | Operating Segment | ||
Segment Reporting Information [Line Items] | ||
Net revenue | 873 | 842 |
Segment earnings (loss) from operations | 82 | 104 |
Corporate Investments and Other | ||
Segment Reporting Information [Line Items] | ||
Net revenue | 293 | 325 |
Corporate Investments and Other | Intersegment net revenue and other | ||
Segment Reporting Information [Line Items] | ||
Net revenue | 0 | 0 |
Corporate Investments and Other | Operating Segment | ||
Segment Reporting Information [Line Items] | ||
Net revenue | 293 | 325 |
Segment earnings (loss) from operations | $ (55) | $ (11) |
Segment Information - Reconcili
Segment Information - Reconciliation of Segment Operating Results (Details) - USD ($) $ in Millions | 3 Months Ended | |
Jan. 31, 2023 | Jan. 31, 2022 | |
Net revenue: | ||
Net revenue | $ 7,809 | $ 6,961 |
(Loss) earnings before taxes: | ||
Total segment earnings from operations | 591 | 448 |
Amortization of intangible assets | (73) | (73) |
Transformation costs | (102) | (111) |
Acquisition, disposition and other related charges | (11) | (8) |
Interest and other, net | (25) | (5) |
Tax indemnification and related adjustments | (1) | (17) |
Non-service net periodic benefit credit | 0 | 36 |
Earnings from equity interests | 58 | 31 |
Earnings before (provision) benefit for taxes | 623 | 493 |
Operating Segment | ||
Net revenue: | ||
Net revenue | 7,992 | 7,030 |
(Loss) earnings before taxes: | ||
Total segment earnings from operations | 1,026 | 827 |
Elimination of intersegment net revenue and other | ||
Net revenue: | ||
Net revenue | (183) | (69) |
Segment Reconciling Items | ||
(Loss) earnings before taxes: | ||
Unallocated corporate costs and eliminations | (108) | (59) |
Stock-based compensation expense | (140) | (128) |
Amortization of initial direct costs | 0 | (1) |
Amortization of intangible assets | (73) | (73) |
Transformation costs | (102) | (111) |
Disaster (charges) recovery | (1) | 1 |
Acquisition, disposition and other related charges | (11) | (8) |
Interest and other, net | (25) | (5) |
Tax indemnification and related adjustments | (1) | (17) |
Non-service net periodic benefit credit | 0 | 36 |
Earnings from equity interests | $ 58 | $ 31 |
Segment Information - Reconci_2
Segment Information - Reconciliation of Segment Assets (Details) - USD ($) $ in Millions | Jan. 31, 2023 | Oct. 31, 2022 |
Segment Reporting Information [Line Items] | ||
Assets | $ 55,591 | $ 57,123 |
Operating Segment | Compute | ||
Segment Reporting Information [Line Items] | ||
Assets | 15,616 | 16,881 |
Operating Segment | HPC & AI | ||
Segment Reporting Information [Line Items] | ||
Assets | 5,718 | 5,997 |
Operating Segment | Storage | ||
Segment Reporting Information [Line Items] | ||
Assets | 7,093 | 7,484 |
Operating Segment | Intelligent Edge | ||
Segment Reporting Information [Line Items] | ||
Assets | 4,403 | 4,594 |
Operating Segment | Financial Services | ||
Segment Reporting Information [Line Items] | ||
Assets | 14,937 | 14,837 |
Operating Segment | Corporate Investments and Other | ||
Segment Reporting Information [Line Items] | ||
Assets | 874 | 1,110 |
Corporate and unallocated assets | ||
Segment Reporting Information [Line Items] | ||
Assets | $ 6,950 | $ 6,220 |
Segment Information - Revenue b
Segment Information - Revenue by Geographic Region (Details) - USD ($) $ in Millions | 3 Months Ended | |
Jan. 31, 2023 | Jan. 31, 2022 | |
Segment Reporting Information [Line Items] | ||
Total net revenue | $ 7,809 | $ 6,961 |
Total Americas | ||
Segment Reporting Information [Line Items] | ||
Total net revenue | 3,454 | 2,779 |
United States | ||
Segment Reporting Information [Line Items] | ||
Total net revenue | 2,885 | 2,318 |
Americas excluding U.S. | ||
Segment Reporting Information [Line Items] | ||
Total net revenue | 569 | 461 |
Europe, Middle East and Africa | ||
Segment Reporting Information [Line Items] | ||
Total net revenue | 2,680 | 2,556 |
Asia Pacific and Japan | ||
Segment Reporting Information [Line Items] | ||
Total net revenue | $ 1,675 | $ 1,626 |
Transformation Programs - Narra
Transformation Programs - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Jan. 31, 2023 | Jan. 31, 2022 | Oct. 31, 2022 | |
Restructuring Cost and Reserve [Line Items] | |||
Transformation costs | $ 102 | $ 111 | |
Current restructuring liability reported in Accrued restructuring | 185 | $ 192 | |
Transformation Program | |||
Restructuring Cost and Reserve [Line Items] | |||
Current restructuring liability reported in Accrued restructuring | 184 | 191 | |
Transformation Program | Other Accrued Liabilities | |||
Restructuring Cost and Reserve [Line Items] | |||
Current restructuring liability reported in Accrued restructuring | 25 | 28 | |
Transformation Program | Long-Term Other Liabilities | |||
Restructuring Cost and Reserve [Line Items] | |||
Long-term portion of restructuring reserve, recorded in Other liabilities | $ 125 | $ 124 |
Transformation Programs - Trans
Transformation Programs - Transformation Costs (Details) - USD ($) $ in Millions | 3 Months Ended | |
Jan. 31, 2023 | Jan. 31, 2022 | |
Restructuring Cost and Reserve [Line Items] | ||
Total | $ 102 | $ 111 |
Cost optimization and prioritization plan | ||
Restructuring Cost and Reserve [Line Items] | ||
Program management | 1 | 8 |
IT costs | 8 | 8 |
Restructuring charges | 71 | 37 |
Total | 80 | 53 |
HPE Next | ||
Restructuring Cost and Reserve [Line Items] | ||
Program management | 0 | 3 |
IT costs | 21 | 47 |
Restructuring charges | 1 | 0 |
Gain on real estate sales | 0 | (8) |
Impairment of real estate assets | 0 | 11 |
Other | 0 | 5 |
Total | $ 22 | $ 58 |
Transformation Programs - Sched
Transformation Programs - Schedule of Restructuring Activity (Details) - USD ($) $ in Millions | 3 Months Ended | |
Jan. 31, 2023 | Jan. 31, 2022 | |
Cost optimization and prioritization plan | ||
Restructuring Reserve | ||
Charges | $ 71 | $ 37 |
Cost optimization and prioritization plan | Employee Severance | ||
Restructuring Reserve | ||
Balance at the beginning of the period | 185 | |
Charges | 53 | |
Cash payments | (71) | |
Non-cash items | 12 | |
Balance at the end of the period | 179 | |
Total costs incurred to date, as of January 31, 2023 | 698 | |
Total costs expected to be incurred, as of July 31, 2019 | 750 | |
Cost optimization and prioritization plan | Infrastructure and other | ||
Restructuring Reserve | ||
Balance at the beginning of the period | 122 | |
Charges | 18 | |
Cash payments | (18) | |
Non-cash items | 1 | |
Balance at the end of the period | 123 | |
Total costs incurred to date, as of January 31, 2023 | 501 | |
Total costs expected to be incurred, as of July 31, 2019 | 550 | |
HPE Next | ||
Restructuring Reserve | ||
Charges | 1 | $ 0 |
HPE Next | Employee Severance | ||
Restructuring Reserve | ||
Balance at the beginning of the period | 11 | |
Charges | 0 | |
Cash payments | (4) | |
Non-cash items | 1 | |
Balance at the end of the period | 8 | |
Total costs incurred to date, as of January 31, 2023 | 1,261 | |
Total costs expected to be incurred, as of July 31, 2019 | 1,261 | |
HPE Next | Infrastructure and other | ||
Restructuring Reserve | ||
Balance at the beginning of the period | 25 | |
Charges | 1 | |
Cash payments | (2) | |
Non-cash items | 0 | |
Balance at the end of the period | 24 | |
Total costs incurred to date, as of January 31, 2023 | 261 | |
Total costs expected to be incurred, as of July 31, 2019 | $ 265 |
Retirement Benefit Plans (Detai
Retirement Benefit Plans (Details) - Benefit Plans - USD ($) $ in Millions | 3 Months Ended | ||
Jan. 31, 2023 | Jan. 31, 2022 | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Service cost | $ 13 | $ 20 | |
Interest cost | [1] | 93 | 40 |
Expected return on plan assets | [1] | (130) | (118) |
Amortization and deferrals: | |||
Actuarial loss | [1] | 39 | 44 |
Prior service benefit | [1] | (3) | (3) |
Net periodic benefit (credit) cost | 12 | (17) | |
Settlement loss and special termination benefits | [1] | 0 | 1 |
Total net benefit (credit) cost | $ 12 | $ (16) | |
[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 - Narrative (
Taxes on Earnings - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Jan. 31, 2023 | Jan. 31, 2022 | Oct. 31, 2022 | |
Income Tax Disclosure [Abstract] | |||
Provision (benefit) for taxes | $ 122 | $ (20) | |
Effective tax rate (as a percent) | 19.60% | (4.10%) | |
Net income tax benefits | $ 11 | $ 83 | |
Income tax benefit on restructuring charges, separation costs, transformation costs and acquisition and other related charges | (22) | (24) | |
Excess tax benefits related to stock-based compensation | 13 | ||
Income tax expense (benefit) related to tax audit settlements | 23 | 43 | |
Income tax benefits related to settlement of foreign tax matters | 16 | ||
Unrecognized tax benefits | 720 | $ 674 | |
Unrecognized tax benefits that would affect effective tax rate if realized | 419 | 386 | |
Interest expense (income) | 1 | $ (40) | |
Accrued income tax for interest and penalties | $ 82 | $ 81 | |
Likelihood of no resolution period | 12 months | ||
Reasonably possible reduction in existing unrecognized tax benefits within the next 12 months | $ 44 | ||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21% |
Taxes on Earnings - Schedule of
Taxes on Earnings - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Millions | Jan. 31, 2023 | Oct. 31, 2022 |
Income Tax Disclosure [Abstract] | ||
Deferred tax assets | $ 2,231 | $ 2,127 |
Deferred tax liabilities | (345) | (320) |
Deferred tax assets net of deferred tax liabilities | $ 1,886 | $ 1,807 |
Balance Sheet Details - Schedul
Balance Sheet Details - Schedule of Cash and Cash Equivalents (Details) - USD ($) $ in Millions | Jan. 31, 2023 | Oct. 31, 2022 | Jan. 31, 2022 | Oct. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||
Cash and cash equivalents | $ 2,530 | $ 4,163 | |||
Restricted cash | [1] | 314 | 600 | ||
Total | $ 2,844 | $ 4,763 | $ 4,276 | $ 4,332 | |
[1]The Company included restricted cash in Other current assets in the accompanying Condensed Consolidated Balance Sheets. |
Balance Sheet Details - Sched_2
Balance Sheet Details - Schedule of Inventory (Details) - USD ($) $ in Millions | Jan. 31, 2023 | Oct. 31, 2022 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Finished goods | $ 1,999 | $ 2,187 |
Purchased parts and fabricated assemblies | 2,645 | 2,974 |
Total | $ 4,644 | $ 5,161 |
Balance Sheet Details - Sched_3
Balance Sheet Details - Schedule of Property, Plant and Equipment and Narrative (Details) - USD ($) $ in Millions | Jan. 31, 2023 | Oct. 31, 2022 |
Property, Plant and Equipment, Net | ||
Machinery and equipment, including equipment held for lease | $ 10,075 | $ 9,729 |
Property, plant and equipment before accumulated depreciation | 11,673 | 11,306 |
Accumulated depreciation | (5,683) | (5,522) |
Net property, plant and equipment | 5,990 | 5,784 |
Land | ||
Property, Plant and Equipment, Net | ||
Property, plant and equipment | 74 | 74 |
Buildings and leasehold improvements | ||
Property, Plant and Equipment, Net | ||
Property, plant and equipment | $ 1,524 | $ 1,503 |
Balance Sheet Details - Changes
Balance Sheet Details - Changes in Aggregate Product Warranty Liabilities (Details) $ in Millions | 3 Months Ended |
Jan. 31, 2023 USD ($) | |
Changes in aggregated product warranty liabilities | |
Balance at beginning of period | $ 360 |
Charges | 47 |
Adjustments related to pre-existing warranties | (2) |
Settlements made | (50) |
Balance at end of period | $ 355 |
Balance Sheet Details - Summary
Balance Sheet Details - Summary of Accounts Receivable, Net (Details) - USD ($) $ in Millions | Jan. 31, 2023 | Oct. 31, 2022 | Oct. 31, 2021 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Unbilled receivables | $ 286 | $ 245 | |
Accounts receivable | 3,942 | 3,881 | |
Allowances | (27) | (25) | $ (23) |
Total | $ 4,201 | $ 4,101 |
Balance Sheet Details - Allowan
Balance Sheet Details - Allowance for Doubtful Accounts (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended |
Jan. 31, 2023 | Oct. 31, 2022 | |
Accounts Receivable, Allowance for Credit Loss | ||
Balance at beginning of year | $ 25 | $ 23 |
Provision for credit losses | 5 | 25 |
Adjustments to existing allowances, including write offs | (3) | (23) |
Balance at end of year | $ 27 | $ 25 |
Balance Sheet Details - Narrati
Balance Sheet Details - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Jan. 31, 2023 | Jan. 31, 2022 | Oct. 31, 2022 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Trade receivables sold | $ 1,100 | $ 4,100 | |
Deferred revenue | 3,533 | 3,451 | |
Deferred revenue, current | 3,500 | 3,400 | |
Deferred revenue, noncurrent | 3,100 | 3,000 | |
Unearned revenue recognized | 1,200 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||
Unsatisfied performance obligations | 6,600 | ||
Current portion of capitalized costs | 77 | 76 | |
Non-current portion of capitalized costs | 126 | 124 | |
Amortization of capitalized costs to obtain a contract | $ 22 | $ 20 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-02-01 | |||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||
Unsatisfied performance obligation expected to be recognized over the remainder of the year | 48% | ||
Expected timing of satisfaction | 9 months | ||
Notes payable and short-term borrowings | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Deferred revenue | $ 95 | $ 88 |
Accounting for Leases as a Le_3
Accounting for Leases as a Lessor - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Jan. 31, 2023 | Oct. 31, 2022 | ||
Lessor, Lease, Description [Line Items] | |||
Financing receivable term, low end of range | 2 years | ||
Financing receivable term, high end of range | 5 years | ||
Financing receivable sold | $ 39 | $ 183 | |
Provision for credit losses | 18 | 177 | [1] |
Financing Receivable | |||
Lessor, Lease, Description [Line Items] | |||
Amount transferred via securitization | 0 | 1,600 | |
Operating Lease, Right-of-Use Asset | |||
Lessor, Lease, Description [Line Items] | |||
Amount transferred via securitization | $ 0 | 1,200 | |
Conflict Between Russia and Ukraine and Trade Sanctions | |||
Lessor, Lease, Description [Line Items] | |||
Provision for credit losses | $ 99 | ||
[1]Fiscal 2022 included a provision of $99 million related to expected credit losses due to the Company's exit from its Russia and Belarus businesses. |
Accounting for Leases as a Le_4
Accounting for Leases as a Lessor - Components of Financing Receivables (Details) - USD ($) $ in Millions | Jan. 31, 2023 | Oct. 31, 2022 | Oct. 31, 2021 |
Leases [Abstract] | |||
Minimum lease payments receivable | $ 9,256 | $ 8,686 | |
Unguaranteed residual value | 407 | 380 | |
Unearned income | (804) | (707) | |
Total | 8,859 | 8,359 | |
Allowance for credit losses | (333) | (325) | $ (228) |
Financing receivables, net | 8,526 | 8,034 | |
Less: current portion | (3,726) | (3,522) | |
Amounts due after one year, net | $ 4,800 | $ 4,512 |
Accounting for Leases as a Le_5
Accounting for Leases as a Lessor - Credit Risk Profile of Financing Receivables (Details) - USD ($) $ in Millions | Jan. 31, 2023 | Oct. 31, 2022 |
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Total | $ 8,859 | $ 8,359 |
Low | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
2023/2022 | 352 | 1,987 |
2022/2021 | 2,273 | 1,338 |
2021/2020 | 1,279 | 756 |
2020/2019 | 662 | 328 |
2019/2018 and prior | 331 | 143 |
Total | 4,897 | 4,552 |
Moderate | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
2023/2022 | 215 | 1,277 |
2022/2021 | 1,427 | 1,071 |
2021/2020 | 1,004 | 571 |
2020/2019 | 515 | 336 |
2019/2018 and prior | 485 | 234 |
Total | 3,646 | 3,489 |
High | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
2023/2022 | 5 | 44 |
2022/2021 | 48 | 42 |
2021/2020 | 44 | 67 |
2020/2019 | 64 | 69 |
2019/2018 and prior | 155 | 96 |
Total | $ 316 | $ 318 |
Accounting for Leases as a Le_6
Accounting for Leases as a Lessor - Allowance for Doubtful Accounts for Financing Receivables (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Jan. 31, 2023 | Oct. 31, 2022 | ||
Leases [Abstract] | |||
Balance at beginning of period | $ 325 | $ 228 | |
Provision for credit losses | 18 | 177 | [1] |
Adjustment to the existing allowance | 0 | (10) | |
Write-offs | (10) | (70) | |
Balance at end of period | $ 333 | $ 325 | |
[1]Fiscal 2022 included a provision of $99 million related to expected credit losses due to the Company's exit from its Russia and Belarus businesses. |
Accounting for Leases as a Le_7
Accounting for Leases as a Lessor - Summary of the Aging and Non-accrual Status of Gross Financing Receivables (Details) - USD ($) $ in Millions | Jan. 31, 2023 | Oct. 31, 2022 | |
Financing Receivable, Past Due [Line Items] | |||
Financing receivables, net | $ 8,859 | $ 8,359 | |
Gross financing receivables on non-accrual status | [1] | 317 | 290 |
Gross financing receivables 90 days past due and still accruing interest | [1] | 76 | 72 |
Unbilled | |||
Financing Receivable, Past Due [Line Items] | |||
Financing receivables, net | 8,238 | 7,815 | |
Current and past due 1-30 days | Billed | |||
Financing Receivable, Past Due [Line Items] | |||
Financing receivables, net | [2] | 396 | 372 |
Past due 31-60 days | Billed | |||
Financing Receivable, Past Due [Line Items] | |||
Financing receivables, net | [2] | 45 | 32 |
Past due 61-90 days | Billed | |||
Financing Receivable, Past Due [Line Items] | |||
Financing receivables, net | [2] | 32 | 19 |
Past due > 90 days | Billed | |||
Financing Receivable, Past Due [Line Items] | |||
Financing receivables, net | [2] | $ 148 | $ 121 |
[1]Includes billed operating lease receivables and billed and unbilled sales-type and direct-financing lease receivables.[2]Includes billed operating lease receivables and billed sales-type and direct-financing lease receivables. |
Accounting for Leases as a Le_8
Accounting for Leases as a Lessor - Lessor Activity Included in Income Statement (Details) - USD ($) $ in Millions | 3 Months Ended | |
Jan. 31, 2023 | Jan. 31, 2022 | |
Leases [Abstract] | ||
Interest income from sales-type leases and direct financing leases | $ 123 | $ 122 |
Lease income from operating leases | 589 | 572 |
Total lease income | $ 712 | $ 694 |
Accounting for Leases as a Le_9
Accounting for Leases as a Lessor - Assets and Liabilities of VIE (Details) - VIE Primary Beneficiary - USD ($) $ in Millions | Jan. 31, 2023 | Oct. 31, 2022 |
Variable Interest Entity [Line Items] | ||
Other current assets | $ 178 | $ 203 |
Short-term | 766 | 838 |
Long-term | 931 | 1,085 |
Property, plant and equipment | 1,122 | 1,323 |
Notes payable and short-term borrowings, net of unamortized debt issuance costs | 1,335 | 1,510 |
Long-term debt, net of unamortized debt issuance costs | $ 1,128 | $ 1,415 |
Goodwill (Details)
Goodwill (Details) $ in Millions | 3 Months Ended | |||
Nov. 01, 2022 USD ($) | Jan. 31, 2023 USD ($) reportingUnit | Oct. 31, 2022 | ||
Goodwill [Roll Forward] | ||||
Goodwill beginning balance | $ 17,403 | $ 17,403 | ||
Goodwill acquired during the period | 18 | |||
Goodwill ending balance | 17,421 | |||
HPC & AI | ||||
Goodwill [Roll Forward] | ||||
Goodwill beginning balance | 2,900 | 2,900 | ||
Percentage of fair value in excess of carrying amount | 0% | |||
Software Reporting Unit | ||||
Goodwill [Roll Forward] | ||||
Goodwill beginning balance | 123 | 123 | ||
Percentage of fair value in excess of carrying amount | 0% | |||
Compute | ||||
Goodwill [Roll Forward] | ||||
Goodwill beginning balance | [1] | 7,692 | 7,692 | |
Goodwill acquired during the period | 0 | |||
Goodwill ending balance | 7,692 | |||
Goodwill, transfers | 160 | |||
HPC & AI | ||||
Goodwill [Roll Forward] | ||||
Goodwill beginning balance | 2,889 | 2,889 | ||
Goodwill acquired during the period | 18 | |||
Goodwill ending balance | 2,907 | |||
Storage | ||||
Goodwill [Roll Forward] | ||||
Goodwill beginning balance | [1] | 4,000 | 4,000 | |
Goodwill acquired during the period | 0 | |||
Goodwill ending balance | 4,000 | |||
Intelligent Edge | ||||
Goodwill [Roll Forward] | ||||
Goodwill beginning balance | 2,555 | 2,555 | ||
Goodwill acquired during the period | 0 | |||
Goodwill ending balance | 2,555 | |||
Financial Services | ||||
Goodwill [Roll Forward] | ||||
Goodwill beginning balance | $ 144 | 144 | ||
Goodwill acquired during the period | 0 | |||
Goodwill ending balance | $ 144 | |||
Corporate Investments and Other | ||||
Goodwill | ||||
Number of reporting units | reportingUnit | 3 | |||
Goodwill [Roll Forward] | ||||
Goodwill acquired during the period | $ 0 | |||
Goodwill ending balance | $ 123 | |||
[1]As a result of the organizational realignments which were effective as of November 1, 2022, (described in Note 1, "Overview and Summary of Significant Accounting Policies"), $160 million of goodwill was reallocated from the Storage segment to the Compute segment as of the beginning of the period using a relative fair value approach. |
Fair Value - Schedule of Assets
Fair Value - Schedule of Assets and Liabilities on a Recurring Basis (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Millions | Jan. 31, 2023 | Oct. 31, 2022 |
Assets | ||
Total assets | $ 1,677 | $ 3,352 |
Liabilities | ||
Total liabilities | 466 | 307 |
Time deposits | ||
Assets | ||
Total assets | 631 | 1,516 |
Money market funds | ||
Assets | ||
Total assets | 501 | 744 |
Equity securities | ||
Assets | ||
Total assets | 126 | 126 |
Foreign bonds | ||
Assets | ||
Total assets | 104 | 91 |
Other debt securities | ||
Assets | ||
Total assets | 33 | 33 |
Interest rate contracts | ||
Liabilities | ||
Total liabilities | 137 | 178 |
Foreign exchange contracts | ||
Assets | ||
Total assets | 276 | 840 |
Liabilities | ||
Total liabilities | 329 | 128 |
Other derivatives | ||
Assets | ||
Total assets | 6 | 2 |
Liabilities | ||
Total liabilities | 0 | 1 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Assets | ||
Total assets | 501 | 744 |
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 | 501 | 744 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Equity securities | ||
Assets | ||
Total assets | 0 | 0 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Foreign bonds | ||
Assets | ||
Total assets | 0 | 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 | ||
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 |
Significant Other Observable Remaining Inputs (Level 2) | ||
Assets | ||
Total assets | 1,017 | 2,449 |
Liabilities | ||
Total liabilities | 466 | 307 |
Significant Other Observable Remaining Inputs (Level 2) | Time deposits | ||
Assets | ||
Total assets | 631 | 1,516 |
Significant Other Observable Remaining Inputs (Level 2) | Money market funds | ||
Assets | ||
Total assets | 0 | 0 |
Significant Other Observable Remaining Inputs (Level 2) | Equity securities | ||
Assets | ||
Total assets | 0 | 0 |
Significant Other Observable Remaining Inputs (Level 2) | Foreign bonds | ||
Assets | ||
Total assets | 104 | 91 |
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 | ||
Liabilities | ||
Total liabilities | 137 | 178 |
Significant Other Observable Remaining Inputs (Level 2) | Foreign exchange contracts | ||
Assets | ||
Total assets | 276 | 840 |
Liabilities | ||
Total liabilities | 329 | 128 |
Significant Other Observable Remaining Inputs (Level 2) | Other derivatives | ||
Assets | ||
Total assets | 6 | 2 |
Liabilities | ||
Total liabilities | 0 | 1 |
Significant Other Unobservable Remaining Inputs (Level 3) | ||
Assets | ||
Total assets | 159 | 159 |
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) | Equity securities | ||
Assets | ||
Total assets | 126 | 126 |
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 | 33 | 33 |
Significant Other Unobservable Remaining Inputs (Level 3) | Interest rate contracts | ||
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 |
Fair Value - Narrative (Details
Fair Value - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Jan. 31, 2023 | Oct. 31, 2022 | |
Equity Securities in Privately Held Companies | Measurement Alternative | ||
Financial assets and liabilities measured at fair value on a recurring basis | ||
Impairment loss | $ 10 | |
Fair Value | ||
Financial assets and liabilities measured at fair value on a recurring basis | ||
Fair value, short-term and long-term debt | 13,000 | $ 12,200 |
Carrying Value | ||
Financial assets and liabilities measured at fair value on a recurring basis | ||
Fair value, short-term and long-term debt | $ 12,900 | $ 12,500 |
Financial Instruments - Cash Eq
Financial Instruments - Cash Equivalents and Available-for-Sale Investments (Details) - USD ($) $ in Millions | Jan. 31, 2023 | Oct. 31, 2022 |
Cash and Cash Equivalents [Line Items] | ||
Debt securities, amortized cost | $ 133 | |
Fair Value | 137 | |
Gross Unrealized Gains (Losses) | 4 | $ (1) |
Total cash and equivalents and available-for-sale investments, Cost basis | 1,265 | 2,385 |
Total cash equivalents and available-for-sale debt investments | 1,269 | 2,384 |
Cost | ||
Cash and Cash Equivalents [Line Items] | ||
Total cash equivalents | 1,132 | 2,260 |
Cost | Time deposits | ||
Cash and Cash Equivalents [Line Items] | ||
Total cash equivalents | 631 | 1,516 |
Cost | Money market funds | ||
Cash and Cash Equivalents [Line Items] | ||
Total cash equivalents | 501 | 744 |
Fair Value | ||
Cash and Cash Equivalents [Line Items] | ||
Total cash equivalents | 1,132 | 2,260 |
Fair Value | Time deposits | ||
Cash and Cash Equivalents [Line Items] | ||
Total cash equivalents | 631 | 1,516 |
Fair Value | Money market funds | ||
Cash and Cash Equivalents [Line Items] | ||
Total cash equivalents | 501 | 744 |
Debt securities | ||
Cash and Cash Equivalents [Line Items] | ||
Debt securities, amortized cost | 133 | 125 |
Fair Value | 137 | 124 |
Gross Unrealized Gains (Losses) | 4 | (1) |
Foreign bonds | ||
Cash and Cash Equivalents [Line Items] | ||
Debt securities, amortized cost | 102 | 93 |
Fair Value | 104 | 91 |
Gross Unrealized Gains (Losses) | 2 | (2) |
Other debt securities | ||
Cash and Cash Equivalents [Line Items] | ||
Debt securities, amortized cost | 31 | 32 |
Fair Value | 33 | 33 |
Gross Unrealized Gains (Losses) | $ 2 | $ 1 |
Financial Instruments - Contrac
Financial Instruments - Contractual Maturities of Investments in Available-for-Sale Debt Securities (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Jan. 31, 2023 | Jan. 31, 2022 | Oct. 31, 2022 | |
Amortized Cost | |||
Due in one year | $ 19 | ||
Due in more than five years | 114 | ||
Debt securities, amortized cost | 133 | ||
Fair Value | |||
Due in one year | 19 | ||
Due in more than five years | 118 | ||
Debt securities, fair value | 137 | ||
Summary of Investment Holdings [Line Items] | |||
Investments in equity interests | 2,225 | $ 2,160 | |
Earnings from equity interests | 58 | $ 31 | |
Fair Value | |||
Summary of Investment Holdings [Line Items] | |||
Investments in equity interests | 2,200 | 2,200 | |
Equity Securities in Privately Held Companies | Measurement Alternative | |||
Summary of Investment Holdings [Line Items] | |||
Equity securities without readily determinable fair value | 160 | 175 | |
Impairment loss | 10 | ||
Equity Securities in Privately Held Companies | Fair Value | |||
Summary of Investment Holdings [Line Items] | |||
Equity securities without readily determinable fair value | $ 126 | $ 126 | |
Unrealized gain (loss) on equity securities | $ 59 |
Financial Instruments - Gross N
Financial Instruments - Gross Notional and Fair Value of Instruments in the Balance Sheets (Details) - USD ($) $ in Millions | Jan. 31, 2023 | Oct. 31, 2022 |
Derivatives, Fair Value | ||
Outstanding Gross Notional | $ 17,520 | $ 19,920 |
Other Current Assets | ||
Derivatives, Fair Value | ||
Derivative asset, fair value | 158 | 518 |
Long-Term Financing Receivables and Other Assets | ||
Derivatives, Fair Value | ||
Derivative asset, fair value | 124 | 324 |
Other Accrued Liabilities | ||
Derivatives, Fair Value | ||
Derivative liability, fair value | 246 | 91 |
Long-Term Other Liabilities | ||
Derivatives, Fair Value | ||
Derivative liability, fair value | 220 | 216 |
Derivatives designated as hedging instruments | ||
Derivatives, Fair Value | ||
Outstanding Gross Notional | 12,194 | 12,045 |
Derivatives designated as hedging instruments | Other Current Assets | ||
Derivatives, Fair Value | ||
Derivative asset, fair value | 142 | 480 |
Derivatives designated as hedging instruments | Long-Term Financing Receivables and Other Assets | ||
Derivatives, Fair Value | ||
Derivative asset, fair value | 121 | 320 |
Derivatives designated as hedging instruments | Other Accrued Liabilities | ||
Derivatives, Fair Value | ||
Derivative liability, fair value | 203 | 37 |
Derivatives designated as hedging instruments | Long-Term Other Liabilities | ||
Derivatives, Fair Value | ||
Derivative liability, fair value | 208 | 204 |
Derivatives designated as hedging instruments | Fair value hedges | Interest rate contracts | ||
Derivatives, Fair Value | ||
Outstanding Gross Notional | 2,500 | 2,500 |
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 | 0 | 0 |
Derivatives designated as hedging instruments | Fair value hedges | Interest rate contracts | Other Accrued Liabilities | ||
Derivatives, Fair Value | ||
Derivative liability, fair value | 0 | 0 |
Derivatives designated as hedging instruments | Fair value hedges | Interest rate contracts | Long-Term Other Liabilities | ||
Derivatives, Fair Value | ||
Derivative liability, fair value | 137 | 178 |
Derivatives designated as hedging instruments | Cash flow hedges | Foreign exchange contracts | ||
Derivatives, Fair Value | ||
Outstanding Gross Notional | 7,798 | 7,662 |
Derivatives designated as hedging instruments | Cash flow hedges | Foreign exchange contracts | Other Current Assets | ||
Derivatives, Fair Value | ||
Derivative asset, fair value | 119 | 420 |
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 | 96 | 246 |
Derivatives designated as hedging instruments | Cash flow hedges | Foreign exchange contracts | Other Accrued Liabilities | ||
Derivatives, Fair Value | ||
Derivative liability, fair value | 168 | 25 |
Derivatives designated as hedging instruments | Cash flow hedges | Foreign exchange contracts | Long-Term Other Liabilities | ||
Derivatives, Fair Value | ||
Derivative liability, fair value | 47 | 13 |
Derivatives designated as hedging instruments | Net investment hedges | Foreign exchange contracts | ||
Derivatives, Fair Value | ||
Outstanding Gross Notional | 1,896 | 1,883 |
Derivatives designated as hedging instruments | Net investment hedges | Foreign exchange contracts | Other Current Assets | ||
Derivatives, Fair Value | ||
Derivative asset, fair value | 23 | 60 |
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 | 25 | 74 |
Derivatives designated as hedging instruments | Net investment hedges | Foreign exchange contracts | Other Accrued Liabilities | ||
Derivatives, Fair Value | ||
Derivative liability, fair value | 35 | 12 |
Derivatives designated as hedging instruments | Net investment hedges | Foreign exchange contracts | Long-Term Other Liabilities | ||
Derivatives, Fair Value | ||
Derivative liability, fair value | 24 | 13 |
Derivatives not designated as hedging instruments | ||
Derivatives, Fair Value | ||
Outstanding Gross Notional | 5,326 | 7,875 |
Derivatives not designated as hedging instruments | Other Current Assets | ||
Derivatives, Fair Value | ||
Derivative asset, fair value | 16 | 38 |
Derivatives not designated as hedging instruments | Long-Term Financing Receivables and Other Assets | ||
Derivatives, Fair Value | ||
Derivative asset, fair value | 3 | 4 |
Derivatives not designated as hedging instruments | Other Accrued Liabilities | ||
Derivatives, Fair Value | ||
Derivative liability, fair value | 43 | 54 |
Derivatives not designated as hedging instruments | Long-Term Other Liabilities | ||
Derivatives, Fair Value | ||
Derivative liability, fair value | 12 | 12 |
Derivatives not designated as hedging instruments | Foreign exchange contracts | ||
Derivatives, Fair Value | ||
Outstanding Gross Notional | 5,216 | 7,780 |
Derivatives not designated as hedging instruments | Foreign exchange contracts | Other Current Assets | ||
Derivatives, Fair Value | ||
Derivative asset, fair value | 10 | 36 |
Derivatives not designated as hedging instruments | Foreign exchange contracts | Long-Term Financing Receivables and Other Assets | ||
Derivatives, Fair Value | ||
Derivative asset, fair value | 3 | 4 |
Derivatives not designated as hedging instruments | Foreign exchange contracts | Other Accrued Liabilities | ||
Derivatives, Fair Value | ||
Derivative liability, fair value | 43 | 53 |
Derivatives not designated as hedging instruments | Foreign exchange contracts | Long-Term Other Liabilities | ||
Derivatives, Fair Value | ||
Derivative liability, fair value | 12 | 12 |
Derivatives not designated as hedging instruments | Other derivatives | ||
Derivatives, Fair Value | ||
Outstanding Gross Notional | 110 | 95 |
Derivatives not designated as hedging instruments | Other derivatives | Other Current Assets | ||
Derivatives, Fair Value | ||
Derivative asset, fair value | 6 | 2 |
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 | 1 |
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 | Jan. 31, 2023 USD ($) businessDay | Oct. 31, 2022 USD ($) businessDay | |
Derivative assets | |||
Gross Amount Recognized | $ 282 | $ 842 | |
Gross Amount Offset | 0 | 0 | |
Net Amount Presented | 282 | 842 | |
Gross Amounts Not Offset | |||
Derivatives | 128 | 199 | |
Financial Collateral | [1] | 140 | 508 |
Net Amount | 14 | 135 | |
Derivative liabilities | |||
Gross Amount Recognized | 466 | 307 | |
Gross Amount Offset | 0 | 0 | |
Net Amount Presented | 466 | 307 | |
Gross Amounts Not Offset | |||
Derivatives | 128 | 199 | |
Financial Collateral | [2] | 319 | 113 |
Net Amount | $ (19) | $ (5) | |
Business days prior to respective reporting date | businessDay | 2 | 2 | |
Cash collateral | $ 313 | ||
Counterparty collateral | $ 6 | $ 113 | |
[1]Represents the cash collateral posted by counterparties as of the respective reporting date for the Company's asset position, net of derivative amounts that could be offset, as of, generally, two business days prior to the respective reporting date.[2]Represents the collateral posted by the Company in cash or through the re-use of counterparty cash collateral as of the respective reporting date for the Company's liability position, net of derivative amounts that could be offset, as of, generally, two business days prior to the respective reporting date. As of January 31, 2023, of the $319 million of collateral posted, $313 million was in cash and $6 million was through the re-use of counterparty collateral. As of October 31, 2022, the entire amount of the collateral posted of $113 million was through the re-use of counterparty collateral. |
Financial Instruments - Amounts
Financial Instruments - Amounts Recorded in the Balance Sheet (Details) - Long-term debt - USD ($) $ in Millions | Jan. 31, 2023 | Oct. 31, 2022 |
Derivatives, Fair Value | ||
Carrying amount of the hedged liabilities | $ (2,358) | $ (2,317) |
Cumulative amount of fair value hedging adjustment included in the carrying amount of the hedged assets | $ 137 | $ 178 |
Financial Instruments - Pre-tax
Financial Instruments - Pre-tax Effect of Derivative Instruments in Hedging Relationships on OCI (Details) - USD ($) $ in Millions | 3 Months Ended | |
Jan. 31, 2023 | Jan. 31, 2022 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gains (Losses) Recognized in OCI on Derivatives in Cash Flow Hedging Relationship | $ (518) | $ 215 |
Total | (625) | 226 |
Expected amount of AOCI expected to be reclassified in the next 12 months | (104) | |
Foreign currency contracts | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gains (Losses) Recognized in OCI on Derivatives in Cash Flow Hedging Relationship | (518) | 215 |
Gains (Losses) Recognized in OCI on Derivatives in Net Investment Hedging Relationship | $ (107) | $ 11 |
Financial Instruments - Pre-t_2
Financial Instruments - Pre-tax Effect of Derivative Instruments on Statement of Earnings (Details) - USD ($) $ in Millions | 3 Months Ended | |
Jan. 31, 2023 | Jan. 31, 2022 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Net revenue | $ 7,809 | $ 6,961 |
Interest and other, net | (25) | (5) |
Net revenue | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Total gains (losses) | 50 | 65 |
Interest and other, net | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Total gains (losses) | (491) | 87 |
Interest rate contracts | Net revenue | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gains (losses) on derivatives in fair value hedging relationships | 0 | 0 |
Interest rate contracts | Interest and other, net | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gains (losses) on derivatives in fair value hedging relationships | (41) | 54 |
Foreign currency contracts | Net revenue | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of gains (losses) reclassified from accumulated other comprehensive income into income | 50 | 65 |
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 | (297) | 136 |
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 |
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 | 41 | (54) |
Derivatives not designated as hedging instruments | Foreign currency contracts | Net revenue | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gains (losses) on derivatives not designated as hedging instruments | 0 | 0 |
Derivatives not designated as hedging instruments | Foreign currency contracts | Interest and other, net | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gains (losses) on derivatives not designated as hedging instruments | (194) | (40) |
Derivatives not designated as hedging instruments | Other derivatives | Net revenue | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gains (losses) on derivatives not designated as hedging instruments | 0 | 0 |
Derivatives not designated as hedging instruments | Other derivatives | Interest and other, net | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gains (losses) on derivatives not designated as hedging instruments | $ 0 | $ (9) |
Borrowings - Notes Payable and
Borrowings - Notes Payable and Short-Term Borrowings (Details) - USD ($) $ in Millions | Jan. 31, 2023 | Oct. 31, 2022 | |
Short-term Debt [Line Items] | |||
Current portion of long-term debt | $ 3,727 | [1] | $ 3,876 |
Commercial paper | 1,439 | 542 | |
Notes payable to banks, lines of credit and other | 183 | 194 | |
Notes payable and short-term borrowings | 5,349 | 4,612 | |
Long-term debt | 7,577 | 7,853 | |
Total | 12,926 | $ 12,465 | |
Asset-backed Debt Securities | |||
Short-term Debt [Line Items] | |||
Current portion of long-term debt | $ 1,300 | ||
[1]As of January 31, 2023, the Current portion of long-term debt, net of discount and issuance costs, includes $1.3 billion associated with the asset-backed debt securities issued by the Company. |
Borrowings - Narrative (Details
Borrowings - Narrative (Details) | 1 Months Ended | ||
Dec. 31, 2021 USD ($) | Jan. 31, 2023 USD ($) program | Oct. 31, 2022 USD ($) | |
Unsecured Revolving Credit Facility | |||
Line of Credit Facility [Line Items] | |||
Borrowing capacity | $ 4,750,000,000 | ||
Debt term | 5 years | ||
Line of credit | $ 0 | $ 0 | |
Commercial Paper | |||
Line of Credit Facility [Line Items] | |||
Number of commercial paper programs | program | 2 | ||
Maximum borrowing capacity under commercial paper program | $ 4,750,000,000 | ||
Amount outstanding | 759,000,000 | 0 | |
Commercial Paper | Euro Commercial Paper Program | |||
Line of Credit Facility [Line Items] | |||
Maximum borrowing capacity under commercial paper program | 3,000,000,000 | ||
Commercial Paper | Euro Commercial Paper Certificate of Deposit Programme | |||
Line of Credit Facility [Line Items] | |||
Maximum borrowing capacity under commercial paper program | 1,000,000,000 | ||
Commercial Paper | Hewlett Packard Enterprise | Euro Commercial Paper Certificate of Deposit Programme | |||
Line of Credit Facility [Line Items] | |||
Amount outstanding | $ 680,000,000 | $ 542,000,000 |
Stockholders' Equity - Componen
Stockholders' Equity - Components of AOCI (Details) - USD ($) $ in Millions | 3 Months Ended | |
Jan. 31, 2023 | Jan. 31, 2022 | |
Components of accumulated other comprehensive loss, net of taxes | ||
Balance at beginning of period | $ 19,909 | |
Balance at end of period | 20,063 | |
Net unrealized gains (losses) on available-for-sale securities | ||
Components of accumulated other comprehensive loss, net of taxes | ||
Balance at beginning of period | (1) | $ 15 |
Other comprehensive income (loss) before reclassifications | 5 | (1) |
Reclassifications of (gains) losses into earnings | 0 | 0 |
Tax benefit (provision) | 0 | 0 |
Balance at end of period | 4 | 14 |
Net unrealized gains (losses) on cash flow hedges | ||
Components of accumulated other comprehensive loss, net of taxes | ||
Balance at beginning of period | 109 | 81 |
Other comprehensive income (loss) before reclassifications | (518) | 215 |
Reclassifications of (gains) losses into earnings | 247 | (201) |
Tax benefit (provision) | 55 | (2) |
Balance at end of period | (107) | 93 |
Unrealized components of defined benefit plans | ||
Components of accumulated other comprehensive loss, net of taxes | ||
Balance at beginning of period | (2,596) | (2,545) |
Other comprehensive income (loss) before reclassifications | 0 | 6 |
Reclassifications of (gains) losses into earnings | 35 | 42 |
Tax benefit (provision) | (3) | (11) |
Balance at end of period | (2,564) | (2,508) |
Cumulative translation adjustment | ||
Components of accumulated other comprehensive loss, net of taxes | ||
Balance at beginning of period | (610) | (466) |
Other comprehensive income (loss) before reclassifications | 20 | (11) |
Reclassifications of (gains) losses into earnings | 0 | 0 |
Tax benefit (provision) | 1 | 0 |
Balance at end of period | (589) | (477) |
Accumulated other comprehensive loss | ||
Components of accumulated other comprehensive loss, net of taxes | ||
Balance at beginning of period | (3,098) | (2,915) |
Other comprehensive income (loss) before reclassifications | (493) | 209 |
Reclassifications of (gains) losses into earnings | 282 | (159) |
Tax benefit (provision) | 53 | (13) |
Balance at end of period | $ (3,256) | $ (2,878) |
Stockholders' Equity - Narrativ
Stockholders' Equity - Narrative (Details) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 12 Months Ended |
Jan. 31, 2023 | Oct. 31, 2022 | |
Equity, Class of Treasury Stock [Line Items] | ||
Remaining authorized repurchase amount | $ 1,300 | |
Share Repurchase Program | ||
Equity, Class of Treasury Stock [Line Items] | ||
Common stock retired (in shares) | 4.7 | |
Open market repurchases (shares) | 0.1 | 0.3 |
Repurchases of common stock recorded as a reduction to stockholders' equity | $ 70 |
Net Earnings Per Share (Details
Net Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | ||
Jan. 31, 2023 | Jan. 31, 2022 | ||
Numerator: | |||
Net earnings | $ 501 | $ 513 | |
Denominator: | |||
Weighted-average shares used to compute basic net EPS (in shares) | 1,298 | 1,304 | |
Dilutive effect of employee stock plans (in shares) | 17 | 21 | |
Weighted-average shares used to compute diluted net EPS (in shares) | 1,315 | 1,325 | |
Net earnings per share: | |||
Basic (in dollars per share) | $ 0.39 | $ 0.39 | |
Diluted (in dollars per share) | $ 0.38 | $ 0.39 | |
Anti-dilutive weighted-average stock awards (in shares) | [1] | 9 | 1 |
[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, Contingencies, an_2
Litigation, Contingencies, and Commitments (Details) $ in Millions | 1 Months Ended | 24 Months Ended | |||||||||||
Jun. 15, 2022 USD ($) | Sep. 22, 2020 patent | Dec. 19, 2016 | Jan. 24, 2013 USD ($) | Dec. 11, 2012 USD ($) | Apr. 21, 2012 USD ($) | May 10, 2010 USD ($) employee | Apr. 29, 2010 USD ($) | Sep. 30, 2011 | Jul. 31, 2011 | Oct. 31, 2008 contract | Apr. 20, 2012 USD ($) | Apr. 11, 2012 USD ($) | |
Q3 Networking Litigation | |||||||||||||
Litigation and Contingencies | |||||||||||||
Number of patents allegedly infringed | patent | 4 | ||||||||||||
Settled Litigation | Terix Copyright Matter | |||||||||||||
Litigation and Contingencies | |||||||||||||
Amount awarded to other party | $ 30 | ||||||||||||
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 | ||||||||||||
Damages sought | $ 370 | ||||||||||||
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 |
Equity Method Investments - Nar
Equity Method Investments - Narrative (Details) - H3C | Dec. 30, 2022 |
Schedule of Equity Method Investments [Line Items] | |
Ownership | 49% |
Equity method investment, right to put, price per share, multiplier | 15 |
Subsequent Events (Details)
Subsequent Events (Details) $ in Millions | Mar. 07, 2023 USD ($) |
Subsequent Event | Athonet and Axis Security | |
Subsequent Event [Line Items] | |
Expected price of acquisition | $ 490 |