Cover Page
Cover Page - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2023 | Dec. 11, 2023 | Apr. 30, 2023 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Oct. 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 Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
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 | ||
ICFR Auditor Attestation Flag | true | ||
Document Financial Statement Error Correction | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 18,427 | ||
Entity Common Stock, Shares Outstanding | 1,300,000,000 | ||
Documents Incorporated by Reference | DOCUMENTS INCORPORATED BY REFERENCE DOCUMENT DESCRIPTION 10-K PART Portions of the Registrant's proxy statement related to its 2024 Annual Meeting of Stockholders to be filed pursuant to Regulation 14A within 120 days after Registrant's fiscal year end of October 31, 2023 are incorporated by reference into Part III of this Report. III | ||
Entity Central Index Key | 0001645590 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --10-31 | ||
Document Fiscal Year Focus | 2023 | ||
Document Fiscal Period Focus | FY |
Audit Information
Audit Information | 12 Months Ended |
Oct. 31, 2023 | |
Audit Information [Abstract] | |
Auditor location | Houston, Texas |
Auditor name | Ernst & Young LLP |
Auditor Firm ID | 42 |
Consolidated Statements of Earn
Consolidated Statements of Earnings - USD ($) shares in Thousands, $ in Millions | 12 Months Ended | ||
Oct. 31, 2023 | Oct. 31, 2022 | Oct. 31, 2021 | |
Net Revenue: | |||
Financing income | $ 547 | $ 483 | $ 494 |
Total net revenue | 29,135 | 28,496 | 27,784 |
Costs and Expenses: | |||
Financing cost | 383 | 310 | 212 |
Research and development | 2,349 | 2,045 | 1,979 |
Selling, general and administrative | 5,160 | 4,941 | 4,929 |
Amortization of intangible assets | 288 | 293 | 354 |
Impairment of goodwill | 0 | 905 | 0 |
Transformation costs | 283 | 473 | 930 |
Disaster charges | 1 | 48 | 16 |
Acquisition, disposition and other related charges | 69 | 19 | 36 |
Total costs and expenses | 27,046 | 27,714 | 26,652 |
Earnings from operations | 2,089 | 782 | 1,132 |
Other Nonoperating Income (Expense) | (156) | (188) | (211) |
Tax indemnification and other adjustments | 55 | (67) | 65 |
Non-service net periodic benefit (cost) credit | (3) | 134 | 70 |
Litigation judgment | 0 | 0 | 2,351 |
Earnings from equity interests | 245 | 215 | 180 |
Earnings before provision for taxes | 2,230 | 876 | 3,587 |
Provision for taxes | (205) | (8) | (160) |
Net earnings | $ 2,025 | $ 868 | $ 3,427 |
Net earnings (loss) per share: | |||
Basic (in dollars per share) | $ 1.56 | $ 0.67 | $ 2.62 |
Diluted (in dollars per share) | $ 1.54 | $ 0.66 | $ 2.58 |
Weighted-average shares used to compute net earnings per share: | |||
Basic (in shares) | 1,299,000 | 1,303,000 | 1,309,000 |
Diluted (in shares) | 1,316,000 | 1,322,000 | 1,330,000 |
Products | |||
Net Revenue: | |||
Revenues | $ 18,100 | $ 17,794 | $ 17,011 |
Costs and Expenses: | |||
Cost of products and services | 11,958 | 12,463 | 11,892 |
Services | |||
Net Revenue: | |||
Revenues | 10,488 | 10,219 | 10,279 |
Costs and Expenses: | |||
Cost of products and services | $ 6,555 | $ 6,217 | $ 6,304 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2023 | Oct. 31, 2022 | Oct. 31, 2021 | |
Statement of Comprehensive Income [Abstract] | |||
Net earnings | $ 2,025 | $ 868 | $ 3,427 |
Change in Net Unrealized Gains (Losses) on Available-for-sale Securities: | |||
Net unrealized gains (losses) arising during the period | 1 | (16) | (3) |
Change in unrealized gains (losses) on available-for-sale securities | 1 | (16) | (3) |
Change in Net Unrealized (Losses) Gains on Cash Flow Hedges: | |||
Net unrealized (losses) gains arising during the period | (177) | 1,025 | (50) |
Net losses (gains) reclassified into earnings | 116 | (978) | 156 |
Change in unrealized (losses) gains on cash flow hedges | (61) | 47 | 106 |
Change in Unrealized Components of Defined Benefit Plans: | |||
Net unrealized (losses) gains arising during the period | (99) | (315) | 763 |
Amortization of net actuarial loss and prior service benefit | 144 | 155 | 281 |
Curtailments, settlements and other | 3 | 5 | 4 |
Change in unrealized components of defined benefit plans | 48 | (155) | 1,048 |
Change in Cumulative Translation Adjustment | (32) | (146) | 16 |
Other Comprehensive (Loss) Income Before Taxes | (44) | (270) | 1,167 |
Benefit (Provision) for Taxes | 58 | 87 | (143) |
Other Comprehensive Income (Loss), Net of Taxes | 14 | (183) | 1,024 |
Comprehensive Income | $ 2,039 | $ 685 | $ 4,451 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Oct. 31, 2023 | Oct. 31, 2022 | |
Current Assets: | |||
Cash and cash equivalents | $ 4,270 | $ 4,163 | |
Accounts receivable, net of allowances | 3,481 | 4,101 | |
Financing receivables, net of allowances | 3,543 | 3,522 | |
Inventory | 4,607 | 5,161 | |
Other current assets | 3,047 | 3,559 | |
Total current assets | 18,948 | 20,506 | |
Property, plant and equipment, net | 5,989 | 5,784 | |
Long-term financing receivables and other assets | 11,377 | 10,537 | |
Investments in equity interests | 2,197 | 2,160 | |
Goodwill | [1] | 17,988 | 17,403 |
Intangible assets, net | 654 | 733 | |
Total assets | 57,153 | 57,123 | |
Current Liabilities: | |||
Notes payable and short-term borrowings | 4,868 | 4,612 | |
Accounts payable | 7,136 | 8,717 | |
Employee compensation and benefits | 1,724 | 1,401 | |
Taxes on earnings | 155 | 176 | |
Deferred revenue | 3,658 | 3,451 | |
Accrued restructuring | 180 | 192 | |
Other accrued liabilities | 4,161 | 4,625 | |
Total current liabilities | 21,882 | 23,174 | |
Long-term debt | 7,487 | 7,853 | |
Other non-current liabilities | 6,546 | 6,187 | |
Commitments and Contingencies | |||
HPE stockholders' Equity: | |||
Common stock, $0.01 par value (9,600 shares authorized; 1,283 and 1,281 issued and outstanding at October 31, 2023 and October 31, 2022, respectively) | 13 | 13 | |
Additional paid-in capital | 28,199 | 28,299 | |
Accumulated deficit | (3,946) | (5,350) | |
Accumulated other comprehensive loss | (3,084) | (3,098) | |
Total HPE stockholders' equity | 21,182 | 19,864 | |
Non-controlling interests | 56 | 45 | |
Total stockholders' equity | 21,238 | 19,909 | |
Total liabilities and stockholders' equity | $ 57,153 | $ 57,123 | |
[1] Goodwill is net of accumulated impairment losses of $1.9 billion. Of this amount, $1.7 billion relates to HPC & AI of which $815 million was recorded during the fourth quarter of fiscal 2022. The Software reporting unit within Corporate Investments and Other, has an accumulated impairment loss of $90 million which was also recorded during the fourth quarter of fiscal 2022. |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Oct. 31, 2023 | Oct. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Common stock, par value ($ per share) | $ 0.01 | $ 0.01 |
Common stock, authorized (shares) | 9,600,000,000 | 9,600,000,000 |
Common stock, issued (shares) | 1,283,000,000 | 1,281,000,000 |
Common stock, outstanding (shares) | 1,283,000,000 | 1,281,000,000 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2023 | Oct. 31, 2022 | Oct. 31, 2021 | |
Cash Flows from Operating Activities: | |||
Net earnings | $ 2,025 | $ 868 | $ 3,427 |
Adjustments to Reconcile Net Earnings to Net Cash Provided by Operating Activities: | |||
Depreciation and amortization | 2,616 | 2,480 | 2,597 |
Impairment of goodwill | 0 | 905 | 0 |
Stock-based compensation expense | 428 | 391 | 382 |
Provision for inventory and doubtful accounts | 230 | 262 | 176 |
Restructuring charges | 242 | 214 | 620 |
Deferred taxes on earnings | (67) | (249) | (167) |
Earnings from equity interests | (245) | (215) | (180) |
Dividends received from equity investees | 200 | 197 | 184 |
Other, net | 31 | 310 | 202 |
Changes in Operating Assets and Liabilities, Net of Acquisitions: | |||
Accounts receivable | 577 | (186) | (591) |
Financing receivables | (607) | 694 | (165) |
Inventory | 400 | (713) | (1,959) |
Accounts payable | (1,655) | 1,707 | 1,608 |
Taxes on earnings | (34) | 150 | (73) |
Restructuring | (275) | (334) | (527) |
Other assets and liabilities | 562 | (1,888) | 337 |
Net cash provided by operating activities | 4,428 | 4,593 | 5,871 |
Cash Flows from Investing Activities: | |||
Investment in property, plant and equipment | (2,828) | (3,122) | (2,502) |
Proceeds from sale of property, plant and equipment | 602 | 602 | 354 |
Purchases of investments | (15) | (55) | (60) |
Proceeds from maturities and sales of investments | 9 | 262 | 15 |
Financial collateral posted | (1,443) | (148) | (903) |
Financial collateral received | 1,152 | 374 | 805 |
Payments made in connection with business acquisitions, net of cash acquired | (761) | 0 | (505) |
Net cash used in investing activities | (3,284) | (2,087) | (2,796) |
Cash Flows from Financing Activities: | |||
Short-term borrowings with original maturities less than 90 days, net | (47) | 100 | (36) |
Proceeds from debt, net of issuance costs | 4,725 | 3,296 | 3,022 |
Payment of debt | (4,887) | (3,992) | (5,465) |
Cash settlement for derivative hedging debt | (7) | (8) | 0 |
Net payments related to stock-based award activities | (106) | (53) | (29) |
Repurchase of common stock | (421) | (512) | (213) |
Cash dividends paid to non-controlling interests, net of contributions | 0 | (6) | (18) |
Cash dividends paid to shareholders | (619) | (621) | (625) |
Net cash used in financing activities | (1,362) | (1,796) | (3,364) |
Effect of exchange rate changes on cash, cash equivalents, and restricted cash | 36 | (279) | 0 |
(Decrease) increase in cash, cash equivalents and restricted cash | (182) | 431 | (289) |
Cash, cash equivalents and restricted cash at beginning of period | 4,763 | 4,332 | 4,621 |
Cash, cash equivalents and restricted cash at end of period | 4,581 | 4,763 | 4,332 |
Supplemental Cash Flow Disclosures: | |||
Income taxes paid, net of refunds | 307 | 107 | 398 |
Interest expense paid | $ 677 | $ 453 | $ 486 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Millions | Total | Cumulative Effect, Period of Adoption, Adjustment | Equity Attributable to the Company | Equity Attributable to the Company Cumulative Effect, Period of Adoption, Adjustment | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Deficit Cumulative Effect, Period of Adoption, Adjustment | Accumulated Other Comprehensive Loss | Non- controlling Interests |
Balance (in shares) at Oct. 31, 2020 | 1,287,010,000 | |||||||||
Balance at Oct. 31, 2020 | $ 16,096 | $ (25) | $ 16,049 | $ (25) | $ 13 | $ 28,350 | $ (8,375) | $ (25) | $ (3,939) | $ 47 |
Increase (Decrease) in Stockholders' Equity | ||||||||||
Net earnings | 3,436 | 3,427 | 3,427 | 9 | ||||||
Other comprehensive income | 1,024 | 1,024 | 1,024 | 0 | ||||||
Comprehensive income | 4,460 | 4,451 | 9 | |||||||
Stock-based compensation expense | 382 | 382 | 382 | |||||||
Tax withholding related to vesting of employee stock plans | (86) | (86) | (86) | |||||||
Issuance of common stock in connection with employee stock plans and other (in shares) | 23,135,000 | |||||||||
Issuance of common stock in connection with employee stock plans and other | 50 | 50 | 49 | 1 | ||||||
Repurchases of common stock (in shares) | (15,511,000) | |||||||||
Repurchases of common stock | (225) | (225) | (225) | |||||||
Cash dividends declared ($0.48 per common share) | (635) | (625) | (625) | (10) | ||||||
Balance (in shares) at Oct. 31, 2021 | 1,294,634,000 | |||||||||
Balance at Oct. 31, 2021 | 20,017 | 19,971 | $ 13 | 28,470 | (5,597) | (2,915) | 46 | |||
Increase (Decrease) in Stockholders' Equity | ||||||||||
Net earnings | 873 | 868 | 868 | 5 | ||||||
Other comprehensive income | (183) | (183) | (183) | 0 | ||||||
Comprehensive income | 690 | 685 | 5 | |||||||
Stock-based compensation expense | 391 | 391 | 391 | |||||||
Tax withholding related to vesting of employee stock plans | (111) | (111) | (111) | |||||||
Issuance of common stock in connection with employee stock plans and other (in shares) | 21,346,000 | |||||||||
Issuance of common stock in connection with employee stock plans and other | 56 | 54 | 54 | 2 | ||||||
Repurchases of common stock (in shares) | (34,943,000) | |||||||||
Repurchases of common stock | (505) | (505) | (505) | |||||||
Cash dividends declared ($0.48 per common share) | $ (629) | (621) | (621) | (8) | ||||||
Balance (in shares) at Oct. 31, 2022 | 1,281,000,000 | 1,281,037,000 | ||||||||
Balance at Oct. 31, 2022 | $ 19,909 | 19,864 | $ 13 | 28,299 | (5,350) | (3,098) | 45 | |||
Increase (Decrease) in Stockholders' Equity | ||||||||||
Net earnings | 2,036 | 2,025 | 2,025 | 11 | ||||||
Other comprehensive income | 14 | 14 | 14 | 0 | ||||||
Comprehensive income | 2,050 | 2,039 | 11 | |||||||
Stock-based compensation expense | 428 | 428 | 428 | |||||||
Tax withholding related to vesting of employee stock plans | (165) | (165) | (165) | |||||||
Issuance of common stock in connection with employee stock plans and other (in shares) | 28,684,000 | |||||||||
Issuance of common stock in connection with employee stock plans and other | 54 | 54 | 56 | (2) | ||||||
Repurchases of common stock (in shares) | (27,091,000) | |||||||||
Repurchases of common stock | (419) | (419) | (419) | |||||||
Cash dividends declared ($0.48 per common share) | $ (619) | (619) | (619) | |||||||
Balance (in shares) at Oct. 31, 2023 | 1,283,000,000 | 1,282,630,000 | ||||||||
Balance at Oct. 31, 2023 | $ 21,238 | $ 21,182 | $ 13 | $ 28,199 | $ (3,946) | $ (3,084) | $ 56 |
Consolidated Statements of St_2
Consolidated Statements of Stockholders' Equity (Parenthetical) - $ / shares | 12 Months Ended | ||
Oct. 31, 2023 | Oct. 31, 2022 | Oct. 31, 2021 | |
Statement of Stockholders' Equity [Abstract] | |||
Cash dividends declared per share (in dollars per share) | $ 0.48 | $ 0.48 | $ 0.48 |
Overview and Summary of Signifi
Overview and Summary of Significant Accounting Policies | 12 Months Ended |
Oct. 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 Principles of Consolidation The Consolidated Financial Statements are prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). The accompanying Consolidated Financial Statements include the accounts of the Company and its subsidiaries and affiliates in which the Company has a controlling financial interest or is the primary beneficiary. All intercompany transactions and accounts within the consolidated businesses of the Company have been eliminated. The Company consolidates a Variable Interest Entity (“VIE”) where it has been determined that the Company is the primary beneficiary of the entity's operation. The primary beneficiary is the party that has both the power to direct the activities that most significantly impact the VIE's economic performance and the obligation to absorb losses or the right to receive benefits of the VIE that could potentially be significant to the VIE. In evaluating whether the Company is the primary beneficiary, the Company evaluates its power to direct the most significant activities of the VIE by considering the purpose and design of the entity and the risks the entity was designed to create and pass through to its variable interest holders. The Company also evaluates its economic interests in the VIE. The Company accounts for investments in companies over which it has the ability to exercise significant influence but does not hold a controlling interest under the equity method of accounting, and the Company records its proportionate share of income or losses in Earnings from equity interests in the Consolidated Statements of Earnings. Non-controlling interests are presented as a separate component within Total stockholders' equity in the Consolidated Balance Sheets. Net earnings attributable to non-controlling interests are recorded within Interest and other, net in the Consolidated Statements of Earnings and are not presented separately, as they were not material for any periods presented. Segment Realignment Effective as of the beginning of the first quarter of fiscal 2023, in order 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. Russia/Ukraine Conflict The conflict between Russia and Ukraine and the related sanctions imposed by the U.S., European Union and other countries in response have negatively impacted the Company's operations in both countries and increased economic and political uncertainty across the world. In response to the sanctions imposed, in February 2022, the Company suspended all new sales and shipments to Russia and Belarus and implemented compliance measures to address the continuously changing regulatory landscape. Based on a further assessment of business risks and needs, in June 2022, the Company determined that it was no longer tenable to maintain its operations in Russia and Belarus and has been proceeding with an orderly, managed exit of its remaining business in these countries. During fiscal 2022, the Company recorded total pre-tax charges of $161 million primarily related to expected credit losses of financing and trade receivables, employee severance and abandoned assets, $99 million of which was included in Financing cost, $12 million in Cost of services and $50 million in Disaster charges in the Consolidated Statements of Earnings. Use of Estimates The preparation of financial statements requires management to make estimates, judgments and assumptions that affect the amounts reported in the Consolidated Financial Statements and accompanying notes. Estimates are assessed each period and updated to reflect current information, including those related to revenue recognition, stock-based compensation, net periodic benefit costs, restructuring accruals, provision for taxes, valuation allowance for deferred taxes, provision for expected credit losses, inventory reserves, and impairment assessments of goodwill, intangible assets and other long-lived assets. The Company believes that these estimates, judgments and assumptions are reasonable under the circumstances, and are subject to significant uncertainties, some of which are beyond the Company's control. Should any of these estimates change, it could adversely affect the Company's results of operations. Actual results could differ materially from these estimates under different assumptions or conditions. Foreign Currency Translation The Company predominately uses the U.S. dollar as its functional currency. Assets and liabilities denominated in non-U.S. currencies are remeasured into U.S. dollars at current exchange rates for monetary assets and liabilities and at historical exchange rates for non-monetary assets and liabilities. Net revenue, costs and expenses denominated in non-U.S. currencies are recorded in U.S. dollars at the average rates of exchange prevailing during the period. The Company includes gains or losses from foreign currency remeasurement in Interest and other, net in the Consolidated Statements of Earnings and gains and losses from cash flow hedges in Net revenue as the hedged revenue is recognized. Certain non-U.S. subsidiaries designate the local currency as their functional currency, and the Company records the translation of their assets and liabilities into U.S. dollars at the balance sheet date as translation adjustments and includes them as a component of Accumulated other comprehensive loss in the Consolidated Balance Sheets. Revenue Recognition The Company accounts for a contract with a customer when both parties have provided written approval and are committed to perform, each party's rights including payment terms are identified, the contract has commercial substance, and collection of consideration is probable. The Company enters into contracts with customers that typically include combinations of products and services, resulting in arrangements containing multiple performance obligations for hardware and software products and/or various services. The Company determines whether each product or service is distinct in order to identify the performance obligations in the contract and allocate the contract transaction price among the distinct performance obligations. Arrangements are distinct based on whether the customer can benefit from the product or service on its own or together with other resources that are readily available and whether the commitment to transfer the product or service to the customer is separately identifiable from other obligations in the contract. The Company classifies its hardware, perpetual software licenses, service arrangements and software-as-a-service (“SaaS”) as distinct performance obligations. Term software licenses represent multiple obligations, which include software licenses and software maintenance. In transactions where the Company delivers hardware or software, it is typically the principal and records revenue and costs of goods sold on a gross basis. The majority of the Company's revenue is derived from sales of products and services and the associated support and maintenance, and such revenue is recognized when, or as, control of promised products or services is transferred to the customer, in an amount that reflects the consideration to which the Company expects to be entitled, in exchange for those products or services. Variable consideration offered in contracts with customers, partners and distributors may include rebates, volume-based discounts, price protection, and other incentive programs. Variable consideration is estimated at contract inception and updated at the end of each reporting period as additional information becomes available and recognized only to the extent that it is probable that a significant reversal of revenue will not occur. Transfer of control occurs once the customer has the contractual right to use the product, generally upon shipment or once delivery and risk of loss has transferred to the customer. Transfer of control can also occur over time for maintenance and services as the customer receives the benefit over the contract term. The Company's hardware and perpetual software licenses are distinct performance obligations where revenue is recognized upfront upon transfer of control. Term software licenses include multiple performance obligations where the term licenses are recognized upfront upon transfer of control, with the associated software maintenance revenue recognized ratably over the contract term as services and software updates are provided. SaaS arrangements have one distinct performance obligation which is satisfied over time with revenue recognized ratably over the contract term as the customer consumes the services. On its product sales, the Company records consideration from shipping and handling on a gross basis within net product sales. Revenue is recorded net of any associated sales taxes. The Company allocates the transaction price for the contract among the performance obligations on a relative standalone selling price basis. The standalone selling price (“SSP”) is the price at which an entity would sell a promised product or service separately to a customer. For products and services sold as a bundle, the SSP is generally not directly observable and requires the Company to estimate SSP based on management judgment by considering available data such as internal margin objectives, pricing strategies, market/competitive conditions, historical profitability data, as well as other observable inputs. For certain products and services, the Company establishes SSP based on the observable price when sold separately in similar circumstances to similar customers. The Company establishes SSP ranges for its products and services and reassesses them periodically. Judgment is applied in determining the transaction price as the Company may be required to estimate variable consideration when determining the amount of revenue to recognize. Variable consideration may include various rebates, volume-based discounts, price protection, and other incentive programs that are offered to customers, partners and distributors. When determining the amount of revenue to recognize, the Company estimates the expected usage of these programs, applying the expected value or most likely estimate and updates the estimate at each reporting period as actual utilization becomes available. The Company also considers the customers' right of return in determining the transaction price, where applicable. Contract Balances Accounts receivable and contract assets A receivable is a right to consideration in exchange for products or services the Company has transferred to a customer that is unconditional. A contract asset is a right to consideration in exchange for products or services transferred to a customer that is conditional on something other than the passage of time. A receivable is recorded when the right to consideration becomes unconditional. The Company's contract assets include unbilled receivables which are recorded when the Company recognizes revenue in advance of billings. Unbilled receivables generally relate to services contracts where a service has been performed and control has transferred, but invoicing to the customer is subject to future milestone billings or other contractual payment schedules. The Company classifies unbilled receivables as Accounts receivable. Contract liabilities A contract liability is an obligation to transfer products or services to a customer for which the Company has received consideration, or the amount is due, from the customer. The Company's contract liabilities primarily consist of deferred revenue. Deferred revenue is recorded when amounts invoiced to customers are in excess of revenue that can be recognized because performance obligations have not been satisfied and control of the promised products or services has not transferred to the customer. Deferred revenue largely represents amounts invoiced in advance for product (hardware/software) support contracts, consulting projects and product sales where revenue cannot be recognized yet. Costs to obtain a contract with a customer The Company capitalizes the incremental costs of obtaining a contract with a customer, primarily sales commissions, if the Company expects to recover those costs. The Company has elected, as a practical expedient, to expense the costs of obtaining a contract as incurred for contracts with terms of one year or less. The typical amortization periods used range from two Shipping and Handling The Company includes costs related to shipping and handling in Cost of products. Stock-Based Compensation Stock-based compensation expense is based on the measurement date fair value of the award and is recognized only for those awards expected to meet the service and performance vesting conditions. Stock-based compensation expense for stock options and restricted stock units with only a service condition is recognized on a straight-line basis over the requisite service period of the award. For stock options and restricted stock units with both a service condition and a performance or market condition, the expense is recognized on a graded vesting basis over the requisite service period of the award. Stock-based compensation expense is determined at the aggregate grant level for service-based awards and at the individual vesting tranche level for awards with performance and/or market conditions. The forfeiture rate is estimated based on historical experience. Retirement and Post-Retirement Plans The Company has various defined benefit, other contributory and noncontributory, retirement and post-retirement plans. The costs and obligations for these plans depend on various assumptions. Major assumptions relate primarily to discount rates, mortality rates, expected increases in compensation levels and the expected long-term return on plan assets. These assumptions vary by plan, and the weighted-average rates used are set forth in Note 4, “Retirement and Post-Retirement Benefit Plans.” The discount rate assumption is based on current investment yields of high-quality fixed-income securities with maturities similar to the expected benefits payment period. Mortality rates help predict the expected life of plan participants and are based on a historical demographic study of the plan. The expected increase in the compensation levels assumption reflects long-term actual experience and future expectations. The expected long-term return on plan assets is determined based on asset allocations, historical portfolio results, historical asset correlations and management's expected returns for each asset class. In any fiscal year, significant differences may arise between the actual return and the expected long-term return on plan assets. Historically, differences between the actual return and expected long-term return on plan assets have resulted from changes in target or actual asset allocation, short-term performance relative to expected long-term performance, and to a lesser extent, differences between target and actual investment allocations, the timing of benefit payments compared to expectations, and the use of derivatives intended to effect asset allocation changes or hedge certain investment or liability exposures. The following table provides the impact changes in the weighted-average assumptions of discount rates, the expected increase in compensation levels and the expected long-term return on plan assets would have had on the net periodic benefit cost for fiscal 2023: Change in basis Change in Net Periodic Benefit Cost In millions Assumptions: Discount rate (25) $ 17 Expected increase in compensation levels 25 3 Expected long-term return on plan assets (25) $ 25 The Company generally amortizes unrecognized actuarial gains and losses on a straight-line basis over the average remaining estimated service life or, in the case of closed plans, life expectancy of participants. In limited cases, actuarial gains and losses are amortized using the corridor approach. Advertising Costs to produce advertising are expensed as incurred during production. Costs to communicate advertising are expensed when the advertising is first run. Advertising expense totaled approximately $173 million, $179 million, and $188 million in fiscal 2023, 2022, and 2021, respectively. Restructuring The Company's transformation programs include charges to approved restructuring plans. Restructuring charges include severance costs to eliminate a specified number of employees, infrastructure charges to vacate facilities and consolidate operations, and contract cancellation costs. These restructuring actions require management to estimate the timing and amount of severance and other employee separation costs for workforce reduction and enhanced early retirement programs, the fair value of assets made redundant or obsolete, and the value of lease and contract cancellation and other exit costs. The Company records restructuring charges based on estimated employee terminations and site closure and consolidation plans. The Company accrues for severance and other employee separation costs under these actions when it is probable that benefits will be paid and the amount is reasonably estimable. The rates used in determining severance accruals are based on existing plans, historical experiences and negotiated settlements. For a full description of the Company's restructuring actions, refer to the discussions in Note 3, “Transformation Programs.” Taxes on Earnings The Company recognizes deferred tax assets and liabilities for the expected tax consequences of temporary differences between the tax bases of assets and liabilities and their reported amounts using enacted tax rates in effect for the year the differences are expected to reverse. The Company records a valuation allowance to reduce deferred tax assets to the amount that is more likely than not to be realized. In determining the need for a valuation allowance, the Company considers future market growth, forecasted earnings, future sources of taxable income, the mix of earnings in the jurisdictions in which the Company operates, and prudent and feasible tax planning strategies. In the event the Company were to determine that it is more likely than not that the Company will be unable to realize all or part of its deferred tax assets in the future, the Company would increase the valuation allowance and recognize a corresponding charge to earnings in the period in which such a determination was made. Likewise, if the Company later determines that the deferred tax assets are more likely than not to be realized, the Company would reverse the applicable portion of the previously recognized valuation allowance. In order for the Company to realize deferred tax assets, the Company must be able to generate sufficient taxable income, of the appropriate character, in the jurisdictions in which the deferred tax assets are located, prior to their expiration under applicable tax laws. The Company records accruals for uncertain tax positions when the Company believes that it is not more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. The provision for income taxes includes the effects of adjustments for uncertain tax positions as well as any related interest and penalties. The Company recognizes interest income from favorable settlements and interest expense and penalties accrued on unrecognized tax benefits in Provision for taxes in the Consolidated Statements of Earnings. The Company is subject to the Global Intangible Low Taxed Income (“GILTI”) tax in the U.S. The Company elected to treat taxes on future GILTI inclusions in U.S. taxable income as a current period expense when incurred. Allowance for Doubtful Accounts Accounts Receivable The allowance for expected credit losses related to accounts receivable is comprised of a general reserve and a specific reserve. The Company may record a specific reserve for individual accounts when the Company becomes aware of specific customer circumstances, such as in the case of a bankruptcy filing or deterioration in the customer's operating results or financial position. If there are additional changes in circumstances related to the specific customer, the Company further adjusts estimates of the recoverability of receivables. The Company maintains an allowance for credit losses for all other customers based on a variety of factors, including the use of third-party credit risk models that generate quantitative measures of default probabilities based on market factors, the financial condition of customers and the length of time receivables are past due. These qualitative factors are subjective and require a degree of management judgment. The past due or delinquency status of a receivable is based on the contractual payment terms of the receivable. The Company establishes an allowance for expected credit losses related to accounts receivable, including unbilled receivables. Financing Receivable The allowance for expected credit losses related to financing receivables is comprised of a general reserve and a specific reserve. The Company establishes a specific reserve for financing receivables with identified exposures, such as customer defaults, bankruptcy or other events, that make it unlikely the Company will recover its investment. For individually evaluated receivables, the Company determines the expected cash flow for the receivable, which includes consideration of estimated proceeds from disposition of the collateral and calculates an estimate of the potential loss and the probability of loss. For those accounts where a loss is considered probable, the Company records a specific reserve. The Company maintains a general reserve using a credit loss model on a regional basis and bases such percentages on several factors, including consideration of historical credit losses and portfolio delinquencies, trends in the overall weighted-average risk rating of the portfolio, current economic conditions, and forward-looking information, including reasonable and supportable forecasts. The Company excludes accounts evaluated as part of the specific reserve from the general reserve analysis. The Company generally writes off a receivable or records a specific reserve when a receivable becomes 180 days past due, or sooner if the Company determines that the receivable is not collectible. Non-Accrual and Past-Due Financing Receivables The Company considers a financing receivable to be past due when the minimum payment is not received by the contractually specified due date. The Company generally places financing receivables on non-accrual status, which is the suspension of interest accrual, and considers such receivables to be non-performing at the earlier of the time at which full payment of principal and interest becomes doubtful or the receivable becomes 90 days past due. Subsequently, the Company may recognize revenue on non-accrual financing receivables as payments are received, which is on a cash basis, if the Company deems the recorded financing receivable to be fully collectible; however, if there is doubt regarding the ultimate collectability of the recorded financing receivable, all cash receipts are applied to the carrying amount of the financing receivable, which is the cost recovery method. In certain circumstances, such as when the Company deems a delinquency to be of an administrative nature, financing receivables may accrue interest after becoming 90 days past due. The non-accrual status of a financing receivable may not impact a customer's risk rating. After all of a customer's delinquent principal and interest balances are settled, the Company may return the related financing receivable to accrual status. Concentrations of Risk Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash, cash equivalents and restricted cash, investments, receivables from trade customers and contract manufacturers, financing receivables and derivatives. The Company maintains cash, cash equivalents and restricted cash, investments, derivatives, and certain other financial instruments with various financial institutions. These financial institutions are located in many different geographic regions, and the Company's policy is designed to limit exposure from any particular institution. As part of its risk management processes, the Company performs periodic evaluations of the relative credit standing of these financial institutions. The Company has not sustained material credit losses from instruments held at these financial institutions. The Company utilizes derivative contracts to protect against the effects of foreign currency and interest rate exposures. Such contracts involve the risk of non-performance by the counterparty, which could result in a material loss. For more details on the collateral program, see Note 13, “Financial Instruments.” Credit risk with respect to accounts receivable from trade customers and financing receivables 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 performs ongoing credit evaluations of the financial condition of its customers and may require collateral, such as letters of credit and bank guarantees, in certain circumstances. As of October 31, 2023 and 2022 no single customer accounted for more than 10% of the Company's receivable from trade customers and financing receivables. Restricted Cash Restricted cash is included within Other current assets in the accompanying Consolidated Balance Sheets and is primarily related to cash received under the Company's collateral securities agreements for its derivative instruments and cash restricted under the fixed-term securitization program for the issuance of asset-backed debt securities. Inventory The Company values inventory at the lower of cost or net realizable value. Cost is computed using standard cost which approximates actual cost on a first-in, first-out basis. At each reporting period, the Company assesses the value of its inventory and writes down the cost of inventory to its net realizable value if required, for estimated excess or obsolescence. Factors influencing these adjustments include changes in future demand forecasts, market conditions, technological changes, product life-cycle and development plans, component cost trends, product pricing, physical deterioration, and quality issues. The write down for excess or obsolescence is charged to the provision of inventory, which is a component of Cost of Products and Cost of Services in the Consolidated Statements of Earnings. At the point of the loss recognition, a new, lower cost basis for that inventory is established, and subsequent changes in facts and circumstances do not result in the restoration or increase in that newly established cost basis. Property, Plant and Equipment, net The Company states property, plant and equipment at cost less accumulated depreciation. The Company capitalizes additions and improvements and expenses maintenance and repairs as incurred. Depreciation expense is recognized on a straight-line basis over the estimated useful lives of the assets. Estimated useful lives are five three accumulated depreciation are removed from the Consolidated Balance Sheets with any gain or loss recognized in the Consolidated Statements of Earnings. The Company capitalizes certain internal and external costs incurred to acquire or create internal use software, principally related to software coding, designing system interfaces and installation and testing of the software. The Company amortizes capitalized internal use software costs using the straight-line method over the estimated useful lives of the software, generally from three Leases Lessee Accounting The Company enters into various leases as a lessee for assets including office buildings, data centers, vehicles, and aviation. The Company determines if an arrangement is a lease at inception. An arrangement contains a lease when the arrangement conveys the right to control the use of an identified asset over the lease term. Upon lease commencement, the Company records a lease liability for the obligation to make lease payments and right-of-use (“ROU”) asset for the right to use the underlying asset for the lease term in the Consolidated Balance Sheets. The lease liability is measured at commencement date based on the present value of lease payments not yet paid over the lease term and the Company's incremental borrowing rate. As most of the Company's leases do not provide an implicit rate, the Company uses an incremental borrowing rate which approximates the rate at which the Company would borrow, on a secured basis, in the country where the lease was executed. The ROU asset is based on the lease liability, adjusted for lease prepayments, lease incentives received, and the lessee's initial direct costs. Fixed payments are included in the recognition of ROU assets and liabilities, while non-lease components, such as maintenance or utility charges are expensed as incurred. The Company has agreements with lease and non-lease components that are accounted for separately and not included in its leased assets and corresponding liabilities for the majority of the Company's lease agreements. The Company allocates consideration to the lease and non-lease components using their relative standalone values. The lease term may include options to extend or to terminate the lease that the Company is reasonably certain to exercise. The Company has elected not to record leases with an initial term of twelve months or less on the Consolidated Balance Sheets. For finance leases, the ROU asset is amortized on a straight-line basis over the shorter of the useful life of the asset or the lease term. Interest expense on the lease liability is recorded separately using the interest method. For operating leases, lease expense is generally recognized on a straight-line basis over the lease term. Lessor Accounting The Company's lease offerings are non-cancelable and the payment schedule primarily consists of fixed payments. Variable payments that are based on an index are included in lease receivables. The Company allocates consideration amongst lease components and non-lease components on a relative standalone selling price basis, when lease arrangements include multiple performance obligations. At the end of the lease term, the Company allows the client to either return the equipment, purchase the equipment or renew the lease based on mutually agreed upon terms. The Company retains a residual position in equipment through lease and finance agreements which is equivalent to an estimated market value. The residual amount is established prior to lease inception, based upon estimated equipment values at end of lease using product road map trends, historical analysis, future projections and remarketing experience. The Company's residual amounts are evaluated at least annually to assess the appropriateness of the carrying values. Any anticipated declines in specific future residual values that are considered to be other-than-temporary would be recorded in current earnings. |
Segment Information
Segment Information | 12 Months Ended |
Oct. 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 (“CODM”), who is the Chief Executive Officer (“CEO”), uses to evaluate, view and run the Company's business operations, which include, but are not limited to, customer base and homogeneity of products and technology. The six segments are based on this organizational structure and information reviewed by Hewlett Packard Enterprise's management to evaluate segment results. A summary of the types of products and services within each segment is as 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 High-Performance Computing (“HPC”), Artificial Intelligence (“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 EX, HPE Cray XD (formerly known as 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 as aaS through the HPE GreenLake edge-to-cloud platform. Storag e provides data storage and data management offerings, which include cloud-native primary storage with the HPE Alletra Storage portfolio; self-service private cloud on-demand with HPE GreenLake for Private Cloud Business Edition; data storage and data management services with HPE GreenLake for Block Storage and HPE GreenLake for File Storage; disaster recovery and ransomware recovery with Zerto; data protection services with HPE GreenLake for Backup and Recovery; and big data solutions running on the family of HPE Alletra 4000 Data Storage Servers. Storage also provides solutions for unstructured data and analytics workloads along with traditional tape, disk products and storage networking. Storage also provides data-driven intelligence with HPE InfoSight and HPE CloudPhysics along with operational and support services and data management solutions delivered through the HPE GreenLake edge-to-cloud platform. Intelligent Edge offers wired and wireless local area network, campus, branch, 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, software-defined wide-area networking, network security, 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. Intelligent Edge offerings are consolidated in the edge service platform which takes a cloud-native approach that provides customers with 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 and includes Athonet, which provides private mobile core networks to enterprises and communication services providers; the HPE Software business, which offers the HPE Ezmeral Software Container Platform and HPE Ezmeral Software Data Fabric; OpsRamp which provides a SaaS platform for managed service providers and enterprise IT teams to monitor and manage their cloud and on-premises (“hybrid”) infrastructure; and Hewlett Packard Labs, which is responsible for research and development. Segment Policy Hewlett Packard Enterprise derives the results of its business segments directly from its internal management reporting system. The accounting policies that Hewlett Packard Enterprise uses to derive segment results are substantially the same as those the consolidated company uses. The CODM measures the performance of each segment based on several metrics, including earnings from operations. The CODM uses these results, in part, to evaluate the performance of, and to allocate resources to each of the segments. Segment revenue includes revenues from sales to external customers and intersegment revenues that reflect transactions between the segments on an arm's-length basis. Intersegment revenues primarily consist of sales of hardware and software that are sourced internally and, in the majority of the cases, are financed as operating leases by FS to the Company's customers. Hewlett Packard Enterprise's consolidated net revenue is derived and reported after the elimination of intersegment revenues from such arrangements. Financing cost in the Consolidated Statements of Earnings reflects interest expense on borrowing and funding-related activity associated with FS and its subsidiaries, and debt issued by Hewlett Packard Enterprise for which a portion of the proceeds benefited FS. Hewlett Packard Enterprise does not allocate to its segments certain operating expenses, which it manages at the corporate level. These unallocated operating costs include certain corporate costs and eliminations, stock-based compensation expense, amortization of initial direct costs, amortization of intangible assets, impairment of goodwill, t ransformation costs, disaster charges and acquisition, disposition and other related charges. Effective November 1, 2023, in order to align the Company’s segment financial reporting more closely with its current business structure, the Company established a new reportable segment, Hybrid Cloud which includes its historical Storage segment, HPE GreenLake Flex Solutions (which provides flexible as-a-service IT infrastructure through the HPE GreenLake edge-to-cloud platform and was previously reported under Compute and HPC & AI segments), Private Cloud, and Software (previously reported under Corporate Investments and Other segment). Additionally, certain products and services reported in the financial results for the HPC & AI segment through the end of fiscal 2023 will be reported in the Compute and Hybrid Cloud segments, and the recently acquired Athonet business and certain components of the CMS business reported in the financial results for Corporate Investments and Other through the end of fiscal 2023 will be reported in the Intelligent Edge segment. Beginning in the first quarter of fiscal 2024, the Company will report its results under the realigned six reportable segments. Segment Operating Results Compute HPC & AI Storage Intelligent Edge Financial Services Corporate Investments and Other Total In millions Fiscal 2023 Net revenue $ 11,129 $ 3,775 $ 4,329 $ 5,186 $ 3,466 $ 1,250 $ 29,135 Intersegment net revenue 307 138 86 18 14 — 563 Total segment net revenue $ 11,436 $ 3,913 $ 4,415 $ 5,204 $ 3,480 $ 1,250 $ 29,698 Segment earnings (loss) from operations $ 1,569 $ 47 $ 429 $ 1,419 $ 317 $ (172) $ 3,609 Fiscal 2022 Net revenue $ 12,627 $ 3,078 $ 4,546 $ 3,665 $ 3,326 $ 1,254 $ 28,496 Intersegment net revenue 223 114 57 9 13 1 417 Total segment net revenue $ 12,850 $ 3,192 $ 4,603 $ 3,674 $ 3,339 $ 1,255 $ 28,913 Segment earnings (loss) from operations $ 1,821 $ 11 $ 641 $ 549 $ 399 $ (92) $ 3,329 Fiscal 2021 Net revenue $ 12,158 $ 3,037 $ 4,553 $ 3,292 $ 3,388 $ 1,356 $ 27,784 Intersegment net revenue 251 147 82 10 13 — 503 Total segment net revenue $ 12,409 $ 3,184 $ 4,635 $ 3,302 $ 3,401 $ 1,356 $ 28,287 Segment earnings (loss) from operations $ 1,382 $ 231 $ 716 $ 509 $ 390 $ (95) $ 3,133 The reconciliation of segment operating results to Consolidated Statement of Earnings results was as follows: For the fiscal years ended October 31, 2023 2022 2021 In millions Net Revenue: Total segments $ 29,698 $ 28,913 $ 28,287 Elimination of intersegment net revenue (563) (417) (503) Total consolidated net revenue $ 29,135 $ 28,496 $ 27,784 Earnings before taxes: Total segment earnings from operations $ 3,609 $ 3,329 $ 3,133 Unallocated corporate costs and eliminations (464) (303) (285) Stock-based compensation expense (428) (391) (372) Amortization of initial direct costs — (4) (8) Amortization of intangible assets (288) (293) (354) Impairment of goodwill — (905) — Transformation costs (283) (473) (930) Disaster recovery (charges) 12 (159) (16) Acquisition, disposition and other related charges (69) (19) (36) Interest and other, net (156) (188) (211) Tax indemnification and other adjustments 55 (67) 65 Non-service net periodic (cost) benefit credit (3) 134 70 Litigation judgment — — 2,351 Earnings from equity interests 245 215 180 Total earnings before provision for taxes $ 2,230 $ 876 $ 3,587 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 Consolidated Balance Sheets were as follows: As of October 31 2023 2022 In millions Compute $ 16,120 $ 16,881 HPC & AI 5,787 5,997 Storage 7,195 7,484 Intelligent Edge 5,352 4,594 Financial Services 14,539 14,837 Corporate Investments and Other 1,401 1,110 Corporate and unallocated assets 6,759 6,220 Total assets $ 57,153 $ 57,123 Major Customers The Company has one customer which represented 11% of the Company's total net revenue in fiscal 2023, primarily within the Intelligent Edge and Compute segments. No single customer represented 10% or more of the Company's total net revenue in fiscal years 2022 and 2021. Geographic Information Net revenue by country is based upon the sales location that predominately represents the customer location. For each of the fiscal years of 2023, 2022 and 2021, other than the U.S., no country represented more than 10% of the Company's net revenue. Net revenue by geographic region was as follows: For the fiscal years ended October 31, 2023 2022 2021 In millions Americas U.S. $ 10,369 $ 9,425 $ 8,850 Americas excluding U.S. 2,208 1,964 1,825 Total Americas 12,577 11,389 10,675 Europe, Middle East and Africa 10,151 10,292 10,329 Asia Pacific and Japan 6,407 6,815 6,780 Total consolidated net revenue $ 29,135 $ 28,496 $ 27,784 Property, plant and equipment, net by country in which the Company's operates was as follows: As of October 31 2023 2022 In millions U.S. $ 2,803 $ 3,035 Other countries 3,186 2,749 Total property, plant and equipment, net $ 5,989 $ 5,784 |
Transformation Programs
Transformation Programs | 12 Months Ended |
Oct. 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 Plan. 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 transformation costs predominantly related to labor restructuring, non-labor restructuring, IT investments, design and execution charges and real estate initiatives. The primary elements of the Cost Optimization and Prioritization Plan have been substantially completed by the end of fiscal 2023. During the third quarter of fiscal 2017, the Company launched the HPE Next Plan 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 primary elements of the HPE Next Plan have been substantially completed by the end of fiscal 2023. Cost Optimization and Prioritization Plan The components of the transformation costs relating to the Cost Optimization and Prioritization Plan were as follows: For the fiscal years ended October 31, 2023 2022 2021 In millions Program management $ 9 $ 27 $ 83 IT costs 26 26 14 Restructuring charges 226 201 598 Total $ 261 $ 254 $ 695 HPE Next Plan The components of transformation costs relating to HPE Next Plan were as follows: For the fiscal years ended October 31, 2023 2022 2021 In millions Program management $ — $ 7 $ 14 IT costs 91 184 174 Restructuring charges 16 13 22 Gains on real estate sales (85) (8) (3) Impairment on real estate assets — 11 4 Other 3 13 29 Total $ 25 $ 220 $ 240 Restructuring Plans On May 19, 2020, the Company's Board of Directors approved a restructuring plan in connection with the Cost Optimization and Prioritization Plan which primarily related to labor restructuring and real estate site exits under non-labor restructuring. The changes to the workforce varied by country, based on business needs, local legal requirements and consultations with employee works councils and other employee representatives, as appropriate. On October 16, 2017, the Company's Board of Directors approved a restructuring plan in connection with the HPE Next Plan, and on September 20, 2018, the Company's Board of Directors approved a revision to that restructuring plan. Headcount exits under the HPE Next Plan were substantially complete as of October 31, 2020. Other restructuring actions primarily related to infrastructure were substantially complete as of October 31, 2022. 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 148 78 6 10 Cash payments (189) (64) (11) (9) Non-cash items 8 (9) — 1 Liability as of October 31, 2023 $ 152 $ 127 $ 6 $ 27 Total costs incurred to date as of October 31, 2023 $ 793 $ 561 $ 1,267 $ 270 Total expected costs to be incurred as of October 31, 2023 $ 820 $ 575 $ 1,267 $ 275 The current restructuring liability related to the transformation programs, reported in the Consolidated Balance Sheets as of October 31, 2023 and 2022, was $180 million and $191 million, respectively, in Accrued restructuring, and $22 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 Consolidated Balance Sheets as of October 31, 2023 and 2022 was $110 million and $124 million, respectively. |
Retirement and Post-Retirement
Retirement and Post-Retirement Benefit Plans | 12 Months Ended |
Oct. 31, 2023 | |
Retirement Benefits [Abstract] | |
Retirement and Post-Retirement Benefit Plans | Retirement and Post-Retirement Benefit Plans Defined Benefit Plans The Company sponsors defined benefit pension plans worldwide, the most significant of which are the United Kingdom (“UK”) and Germany plans. The pension plan in the UK is closed to new entrants, however, members continue to earn benefit accruals. This plan provides benefits based on final pay and years of service and generally requires contributions from members. The German pension program that is open to new hires consists of cash balance plans that provide employer credits as a percentage of pay, certain employee pay deferrals and employer matching contributions. There also are previously closed German pension programs that include cash balance and final average pay plans. These previously closed pension programs comprise the majority of the pension obligations in Germany. Post-Retirement Benefit Plans The Company sponsors retiree health and welfare benefit plans, the most significant of which is in the U.S. Generally, employees hired before August 2008 are eligible for employer credits under the Hewlett Packard Enterprise Retirement Medical Savings Account Plan (“RMSA”) upon attaining age 45. Employer credits to the RMSA available after September 2008 are provided in the form of matching credits on employee contributions made to a voluntary employee beneficiary association. Upon retirement, employees may use these employer credits for the reimbursement of certain eligible medical expenses. Defined Contribution Plans The Company offers various defined contribution plans for U.S. and non-U.S. employees. The Company’s defined contribution expense was approximately $206 million, $196 million and $170 million in fiscal 2023, 2022 and 2021, respectively. U.S. employees are automatically enrolled in the Hewlett Packard Enterprise Company 401(k) Plan (“HPE 401(k) Plan”), when they meet eligibility requirements, unless they decline participation. The HPE 401(k) Plan’s quarterly employer matching contributions are 100% of an employee’s contributions, up to a maximum of 4% of eligible compensation. Pension Benefit Expense The Company's net pension and post-retirement benefit costs that were directly attributable to the eligible employees, retirees and other former employees of Hewlett Packard Enterprise and recognized in the Consolidated Statements of Earnings for fiscal 2023, 2022 and 2021 are presented in the table below. For the fiscal years ended October 31, 2023 2022 2021 2023 2022 2021 Defined Benefit Plans Post-Retirement Benefit Plans In millions Service cost $ 53 $ 78 $ 97 $ 1 $ 1 $ 1 Interest cost (1) 386 154 118 8 4 4 Expected return on plan assets (1) (539) (450) (479) (2) (2) (1) Amortization and Deferrals (1) : Actuarial loss (gain) 160 167 296 (6) (2) (2) Prior service benefit (10) (10) (13) — — — Net periodic benefit cost (credit) 50 (61) 19 1 1 2 Settlement loss and special termination benefits (1) 6 5 7 — — — Total net benefit cost (credit) $ 56 $ (56) $ 26 $ 1 $ 1 $ 2 (1) These non-service components were included in Non-service net periodic benefit (cost) credit in the Consolidated Statements of Earnings. The weighted-average assumptions used to calculate the net benefit cost (credit) in the table above for fiscal 2023, 2022 and 2021 were as follows: For the fiscal years ended October 31, 2023 2022 2021 2023 2022 2021 Defined Benefit Plans Post-Retirement Benefit Plans Discount rate used to determine benefit obligation 3.9 % 1.3 % 1.0 % 6.0 % 3.0 % 2.8 % Discount rate used to determine service cost 4.2 % 1.7 % 1.3 % 5.7 % 2.7 % 2.6 % Discount rate used to determine interest cost 3.9 % 1.1 % 0.8 % 5.9 % 2.6 % 2.3 % Expected increase in compensation levels 3.0 % 2.6 % 2.5 % — — — Expected long-term return on plan assets 5.1 % 3.2 % 3.3 % 4.3 % 3.3 % 2.3 % Interest crediting rate (1) 2.4 % 2.5 % 2.5 % 4.3 % 2.7 % 2.7 % (1) The average assumed interest credited for HPE's cash balance plans and postretirement plans, as applicable. To estimate the service and interest cost components of net periodic benefit cost for defined benefit plans that use the yield curve approach, which represent substantially all of the Company's defined benefit plans, the Company has elected to use a full yield curve approach in the estimation of these components of benefit cost by applying the specific spot rates along the yield curve used in the determination of the benefit obligation to the relevant projected cash flows. Funded Status The funded status of the plans was as follows: As of October 31, 2023 2022 2023 2022 Defined Benefit Plans Post-Retirement Benefit Plans In millions Change in fair value of plan assets: Fair value—beginning of year $ 9,915 $ 15,354 $ 60 $ 60 Transfers — (6) — — Reimbursement of benefit payments (1) (82) — — — Actual return on plan assets (315) (3,176) 4 (3) Employer contributions 179 160 6 6 Participant contributions 24 28 7 6 Benefits paid (449) (429) (9) (9) Settlement (29) (54) — — Currency impact 636 (1,962) — — Fair value—end of year $ 9,879 $ 9,915 $ 68 $ 60 Change in benefit obligation: Projected benefit obligation—beginning of year $ 9,517 $ 14,872 $ 138 $ 161 Addition/deletion of plans (2) 1 — — — Service cost 53 78 1 1 Interest cost 386 154 8 4 Participant contributions 24 28 7 6 Actuarial (gain) loss (756) (3,253) 3 (24) Benefits paid (449) (429) (9) (9) Plan amendments — (1) — — Settlement (29) (54) — — Special termination benefits 2 1 — — Currency impact 613 (1,879) — (1) Projected benefit obligation—end of year $ 9,362 $ 9,517 $ 148 $ 138 Funded status at end of year $ 517 $ 398 $ (80) $ (78) Accumulated benefit obligation $ 9,233 $ 9,376 $ — $ — (1) For fiscal 2023, the German Contractual Trust Arrangements reimbursed HPE for benefit payments of approximately $82 million. (2) Includes the addition/deletion of plans resulting from acquisitions. For the year ended October 31, 2023, the benefit obligation decreased from $9.5 billion to $9.4 billion primarily due to the effects of increasing discount rates and payments of benefits reducing the obligation offset by the interest on the benefit obligation along with the weakening of the U.S. dollar. Pension assets remained flat at $9.9 billion as the reduction due to less than expected asset returns and benefits paid from plan assets was partially offset by the weakening of the U.S. dollar. The weighted-average assumptions used to calculate the projected benefit obligations were as follows: As of October 31, 2023 2022 2023 2022 Defined Benefit Plans Post-Retirement Benefit Plans Discount rate 4.4 % 3.9 % 6.5 % 6.0 % Expected increase in compensation levels 2.9 % 3.0 % — — Interest crediting rate 2.4 % 2.4 % 5.3 % 4.3 % The net amounts recognized for defined benefit and post-retirement benefit plans in the Company's Consolidated Balance Sheets were as follows: As of October 31, 2023 2022 2023 2022 Defined Benefit Plans Post-Retirement Benefit Plans In millions Non-current assets $ 1,313 $ 1,287 $ — $ — Current liabilities (51) (43) (8) (7) Non-current liabilities (745) (846) (72) (71) Funded status at end of year $ 517 $ 398 $ (80) $ (78) The following table summarizes the pre-tax net actuarial loss and prior service benefit recognized in accumulated other comprehensive loss for the defined benefit plans: As of October 31, 2023 Defined Post-Retirement In millions Net actuarial loss (gain) $ 2,669 $ (11) Prior service benefit 3 — Total recognized in accumulated other comprehensive loss $ 2,672 $ (11) Defined benefit plans with projected benefit obligations exceeding the fair value of plan assets were as follows: As of October 31, 2023 2022 In millions Aggregate fair value of plan assets $ 1,969 $ 1,907 Aggregate projected benefit obligation $ 2,765 $ 2,795 Defined benefit plans with accumulated benefit obligations exceeding the fair value of plan assets were as follows: As of October 31, 2023 2022 In millions Aggregate fair value of plan assets $ 1,969 $ 412 Aggregate accumulated benefit obligation $ 2,675 $ 1,206 Fair Value of Plan Assets The Company pays the U.S. defined benefit plan obligations when they come due since these plans are unfunded. The table below sets forth the fair value of non-U.S. defined benefit plan assets by asset category within the fair value hierarchy as of October 31, 2023 and 2022. As of October 31, 2023 As of October 31, 2022 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total In millions Asset Category: Equity Securities U.S. $ 543 $ 12 $ — $ 555 $ 510 $ 9 $ — $ 519 Non-U.S. 110 212 — 322 214 96 — 310 Debt securities Corporate — 1,277 — 1,277 — 961 — 961 Government (1) — 3,883 — 3,883 — 4,853 — 4,853 Other (2) — 661 799 1,460 — 131 932 1,063 Alternative investments Private Equity — 5 41 46 — 4 46 50 Hybrids (3) — 358 177 535 — 785 182 967 Hybrids at NAV (4) 358 377 Common Contractual Funds at NAV (5) Equities at NAV 988 922 Fixed Income at NAV 471 449 Emerging Markets at NAV 284 263 Alternative investments at NAV 1 16 Real Estate Funds (6) 20 327 237 584 22 311 164 497 Insurance Group Annuity Contracts — 88 20 108 — 84 21 105 Cash and Cash Equivalents 222 93 — 315 173 479 — 652 Other (7) 17 23 — 40 27 (13) 1 15 Obligation to return cash received from repurchase agreements (1) — (1,348) — (1,348) — (2,104) — (2,104) Total $ 912 $ 5,591 $ 1,274 $ 9,879 $ 946 $ 5,596 $ 1,346 $ 9,915 (1) Repurchase agreements, primarily in the UK, represent the plans’ short-term borrowing to hedge against interest rate and inflation risks. Investments in approximately $2.3 billion and $3.0 billion of government bonds collateralize this short-term borrowing at October 31, 2023 and 2022, respectively. The plans have an obligation to return the cash after the term of the agreements. Due to the short-term nature of the agreements, the outstanding balance of the obligation approximates fair value. (2) Includes funds that invest primarily in asset-backed securities, mortgage-backed securities, collateralized loan obligations, and/or private debt investments. Primary valuation techniques for level 3 investments include discounted cash flows and broker quotes and/or 3rd party pricing services. Significant unobservable inputs include yields which are determined by considering the market yield of comparable public debt instruments adjusted for estimated losses to reflect where the expected recovery rate would be less than 100%, discount rates, and internal rate of return (IRR). The yields ranged from 6% to 22%, with the weighted average around 10%. In the prior year, the yields ranged from 4% to 18%, with the weighted average around 7%. The discount rates ranged from 4% to 5%, with the weighted average around 4%. In the prior year, the discount rates ranged from 1% to 5%, with the weighted average around 3%. The IRR ranged from 5% to 21%, with the main weighted average around 10%. In the prior year, the IRR ranged from 4% to 11%, with the main weighted average around 8%. Generally, an increase in yield and discounted rates may result in a decrease in the fair value of certain investments. (3) Includes funds, primarily in the UK, that invest in both private and public equities, as well as emerging markets across all sectors. The funds also hold fixed income and derivative instruments to hedge interest rate and inflation risk. In addition, the funds include units in transferable securities, collective investment schemes, money market funds, asset-backed income, cash, and deposits. Primary valuation techniques for level 3 investments include discounted cash flows and book value or net asset value. Significant unobservable inputs include discount rates. The discount rates ranged from 3% to 28%, with the weighted average around 14%. In the prior year, the discount rates ranged from 3% to 30%, with the weighted average around 12%. Generally, an increase in discount rates may result in a decrease in the fair value of certain investments. (4) Includes a pooled fund in the UK, that seeks a rate of return with direct or indirect linkage to UK inflation by investing in vehicles including bonds, long lease property, income strips, asset-backed securities, and index linked assets. Units are available for subscription on the first business day of each calendar month at net asset value. There are no redemption restrictions or future commitments on these investments. (5) Common Contractual Funds (“CCFs”) are investment arrangements in which institutional investors pool their assets. Units may be acquired in four different sub-funds focused on equities, fixed income, alternative investments, and emerging markets. Each sub-fund is invested in accordance with the fund's investment objective and units are issued in relation to each sub-fund. While the sub-funds are not publicly traded, the custodian strikes a net asset value either once or twice a month, depending on the sub-fund. There are no redemption restrictions or future commitments on these investments. (6) Includes funds, primarily in Germany, that invest in a diversified portfolio of European real estate assets exposed to logistics real estate properties, food retailing properties, residential and commercial properties, and properties under development. Primary valuation techniques for level 3 investments include the income capitalization approach and cost approach. Significant unobservable inputs include rental yield and IRR. The rental yield rates ranged from 4% to 6%, with the weighted average around 4%. In the prior year, the rental yield rates ranged from 3% to 6%, with the weighted average around 4%. The IRR ranged from 5% to 8%, with the main weighted average around 7%. In the prior year, the IRR ranged from 4% to 7%, with the main weighted average around 6%. Generally, an increase in rental yield rates may result in a decrease in the fair value of certain investments. (7) Includes life insurance investment policies, unsettled transactions, and derivative instruments. As of October 31, 2023, the derivative instruments include synthetic equity swaps held by the UK plans with equity exposure of $272 million. As of October 31, 2023 post-retirement benefit plan assets of $68 million were invested in publicly traded registered investment entities of which $55 million are classified within Level 1 and $13 million within Level 2 of the fair value hierarchy. As of October 31, 2022 post-retirement benefit plan assets of $60 million were invested in publicly traded registered investment entities of which $48 million are classified within Level 1 and $12 million within Level 2 of the fair value hierarchy. Changes in fair value measurements of Level 3 investments for the non-U.S. defined benefit plans were as follows: For the fiscal year ended October 31, 2023 Alternative Investments Debt-Other Private Hybrids Real Insurance Other Total In millions Balance at beginning of year $ 932 $ 46 $ 182 $ 164 $ 21 $ 1 $ 1,346 Actual return on plan assets: Relating to assets held at the reporting date 72 (8) 2 (6) (1) — 59 Relating to assets sold during the period — 3 — — — — 3 Purchases, sales, and settlements (205) — (7) 79 — (1) (134) Balance at end of year $ 799 $ 41 $ 177 $ 237 $ 20 $ — $ 1,274 For the fiscal year ended October 31, 2022 Alternative Investments Debt-Other Private Hybrids Real Insurance Other Total In millions Balance at beginning of year $ 748 $ 46 $ 116 $ 48 $ 33 $ 1 $ 992 Actual return on plan assets: Relating to assets held at the reporting date (97) — 21 (3) (11) — (90) Relating to assets sold during the period — 7 — — — — 7 Purchases, sales, and settlements 281 (7) 45 119 (1) — 437 Balance at end of year $ 932 $ 46 $ 182 $ 164 $ 21 $ 1 $ 1,346 The following is a description of the valuation methodologies used to measure plan assets at fair value. Investments in publicly traded equity securities are valued using the closing price on the measurement date as reported on the stock exchange on which the individual securities are traded. For corporate, government backed debt securities, and some other investments, fair value is based on observable inputs of comparable market transactions. The valuation of certain real estate funds, insurance group annuity contracts and alternative investments, such as limited partnerships and joint ventures, may require significant management judgment and involves a level of uncertainty. The valuation is generally based on fair value as reported by the asset manager and adjusted for cash flows, if necessary. In making such an assessment, a variety of factors are reviewed by management, including, but are not limited to, the timeliness of fair value as reported by the asset manager and changes in general economic and market conditions subsequent to the last fair value reported by the asset manager. The use of different techniques or assumptions to estimate fair value could result in a different fair value measurement at the reporting date. Cash and cash equivalents includes money market funds, which are valued based on cost, which approximates fair value. Other than those assets that have quoted prices from an active market, investments are generally classified in Level 2 or Level 3 of the fair value hierarchy based on the lowest level input that is significant to the fair value measure in its entirety. Investments measured using net asset value as a practical expedient are not categorized within the fair value hierarchy. Plan Asset Allocations The weighted-average target and actual asset allocations across the benefit plans at the respective measurement dates for the non-U.S. defined benefit plans were as follows: Defined Benefit Plans Plan Assets 2023 Target Allocation 2023 2022 Public equity securities 21.8 % 20.3 % Private/hybrid equity securities 9.5 % 14.2 % Real estate and other (1) 6.3 % 5.2 % Equity-related investments (1) 46.1 % 37.6 % 39.7 % Debt securities 52.0 % 59.2 % 53.7 % Cash and cash equivalents 1.9 % 3.2 % 6.6 % Total 100.0 % 100.0 % 100.0 % (1) Included in Real estate and other investments are synthetic equity swaps with equity exposure of $272 million, which is held in the UK plans as of October 31, 2023. For the Company's post-retirement benefit plans, approximately 81% of the plan assets are invested in cash and cash equivalents and approximately 19% in multi-asset credit investments which consists primarily of investment grade credit, emerging market debt and high yield bonds. Investment Policy The Company's investment strategy is to seek a competitive rate of return relative to an appropriate level of risk depending on the funded status of each plan and the timing of expected benefit payments. The majority of the plans’ investment managers employ active investment management strategies with the goal of outperforming the broad markets in which they invest. Risk management practices include diversification across asset classes and investment styles and periodic rebalancing toward asset allocation targets. A number of the plans’ investment managers are authorized to utilize derivatives for investment or liability exposures, and the Company may utilize derivatives to effect asset allocation changes or to hedge certain investment or liability exposures. Asset allocation decisions are typically made by an independent board of trustees for the specific plan. Investment objectives are designed to generate returns that will enable the plan to meet its future obligations. In some countries, local regulations may restrict asset allocations, typically leading to a higher percentage of investment in fixed income securities than would otherwise be deployed. The Company reviews the investment strategy and provides a recommended list of investment managers for each country plan, with final decisions on asset allocation and investment managers made by the board of trustees or investment committees for the specific plan. Basis for Expected Long-Term Rate of Return on Plan Assets The expected long-term rate of return on plan assets reflects the expected returns for each major asset class in which the plan invests and the weight of each asset class in the target mix. Expected asset returns reflect the current yield on government bonds, risk premiums for each asset class and expected real returns, which considers each country’s specific inflation outlook. Because the Company’s investment policy is to employ primarily active investment managers who seek to outperform the broader market, the expected returns are adjusted to reflect the expected additional returns, net of fees. Employer Contributions and Funding Policy During fiscal 2023, the Company contributed approximately $179 million to its non-U.S. pension plans and paid $6 million to cover benefit claims under the Company’s post-retirement benefit plans. During fiscal 2024, the Company expects to contribute approximately $182 million to its non-U.S. pension plans Estimated Future Benefits Payments As of October 31, 2023, estimated future benefits payments for the Company's retirement plans were as follows: Fiscal year Defined Post-Retirement In millions 2024 $ 558 $ 12 2025 523 13 2026 536 13 2027 552 12 2028 573 13 Next five fiscal years to October 31, 2033 $ 2,999 $ 63 |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Oct. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation On April 14, 2021 (the “Approval Date”), shareholders of the Company approved the Hewlett Packard Enterprise Company 2021 Stock Incentive Plan (the “2021 Plan”) that replaced the Company’s 2015 Stock Incentive Plan (the “2015 Plan”). The 2021 Plan provides for the grant of various types of awards including restricted stock awards, stock options and performance-based awards. These awards generally vest over 3 years from the grant date. The maximum number of shares as of the Approval Date that may be delivered to the participants under the 2021 Plan shall not exceed 7 million shares, plus 35.8 million shares that were available for grant under the 2015 Plan and any awards granted under the 2015 Plan prior to the Approval Date that were cash-settled, forfeited, terminated, or lapsed after the Approval Date. On April 5, 2022, shareholders of the Company approved an amendment to the 2021 Plan thereby increasing the overall number of shares available for issuance by 15 million shares. As of October 31, 2023, the Company had remaining authorization of 35.9 million shares under the 2021 Plan. Stock-Based Compensation Expense Stock-based compensation expense and the resulting tax benefits were as follows: For the fiscal years ended October 31, 2023 2022 2021 In millions Stock-based compensation expense $ 428 $ 391 $ 382 Income tax benefit (92) (75) (70) Stock-based compensation expense, net of tax $ 336 $ 316 $ 312 Stock-based compensation expense as presented in the table above is recorded within the following cost and expense lines in the Consolidated Statements of Earnings. For the fiscal years ended October 31, 2023 2022 2021 In millions Cost of sales $ 47 $ 46 $ 40 Research and development 161 143 124 Selling, general and administrative 220 202 208 Acquisition, disposition and other related charges — — 10 Stock-based compensation expense $ 428 $ 391 $ 382 Employee Stock Purchase Plan Effective November 1, 2015, the Company adopted the Hewlett Packard Enterprise Company 2015 Employee Stock Purchase Plan (“ESPP”). The total number of shares of Company's common stock authorized under the ESPP was 80 million. The ESPP allows eligible employees to contribute up to 10% of their eligible compensation to purchase Hewlett Packard Enterprise's common stock. The ESPP provides for a discount not to exceed 15% and an offering period up to 24 months. The Company currently offers 6-month offering periods during which employees have the ability to purchase shares at 95% of the closing market price on the purchase date. No stock-based compensation expense was recorded in connection with those purchases, as the criteria of a non-compensatory plan were met. Restricted Stock Units Restricted stock units have forfeitable dividend equivalent rights equal to the dividend paid on common stock. Restricted stock units do not have the voting rights of common stock, and the shares underlying restricted stock units are not considered issued and outstanding upon grant. The fair value of the restricted stock units is the closing price of the Company's common stock on the grant date of the award. The Company expenses the fair value of restricted stock units ratably over the period during which the restrictions lapse. The following table summarizes restricted stock unit activity for the year ended October 31, 2023: Shares Weighted-Average Grant Date Fair Value Per Share In thousands Outstanding at beginning of year 51,902 $ 14 Granted and replacement awards for acquisitions 30,088 16 Vested (24,473) 14 Forfeited/canceled (3,128) 15 Outstanding at end of year 54,389 $ 15 The total grant date fair value of restricted stock awards vested for Company employees in fiscal 2023, 2022, and 2021 was $319 million, $262 million and $271 million, respectively. As of October 31, 2023, there was $325 million of unrecognized pre-tax stock-based compensation expense related to unvested restricted stock units, which the Company expects to recognize over the remaining weighted-average vesting period of 1.3 years. Performance Restricted Units The Company issues performance stock units (“PSU”) that vest on the satisfaction of service and performance conditions. The fair value of the PSUs is the closing price of the Company's common stock on the grant date of the award. The Company also issues performance-adjusted restricted stock units (“PARSU”) that vest only on the satisfaction of service, performance and market conditions. The Company estimates the fair value of PARSUs subject to performance-contingent vesting conditions using the Monte Carlo simulation model. The expenses associated with these performance restricted units were not material for any of the periods presented. Stock Options Stock options granted under the Plan are generally non-qualified stock options, but the Plan permits some options granted to qualify as incentive stock options under the U.S. Internal Revenue Code. The exercise price of a stock option is equal to the closing price of the Company's common stock on the option grant date. The majority of the stock options issued by the Company contain only service vesting conditions. The Company has also issued performance-contingent stock options that vest only on the satisfaction of both service and market conditions. The Company did not issue stock options in fiscal 2023 and 2022. Stock options assumed through acquisitions were not material for fiscal 2023. The expenses associated with stock options were not material for any of the periods presented. |
Taxes on Earnings
Taxes on Earnings | 12 Months Ended |
Oct. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Taxes on Earnings | Taxes on Earnings Provision for Taxes The domestic and foreign components of Net earnings from operations before taxes were as follows: For the fiscal years ended October 31, 2023 2022 2021 In millions U.S. $ (1,105) $ (1,138) $ (1,128) Non-U.S. 3,335 2,014 4,715 $ 2,230 $ 876 $ 3,587 Foreign earnings in fiscal 2021 were higher as compared to fiscal 2023 and 2022, primarily as a result of the income from the Itanium litigation judgment. The Provision for taxes on Net earnings from operations were as follows: For the fiscal years ended October 31, 2023 2022 2021 In millions U.S. federal taxes: Current $ — $ 12 $ 26 Deferred (88) (98) (79) Non-U.S. taxes: Current 256 288 305 Deferred 23 (143) (116) State taxes: Current 16 (43) (4) Deferred (2) (8) 28 $ 205 $ 8 $ 160 The differences between the U.S. federal statutory income tax rate and the Company's effective tax rate were as follows: For the fiscal years ended October 31, 2023 2022 2021 U.S. federal statutory income tax rate 21.0 % 21.0 % 21.0 % State income taxes, net of federal tax benefit 0.9 % 2.8 % 0.7 % Lower rates in other jurisdictions, net (4.4) % (0.9) % (7.6) % Valuation allowance (2.8) % (31.5) % (10.0) % U.S. permanent differences (1.5) % 6.0 % 3.6 % U.S. R&D credit (2.1) % (5.1) % (1.3) % Uncertain tax positions (2.0) % (15.6) % (0.9) % Goodwill impairment — % 21.5 % — % Tax law changes — % — % (1.1) % Other, net 0.1 % 2.7 % 0.1 % 9.2 % 0.9 % 4.5 % The jurisdictions with favorable tax rates that had the most significant impact on the Company's effective tax rate in the periods presented include Puerto Rico and Singapore. In fiscal 2023, the Company recorded $131 million of net income tax benefits related to various items discrete to the year. These amounts primarily included $104 million of income tax benefits related to transformation costs, and acquisition, disposition and other related charges and $19 million of net excess tax benefits related to stock-based compensation. In fiscal 2022, the Company recorded $454 million of net income tax benefits related to various items discrete to the year. These amounts primarily included $150 million of income tax benefits related to releases of foreign valuation allowances, $99 million of income tax benefits related to transformation costs, and acquisition, disposition and other related charges, $43 million of income tax benefits related to the settlement of U.S. tax audit matters, $42 million of income tax benefits related to the release of U.S. passive foreign tax credit valuation allowances, $30 million of income tax benefits related to the change in pre-separation tax liabilities, primarily those for which the Company shared joint and several liability with HP Inc. and for which the Company was indemnified by HP Inc., $27 million of income tax benefits related to the utilization of capital losses which had a full valuation allowance, $12 million of income tax benefits as a result of the fiscal 2021 U.S. tax return filing primarily from the decrease in GILTI, and $11 million of net income tax benefits related to settlements and ongoing discussions in foreign tax audit matters. In fiscal 2021, the Company recorded $294 million of net income tax benefits related to various items discrete to the year. These amounts primarily included $180 million of income tax benefits related to transformation costs, and acquisition, disposition and other related charges, $157 million of income tax benefits related to releases of foreign valuation allowances, $39 million of income tax benefits related to tax rate changes on deferred taxes, and $32 million of income tax benefits related to the change in pre-separation tax liabilities, primarily those for which the Company shared joint and several liability with HP Inc. and for which the Company was indemnified by HP Inc. These benefits were partially offset by $337 million of net income tax charges associated with income from the Itanium litigation judgment, against which $244 million of income tax attributes previously subject to a valuation allowance were utilized, resulting in a net tax expense of $93 million. As a result of certain employment actions and capital investments the Company has undertaken, income from manufacturing and services in certain countries is subject to reduced tax rates through 2039. The gross foreign income tax benefits attributable to these actions and investments were $857 million ($0.65 diluted net EPS) in fiscal 2023, $832 million ($0.63 diluted net EPS) in fiscal 2022, and $889 million ($0.67 diluted net EPS) in fiscal 2021. Refer to Note 16, “Net Earnings Per Share” for details on shares used to compute diluted net EPS. Uncertain Tax Positions A reconciliation of unrecognized tax benefits is as follows: As of October 31, 2023 2022 2021 In millions Balance at beginning of year $ 674 $ 2,131 $ 2,159 Increases: For current year's tax positions 67 81 24 For prior years' tax positions 20 41 64 Decreases: For prior years' tax positions (2) (48) (31) Statute of limitations expiration (4) (12) (44) Settlements with taxing authorities (83) (1,491) (15) Settlements related to joint and several positions indemnified by HP Inc. — (28) (26) Balance at end of year $ 672 $ 674 $ 2,131 Up to $354 million, $386 million and $688 million of the Company's unrecognized tax benefits at October 31, 2023, 2022 and 2021, respectively, would affect its effective tax rate if realized in their respective periods. During the first quarter of fiscal 2022, the Company effectively settled with the U.S. Internal Revenue Service (“IRS”) for fiscal 2016, primarily contributing to the reduction in the Company's unrecognized tax benefits of $1.5 billion, which was predominantly related to the timing of intercompany royalty revenue recognition which does not affect the Company’s effective tax rate. The Company recognizes interest income from favorable settlements and interest expense and penalties accrued on unrecognized tax benefits in Provision for taxes in the Consolidated Statements of Earnings. The Company recognized $25 million and $55 million of interest income and $17 million of interest expense in fiscal 2023, 2022, and 2021, respectively. As of October 31, 2023 and 2022, the Company had accrued $56 million and $81 million, respectively, for interest and penalties in the Consolidated Balance Sheets. The Company is subject to income tax in the U.S. and approximately 85 other countries and is subject to routine corporate income tax audits in many of these jurisdictions. The Company engages in continuous discussion and negotiation with taxing authorities regarding tax matters in various jurisdictions. The Company is no longer subject to U.S. federal tax audits for years prior to 2017. The IRS is conducting audits of the Company's fiscal 2017 through 2022 U.S. federal income tax returns. During the fourth quarter of fiscal 2023, the IRS issued notices of proposed adjustments (“NOPAs”) for fiscal 2017, 2018, and 2019 relating to HPE’s intercompany transfer pricing. After the close of fiscal 2023, the IRS issued a Revenue Agent Report (“RAR”) finalizing their position on the NOPAs for the same issues and same fiscal years. The IRS is seeking to increase taxable income across the three fiscal years by $904 million. As of the balance sheet date, HPE has sufficient tax credit carryforwards to offset any incremental tax liability from the adjustments in the RAR. However, HPE disagrees with the IRS’ adjustments and believes the positions taken on its tax returns are more likely than not to prevail on technical merits, and the Company will defend these positions through the IRS administrative processes, as necessary. Accordingly, no changes have been made to the Company’s reserves for uncertain tax positions in fiscal 2023 relating to the IRS’ adjustments. With respect to major state and foreign tax jurisdictions, the Company is no longer subject to tax authority examinations for years prior to 2005. However, it is reasonably possible that certain foreign and state tax issues may be concluded in the next 12 months, including issues involving resolution of certain intercompany transactions and other matters. The Company believes it is reasonably possible that its existing unrecognized tax benefits may be reduced by an amount up to $16 million within the next 12 months. The Company believes it has provided adequate reserves for all tax deficiencies or reductions in tax benefits that could result from federal, state and foreign tax audits. The Company regularly assesses the likely outcomes of these audits in order to determine the appropriateness of the Company's tax provision. The Company adjusts its uncertain tax positions to reflect the impact of negotiations, settlements, rulings, advice of legal counsel, and other information and events pertaining to a particular audit. However, income tax audits are inherently unpredictable and there can be no assurance that the Company will accurately predict the outcome of these audits. The amounts ultimately paid on resolution of an audit could be materially different from the amounts previously included in the Provision for taxes and therefore the resolution of one or more of these uncertainties in any particular period could have a material impact on net earnings or cash flows. The Company has not provided for U.S. federal and state income and foreign withholding taxes on $9.4 billion of undistributed earnings and basis differences from non-U.S. operations as of October 31, 2023 because the Company intends to reinvest such earnings indefinitely outside of the U.S. Determination of the amount of unrecognized deferred tax liability related to these earnings and basis differences is not practicable. The Company will remit non-indefinitely reinvested earnings of its non-U.S. subsidiaries for which deferred U.S. state income and foreign withholding taxes have been provided where excess cash has accumulated and the Company determines that it is advantageous for business operations, tax or cash management reasons. Deferred Income Taxes Deferred income taxes result from temporary differences between the amount of assets and liabilities recognized for financial reporting and tax purposes. The significant components of deferred tax assets and deferred tax liabilities were as follows: As of October 31, 2023 2022 In millions Deferred tax assets: Loss and credit carryforwards $ 5,802 $ 7,222 Inventory valuation 90 87 Intercompany prepayments 325 321 Warranty 49 61 Employee and retiree benefits 184 247 Restructuring 52 55 Deferred revenue 658 601 Intangible assets 107 113 Capitalized R&D 44 — Lease liabilities 209 185 Other 196 269 Total deferred tax assets 7,716 9,161 Valuation allowance (5,294) (6,817) Total deferred tax assets net of valuation allowance 2,422 2,344 Deferred tax liabilities: Unremitted earnings of foreign subsidiaries (190) (170) ROU assets (192) (167) Fixed assets (102) (200) Total deferred tax liabilities (484) (537) Net deferred tax assets and liabilities $ 1,938 $ 1,807 Deferred tax assets and liabilities included in the Consolidated Balance Sheets are as follows: As of October 31, 2023 2022 In millions Deferred tax assets $ 2,264 $ 2,127 Deferred tax liabilities (326) (320) Deferred tax assets net of deferred tax liabilities $ 1,938 $ 1,807 As of October 31, 2023, the Company had $386 million, $3.1 billion and $20.2 billion of federal, state and foreign net operating loss carryforwards, respectively. Amounts included in state and foreign net operating loss carryforwards will begin to expire in 2024; federal net operating losses can carry forward indefinitely. The Company has provided a valuation allowance of $147 million and $3.9 billion for deferred tax assets related to state and foreign net operating losses carryforwards, respectively. As of October 31, 2023, the Company also had $13 million, $5.6 billion, and $85 million of federal, state, and foreign capital loss carryforwards, respectively. Amounts included in federal and state capital loss carryforwards will begin to expire in 2028; foreign capital losses can carry forward indefinitely. The Company has provided a valuation allowance of $7 million and $25 million for deferred tax assets related to state and foreign capital loss carryforwards, respectively. As of October 31, 2023, the Company had recorded deferred tax assets for various tax credit carryforwards as follows: Carryforward Valuation Allowance Initial Year of Expiration In millions U.S. foreign tax credits $ 904 $ (875) 2026 U.S. research and development and other credits 215 — 2029 Tax credits in state and foreign jurisdictions 164 (114) 2024 Balance at end of year $ 1,283 $ (989) Total valuation allowances decreased by $1.5 billion in fiscal 2023, primarily from the expiration of U.S. federal capital loss carryforwards. Tax Matters Agreement and Other Income Tax Matters In connection with the completed separations and mergers of the former Enterprise Services business with DXC Technology Company (“DXC”) (the “Everett Transaction” or “Everett”) and the Software Segment with Micro Focus International plc (“Micro Focus”) (the “Seattle Transaction” or “Seattle”), the Company entered into a DXC Tax Matters Agreement with DXC and a Micro Focus Tax Matters Agreement with Micro Focus, respectively. See Note 18, “Guarantees, Indemnifications and Warranties,” for a description of the DXC Tax Matters Agreement and Micro Focus Tax Matters Agreement. |
Balance Sheet Details
Balance Sheet Details | 12 Months Ended |
Oct. 31, 2023 | |
Balance Sheet Related Disclosures [Abstract] | |
Balance Sheet Details | Balance Sheet Details Cash, Cash Equivalents and Restricted Cash As of October 31, 2023 2022 In millions Cash and cash equivalents $ 4,270 $ 4,163 Restricted cash 311 600 Total $ 4,581 $ 4,763 Accounts Receivable, Net As of October 31, 2023 2022 In millions Accounts receivable $ 3,254 $ 3,881 Unbilled receivable 264 245 Allowances (37) (25) Total $ 3,481 $ 4,101 The allowance for doubtful accounts related to accounts receivable and changes therein were as follows: As of October 31, 2023 2022 2021 In millions Balance at beginning of year $ 25 $ 23 $ 46 Provision for credit losses 29 25 11 Adjustments to existing allowances, including write offs (17) (23) (34) Balance at end of year $ 37 $ 25 $ 23 The Company has third-party revolving short-term financing arrangements intended to facilitate the working capital requirements of certain customers. The Company recorded an obligation of $80 million, $88 million and $65 million in Notes payable and short-term borrowings in its Consolidated Balance Sheets as of October 31, 2023, 2022 and 2021, respectively, related to the trade receivables sold and collected from the third-party for which the revenue recognition was deferred. For arrangements involving an element of recourse, the fair value of the recourse obligation is measured using market data from similar transactions and reported as a current liability in Other accrued liabilities in the Consolidated Balance Sheets. The activity related to Hewlett Packard Enterprise's revolving short-term financing arrangements was as follows: As of October 31, 2023 2022 2021 In millions Balance at beginning of period (1) $ 163 $ 336 $ 122 Trade receivables sold 4,097 4,130 4,190 Cash receipts (4,185) (4,292) (3,975) Foreign currency and other 8 (11) (1) Balance at end of period (1) $ 83 $ 163 $ 336 (1) Beginning and ending balances represent amounts for trade receivables sold but not yet collected. Inventory As of October 31, 2023 2022 In millions Purchased parts and fabricated assemblies $ 2,940 $ 2,974 Finished goods 1,667 2,187 Total $ 4,607 $ 5,161 Property, Plant and Equipment, net As of October 31, 2023 2022 In millions Land $ 66 $ 74 Buildings and leasehold improvements 1,521 1,503 Machinery and equipment, including equipment held for lease 10,382 9,729 Gross property, plant and equipment 11,969 11,306 Accumulated depreciation (5,980) (5,522) Property, plant and equipment, net (1) $ 5,989 $ 5,784 (1) This balance includes $606 million and $534 million of internal use software, net as of October 31, 2023 and 2022, respectively. Depreciation expense was $2.3 billion, $2.2 billion, and $2.2 billion in fiscal 2023, 2022 and 2021, respectively. Long-Term Financing Receivables and Other Assets As of October 31, 2023 2022 In millions Financing receivables, net $ 5,028 $ 4,512 Deferred tax assets 2,264 2,127 Prepaid pension 1,313 1,287 ROU assets 980 854 Other 1,792 1,757 Total $ 11,377 $ 10,537 Other Accrued Liabilities As of October 31, 2023 2022 In millions Sales and marketing programs $ 1,070 $ 1,052 Value-added and property taxes 786 902 Collateral payable 207 508 Operating lease liabilities 194 168 Warranty 167 192 Contract manufacturer liabilities 71 332 Other 1,666 1,471 Total $ 4,161 $ 4,625 Other Non-Current Liabilities As of October 31, 2023 2022 In millions Deferred revenue $ 3,281 $ 2,955 Operating lease liabilities 966 851 Pension, post-retirement, and post-employment 841 944 Deferred tax liabilities 326 320 Taxes on earnings 233 271 Other 899 846 Total $ 6,546 $ 6,187 Contract Liabilities and Remaining Performance Obligations As of October 31, 2023 and 2022, current deferred revenue of $3.6 billion and $3.4 billion, respectively, were recorded in Deferred revenue, and non-current deferred revenue of $3.3 billion and $3.0 billion, respectively, were recorded in Other non-current liabilities in the Consolidated Balance Sheets. During fiscal 2023, approximately $3.4 billion of d eferred revenue as of October 31, 2022 was recognized as revenue. 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 October 31, 2023, the Company expects to recognize approximately 49% of the aggregate amount of remaining performance obligations, or deferred revenue, of $6.9 billion revenue over the next twelve months with the remainder to be recognized thereafter. Costs to obtain a Contract As of October 31, 2023, the current and non-current portions of the capitalized costs to obtain a contract were $86 million and $138 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 Consolidated Balance Sheets. In fiscal 2023 and 2022, the Company amortized $94 million and $83 million, respectively, of the capitalized costs to obtain a contract which are included in Selling, general and administrative expense in the Consolidated Statements of Earnings. |
Accounting for Leases as a Less
Accounting for Leases as a Lessee | 12 Months Ended |
Oct. 31, 2023 | |
Leases [Abstract] | |
Accounting for Leases as a Lessee | Accounting for Leases as a Lessee Components of lease cost included in the Consolidated Statement of Earnings were as follows: For the fiscal years ended October 31, 2023 2022 2021 In millions Operating lease cost $ 200 $ 197 $ 207 Finance lease cost 4 5 5 Sublease rental income (23) (27) (35) Total lease cost $ 181 $ 175 $ 177 In fiscal 2023, the Company recorded $85 million of net gain from sale and leaseback transactions. The ROU assets and lease liabilities for operating and finance leases included in the Consolidated Balance Sheets were as follows: As of October 31, Balance Sheet Classification 2023 2022 In millions Operating Leases ROU Assets Long-term financing receivables and other assets $ 980 $ 854 Lease Liabilities: Operating lease liabilities – current Other accrued liabilities 194 168 Operating lease liabilities – non-current Other non-current liabilities 966 851 Total operating lease liabilities $ 1,160 $ 1,019 Finance Leases Finance lease ROU Assets: Property, plant and equipment, net Gross finance lease ROU assets $ 26 $ 32 Less: Accumulated depreciation (14) (11) Net finance lease ROU assets $ 12 $ 21 Lease Liabilities: Finance lease liabilities – current Notes payable and short-term borrowings $ 5 $ 5 Finance lease liabilities – non-current Long-term debt 38 43 Total finance lease liabilities $ 43 $ 48 Total ROU assets $ 992 $ 875 Total lease liabilities $ 1,203 $ 1,067 The weighted-average remaining lease term and the weighted-average discount rate for the operating and finance leases were as follows: As of October 31, 2023 2022 Operating Leases Finance Leases Operating Leases Finance Leases Weighted-average remaining lease term (in years) 7.2 6.5 7.8 7.5 Weighted-average discount rate 3.8 % 3.5 % 3.2 % 3.5 % Supplemental cash flow information related to leases was as follows: For the fiscal years ended October 31, Cash Flow Statement Activity 2023 2022 2021 In millions Cash outflows from operating leases Net cash used in operating activities $ 219 $ 214 $ 220 ROU assets obtained in exchange for new operating lease liabilities Non-cash activities $ 251 $ 195 $ 248 The following tables shows the future payments on the Company's operating and finance leases: As of October 31, 2023 Operating Leases Finance Leases Fiscal year In millions 2024 $ 234 $ 7 2025 215 7 2026 191 7 2027 176 7 2028 151 8 Thereafter 365 12 Total future lease payments $ 1,332 $ 48 Less: imputed interest (172) (5) Total lease liabilities $ 1,160 $ 43 As of October 31, 2023, the Company entered into $516 million of operating leases that have not yet commenced and are not yet recorded on the Consolidated Balance Sheets. These operating leases are scheduled to commence during fiscal 2024 and contain lease terms from 5 to 10 years. |
Accounting for Leases as a Lessee | Accounting for Leases as a Lessee Components of lease cost included in the Consolidated Statement of Earnings were as follows: For the fiscal years ended October 31, 2023 2022 2021 In millions Operating lease cost $ 200 $ 197 $ 207 Finance lease cost 4 5 5 Sublease rental income (23) (27) (35) Total lease cost $ 181 $ 175 $ 177 In fiscal 2023, the Company recorded $85 million of net gain from sale and leaseback transactions. The ROU assets and lease liabilities for operating and finance leases included in the Consolidated Balance Sheets were as follows: As of October 31, Balance Sheet Classification 2023 2022 In millions Operating Leases ROU Assets Long-term financing receivables and other assets $ 980 $ 854 Lease Liabilities: Operating lease liabilities – current Other accrued liabilities 194 168 Operating lease liabilities – non-current Other non-current liabilities 966 851 Total operating lease liabilities $ 1,160 $ 1,019 Finance Leases Finance lease ROU Assets: Property, plant and equipment, net Gross finance lease ROU assets $ 26 $ 32 Less: Accumulated depreciation (14) (11) Net finance lease ROU assets $ 12 $ 21 Lease Liabilities: Finance lease liabilities – current Notes payable and short-term borrowings $ 5 $ 5 Finance lease liabilities – non-current Long-term debt 38 43 Total finance lease liabilities $ 43 $ 48 Total ROU assets $ 992 $ 875 Total lease liabilities $ 1,203 $ 1,067 The weighted-average remaining lease term and the weighted-average discount rate for the operating and finance leases were as follows: As of October 31, 2023 2022 Operating Leases Finance Leases Operating Leases Finance Leases Weighted-average remaining lease term (in years) 7.2 6.5 7.8 7.5 Weighted-average discount rate 3.8 % 3.5 % 3.2 % 3.5 % Supplemental cash flow information related to leases was as follows: For the fiscal years ended October 31, Cash Flow Statement Activity 2023 2022 2021 In millions Cash outflows from operating leases Net cash used in operating activities $ 219 $ 214 $ 220 ROU assets obtained in exchange for new operating lease liabilities Non-cash activities $ 251 $ 195 $ 248 The following tables shows the future payments on the Company's operating and finance leases: As of October 31, 2023 Operating Leases Finance Leases Fiscal year In millions 2024 $ 234 $ 7 2025 215 7 2026 191 7 2027 176 7 2028 151 8 Thereafter 365 12 Total future lease payments $ 1,332 $ 48 Less: imputed interest (172) (5) Total lease liabilities $ 1,160 $ 43 As of October 31, 2023, the Company entered into $516 million of operating leases that have not yet commenced and are not yet recorded on the Consolidated Balance Sheets. These operating leases are scheduled to commence during fiscal 2024 and contain lease terms from 5 to 10 years. |
Accounting for Leases as a Le_2
Accounting for Leases as a Lessor | 12 Months Ended |
Oct. 31, 2023 | |
Leases [Abstract] | |
Accounting for Leases as a Lessor | Accounting for Leases as a Lessor Financing Receivables 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 October 31, 2023 2022 In millions Minimum lease payments receivable $ 9,363 $ 8,686 Unguaranteed residual value 438 380 Unearned income (987) (707) Financing receivables, gross 8,814 8,359 Allowance for credit losses (243) (325) Financing receivables, net 8,571 8,034 Less: current portion (3,543) (3,522) Amounts due after one year, net $ 5,028 $ 4,512 As of October 31, 2023, scheduled maturities of the Company's minimum lease payments receivable were as follows: As of October 31, 2023 Fiscal year In millions 2024 $ 4,058 2025 2,512 2026 1,612 2027 819 2028 278 Thereafter 84 Total undiscounted cash flows $ 9,363 Present value of lease payments (recognized as finance receivables) $ 8,376 Difference between undiscounted cash flows and discounted cash flows $ 987 Sale of Financing Receivables The Company entered into arrangements to transfer the contractual payments due under certain financing receivables to third party financial institutions. During the fiscal years ended October 31, 2023 and 2022, the Company sold $237 million and $183 million, respectively, of financing receivables. Credit Quality Indicators Due to the homogeneous nature of its leasing transactions, the Company manages its financing receivables on an aggregate basis when assessing and monitoring credit risk. Credit risk is generally diversified due to the large number of entities comprising the Company's customer base and their dispersion across many different industries and geographic regions. The Company evaluates the credit quality of an obligor at lease inception and monitors that credit quality over the term of a transaction. The Company assigns risk ratings to each lease based on the creditworthiness of the obligor and other variables that augment or mitigate the inherent credit risk of a particular transaction and periodically updates the risk ratings when there is a change in the underlying credit quality. Such variables include the underlying value and liquidity of the collateral, the essential use of the equipment, the term of the lease, and the inclusion of credit enhancements, such as guarantees, letters of credit or security deposits. The credit risk profile of gross financing receivables, based on internal risk ratings as of October 31, 2023, presented on an amortized cost basis by year of origination was as follows: As of October 31, 2023 Risk Rating Low Moderate High Fiscal Year In millions 2023 $ 2,100 $ 1,196 $ 31 2022 1,681 1,052 51 2021 868 645 57 2020 336 285 35 2019 and prior 155 223 99 Total $ 5,140 $ 3,401 $ 273 The credit risk profile of gross financing receivables, based on internal risk ratings as of October 31, 2022, 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 and changes therein were as follows: As of October 31, 2023 2022 2021 In millions Balance at beginning of period $ 325 $ 228 $ 154 Adjustment for adoption of the new credit loss standard — — 28 Provision for credit losses (1) 58 177 61 Adjustment to the existing allowance — (10) 19 Write-offs (140) (70) (34) Balance at end of period $ 243 $ 325 $ 228 (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 October 31, 2023 2022 In millions Billed: (1) Current 1-30 days $ 320 $ 372 Past due 31-60 days 30 32 Past due 61-90 days 13 19 Past due > 90 days 100 121 Unbilled sales-type and direct-financing lease receivables 8,351 7,815 Total gross financing receivables $ 8,814 $ 8,359 Gross financing receivables on non-accrual status (2) $ 227 $ 290 Gross financing receivables 90 days past due and still accruing interest (2) $ 81 $ 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. Operating Leases Operating lease assets included in Property, plant and equipment, net in the Consolidated Balance Sheets were as follows: As of October 31, 2023 2022 In millions Equipment leased to customers $ 7,019 $ 6,879 Accumulated depreciation (2,919) (2,776) Total $ 4,100 $ 4,103 As of October 31, 2023, minimum future rentals on non-cancelable operating leases related to leased equipment were as follows: As of October 31, 2023 Fiscal year In millions 2024 $ 1,820 2025 1,174 2026 451 2027 59 2028 4 Thereafter — Total $ 3,508 If a lease is classified as an operating lease, the Company records lease revenue on a straight-line basis over the lease term. At commencement of an operating lease, initial direct costs are deferred and are expensed over the lease term on the same basis as the lease revenue is recorded. The following table presents amounts included in the Consolidated Statements of Earnings related to lessor activity: For the fiscal years ended October 31, Location 2023 2022 2021 In millions Interest income from sales-type leases and direct financing leases Financing income $ 547 $ 483 $ 494 Lease income from operating leases Services 2,407 2,296 2,383 Total lease income $ 2,954 $ 2,779 $ 2,877 Variable Interest Entities The Company has issued asset-backed debt securities under a fixed-term securitization program to private investors. The asset-backed debt securities are collateralized by the U.S. fixed-term financing receivables and leased equipment in the offering, which is held by a Special Purpose Entity (“SPE”). The SPE meets the definition of a VIE and is consolidated, along with the associated debt, into the 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 October 31, 2023 and 2022, which are included in the 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 October 31, 2023 2022 Assets held by VIE: In millions Other current assets $ 145 $ 203 Financing receivables Short-term $ 764 $ 838 Long-term $ 983 $ 1,085 Property, plant and equipment, net $ 1,214 $ 1,323 Liabilities held by VIE: Notes payable and short-term borrowings, net of unamortized debt issuance costs $ 1,392 $ 1,510 Long-term debt, net of unamortized debt issuance costs $ 1,082 $ 1,415 |
Acquisitions
Acquisitions | 12 Months Ended |
Oct. 31, 2023 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions Acquisitions in fiscal 2023 During fiscal 2023, the Company completed five acquisitions. The purchase price allocations for the acquisitions described below reflect various preliminary fair value estimates and analysis, including preliminary work performed by third-party valuation specialists, of certain tangible assets and liabilities acquired, the valuation of intangible assets acquired, certain legal matters, income and non-income based taxes, and residual goodwill, which are subject to change within the measurement period. Measurement period adjustments are recorded in the reporting period in which the estimates are finalized and adjustment amounts are determined. The pro forma results of operations, revenue and net income subsequent to the acquisition dates have not been presented as they are not material to the Company's consolidated results of operations, either individually or in the aggregate. Goodwill, which represents the excess of the purchase price over the net tangible and intangible assets acquired, is not deductible for tax purposes. The following table presents the aggregate estimated fair value of the assets acquired and liabilities assumed, including those items that are still pending allocations, for the acquisitions completed during fiscal 2023: In millions Goodwill $ 585 Amortizable intangible assets 209 Net tangible assets assumed 46 Total fair value consideration $ 840 On May 2, 2023, the Company completed the acquisition of OpsRamp, an IT operations management company that monitors, observes, automates, and manages IT infrastructure, cloud resources, workloads, and applications for hybrid and multi-cloud environments, including the leading hyperscalers. OpsRamp’s results of operations were included within the Corporate Investments and Other segment. The acquisition date fair value consideration of $307 million primarily consisted of cash paid for outstanding common stock. In connection with this acquisition, the Company recorded approximately $217 million of goodwill, and $84 million of intangible assets. The Company is amortizing the intangible assets on a straight-line basis over an estimated weighted-average useful life of 5 years. On March 15, 2023, the Company completed the acquisition of Axis Security, a cloud security provider, enabling the Company to expand its edge-to-cloud security capabilities by offering a unified Secure Access Services Edge solution to meet the increasing demand for integrated networking and security solutions delivered aaS. Axis Security's results of operations were included within the Intelligent Edge segment. The acquisition date fair value consideration of $412 million primarily consisted of cash paid for outstanding common stock. In connection with this acquisition, the Company recorded approximately $311 million of goodwill, and $71 million of intangible assets. The Company is amortizing the intangible assets on a straight-line basis over an estimated weighted-average useful life of 5 years. Acquisitions in fiscal 2022 The Company did not have any acquisitions during fiscal 2022. Acquisitions in fiscal 2021 During fiscal 2021, the Company completed four acquisitions, none of which were material, both individually and in the aggregate, to the Company's Consolidated Financial Statements. The following table presents the aggregate final purchase price allocation for the Company's acquisitions during fiscal 2021: In millions Goodwill $ 302 Amortizable intangible assets 277 Net tangible liabilities assumed (11) Total fair value consideration $ 568 On August 31, 2021, the Company completed the acquisition of Zerto, an industry leader in cloud data management and protection. Zerto's results of operations were included within the Storage segment. The acquisition date fair value consideration of $416 million primarily consisted of cash paid for outstanding common stock and vested in-the-money stock awards. In connection with this acquisition, the Company recorded approximately $214 million of goodwill, and $212 million of intangible assets after considering the measurement period adjustments. The Company is amortizing the intangible assets on a straight-line basis over an estimated weighted-average useful life of seven years. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Oct. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill Goodwill and related changes in the carrying amount by reportable segment were as follows: Compute HPC & AI Storage Intelligent Edge Financial Corporate Investments & Other Total In millions Balance at October 31, 2022 (1)(2) $ 7,692 $ 2,889 $ 4,000 $ 2,555 $ 144 $ 123 $ 17,403 Goodwill from acquisitions — 15 — 311 — 259 585 Balance at October 31, 2023 (1) $ 7,692 $ 2,904 $ 4,000 $ 2,866 $ 144 $ 382 $ 17,988 (1) Goodwill is net of accumulated impairment losses of $1.9 billion. Of this amount, $1.7 billion relates to HPC & AI of which $815 million was recorded during the fourth quarter of fiscal 2022. The Software reporting unit within Corporate Investments and Other, has an accumulated impairment loss of $90 million which was also recorded during the fourth quarter of fiscal 2022. (2) 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. Goodwill Impairments Goodwill is tested annually for impairment, as of the first day of the fourth quarter, at the reporting unit level. As of October 31, 2023, the Company's reporting units with goodwill are consistent with the reportable segments identified in Note 2, “Segment Information” to the Consolidated Financial Statements, with the exception of Corporate Investments and Other which contains five reporting units: A & PS, Athonet, legacy CMS, OpsRamp, and Software. The Company’s fiscal 2023 annual goodwill impairment analysis did not result in any impairment. The excess of fair value over carrying amount for our reporting units ranged from approximately 5% to 218% of the respective carrying amounts. The Compute reporting unit has goodwill of $7.7 billion as of October 31, 2023, and excess of fair value over carrying value of 5% as of the annual test date. The Compute business is facing challenges reflected in the results for October 31, 2023. The Compute business is cyclical in nature. Over the last several years, digital transformation drove increased investment to modernize infrastructure. However, in the current macroeconomic and inflationary environment, customers have slowed their investments resulting in lower server demand and competitive pricing. These dynamics are further compounded by higher supply chain costs. During this cycle, the Compute business continues to focus on capturing market share while maintaining operating margin. The HPC & AI reporting unit has goodwill of $2.9 billion as of October 31, 2023, and excess of fair value over carrying value of 12% as of the annual test date. The HPC & AI business continues to face challenges related to supply chain constraints of key components and other operational challenges impacting our 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. We currently believe these challenges will be successfully addressed as the supply chain constraints continue to improve. The Company’s fiscal 2022 annual goodwill impairment analysis resulted in impairment charges for goodwill related to the HPC & AI and Software reporting units. There was no impairment of goodwill for our other reporting units. The decline in the fair value of the HPC & AI reporting unit below its carrying value resulted from changes in expected future cash flows due to the continuation of supply chain constraints, and other operational challenges as well as an increase in cost of capital. As a result, a goodwill impairment charge of $815 million was recorded in the fourth quarter of fiscal 2022. The decline in the fair value of the Software reporting unit resulted primarily from a decline in market multiples. As a result, a goodwill impairment charge of $90 million was recorded in the fourth quarter of fiscal 2022. Based on the results of the Company's interim and annual impairment tests in fiscal 2021, the Company determined that no impairment of goodwill existed. Intangible Assets Intangible assets from acquisitions comprise: As of October 31, 2023 As of October 31, 2022 Gross Accumulated Net Gross Accumulated Net In millions Customer contracts, customer lists and distribution agreements $ 357 $ (177) $ 180 $ 475 $ (256) $ 219 Developed and core technology and patents 1,162 (711) 451 1,163 (695) 468 Trade name and trademarks 146 (123) 23 144 (98) 46 Total intangible assets $ 1,665 $ (1,011) $ 654 $ 1,782 $ (1,049) $ 733 For fiscal 2023, the decrease in gross intangible assets was due primarily to $326 million of intangible assets which became fully amortized and were eliminated from gross intangible assets and accumulated amortization, partially offset by $209 million of intangible assets related to acquisitions. As of October 31, 2023, the weighted-average remaining useful lives of the Company's finite-lived intangible assets were as follows: Weighted-Average In years Customer contracts, customer lists and distribution agreements 5 Developed and core technology and patents 4 Trade name and trademarks 1 As of October 31, 2023, estimated future amortization expense related to finite-lived intangible assets was as follows: Fiscal year In millions 2024 $ 250 2025 137 2026 120 2027 86 2028 40 Thereafter 21 Total $ 654 |
Fair Value
Fair Value | 12 Months Ended |
Oct. 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. Fair Value Hierarchy The Company uses valuation techniques that are based upon observable and unobservable inputs. Observable inputs are developed using market data such as publicly available information and reflect the assumptions market participants would use, while unobservable inputs are developed using the best information available about the assumptions market participants would use. Assets and liabilities are classified in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement: Level 1—Quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2—Quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability and market-corroborated inputs. Level 3—Unobservable inputs for assets or liabilities. The fair value hierarchy gives the highest priority to observable inputs and lowest priority to unobservable inputs. For the fiscal years ended October 31, 2023 and 2022, there were no transfers between levels within the fair value hierarchy. The following table presents the Company's assets and liabilities that are measured at fair value on a recurring basis: As of October 31, 2023 As of October 31, 2022 Fair Value Fair Value Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total In millions Assets Cash equivalents and investments: Time deposits $ — $ 905 $ — $ 905 $ — $ 1,516 $ — $ 1,516 Money market funds 1,672 — — 1,672 744 — — 744 Equity investments — — 135 135 — — 126 126 Foreign bonds 1 95 1 97 — 91 — 91 Other debt securities (1) — — 22 22 — — 33 33 Derivative instruments: Foreign exchange contracts — 464 — 464 — 840 — 840 Other derivatives — — — — — 2 — 2 Total assets $ 1,673 $ 1,464 $ 158 $ 3,295 $ 744 $ 2,449 $ 159 $ 3,352 Liabilities Derivative instruments: Interest rate contracts $ — $ 151 $ — $ 151 $ — $ 178 $ — $ 178 Foreign exchange contracts — 152 — 152 — 128 — 128 Other derivatives — 2 — 2 — 1 — 1 Total liabilities $ — $ 305 $ — $ 305 $ — $ 307 $ — $ 307 (1) Available-for-sale debt securities with carrying values that approximate fair value. Valuation Techniques Cash Equivalents and Investments: The Company holds time deposits, money market funds, debt securities primarily consisting of corporate and foreign government notes and bonds. The Company values cash equivalents using quoted market prices, alternative pricing sources, including net asset value, or models utilizing market observable inputs. The fair value of debt and equity investments was based on quoted market prices or model-driven valuations using inputs primarily derived from or corroborated by observable market data, and, in certain instances, valuation models that utilize assumptions which cannot be corroborated with observable market data. Equity and other securities include investments in marketable and non-marketable securities. In evaluating non-marketable securities for impairment or observable price changes, the Company uses valuation techniques using the best information available, and may include quoted market prices, market comparables and discounted cash flow projections. Derivative Instruments: The Company uses forward contracts, interest rate and total return swaps to hedge certain foreign currency and interest rate exposures. The Company uses industry standard valuation models to measure fair value. Where applicable, these models project future cash flows and discount the future amounts to present value using market-based observable inputs, including interest rate curves, the Company and counterparties' credit risk, foreign currency exchange rates, and forward and spot prices for currencies and interest rates. See Note 13, “Financial Instruments,” for a further discussion of the Company's use of derivative instruments. Other Fair Value Disclosures Short-Term and Long-Term Debt: T he Company estimates the fair value of its debt primarily using an expected present value technique, which is based on observable market inputs using interest rates currently available to companies of similar credit standing for similar terms and remaining maturities, and considering its own credit risk. The portion of the Company's debt that is hedged is reflected in the Consolidated Balance Sheets as an amount equal to the debt's carrying amount and a fair value adjustment representing changes in the fair value of the hedged debt obligations arising from movements in benchmark interest rates. As of October 31, 2023, the estimated fair value of the Company's short-term and long-term de bt was $12.2 billion and the carrying value was $12.4 billion. As of October 31, 2022, the estimated fair value of the Company's short-term and long-term debt was $12.2 billion and the carrying value was $12.5 billion. If measured at fair value in the Consolidated Balance Sheets, short-term and long-term debt would be classified in Level 2 of the fair value hierarchy. Other Financial Instruments: For the balance of the Company's financial instruments, primarily accounts receivable, accounts payable and financial liabilities included in other accrued liabilities, the carrying amounts approximate fair value due to their short nature. If measured at fair value in the Consolidated Balance Sheets, these other financial instruments would be classified in Level 2 or Level 3 of the fair value hierarchy. Non-Recurring Fair Value Measurements 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 fiscal 2023 and 2022, the Company recorded a net unrealized loss of $45 million and $17 million, respectively, which included impairments of $50 million and $24 million for the same respective periods. For fiscal 2021, the Company recorded an unrealized gain of $64 million and no impairment charges on these investments. These amounts are reflected in Interest and other, net in the Consolidated Statements of Earnings. If measured at fair value in the Consolidated Balance Sheets, these would generally be classified in Level 3 of the fair value hierarchy. These adjustments are based on observable price changes for certain equity investments without readily determinable fair value. For investments still held as of October 31, 2023, the cumulative upward adjustments for observable price changes was $33 million and cumulative downward adjustments 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 ROU assets based on the lease liability, adjusted for lease prepayments, lease incentives received and the lessee's initial direct costs. Fair value adjustments are made to these non-financial assets in the period an impairment charge is recognized. In fiscal 2023, 2022 and 2021, the Company recorded a ROU asset impairment charge of $18 million, $5 million and $89 million, respectively, in Transformation costs in the Consolidated Statements of Earnings as the carrying value of certain ROU assets exceeded its fair value. If measured at fair value in the Consolidated Balance Sheets, these would generally be classified in Level 3 of the fair value hierarchy. |
Financial Instruments
Financial Instruments | 12 Months Ended |
Oct. 31, 2023 | |
Investments, All Other Investments [Abstract] | |
Financial Instruments | Financial Instruments Cash Equivalents and Available-for-Sale Investments Cash equivalents and available-for-sale investments were as follows: As of October 31, 2023 As of October 31, 2022 Cost Gross Fair Cost Gross Fair In millions Cash Equivalents: Time deposits $ 905 $ — $ 905 $ 1,516 $ — $ 1,516 Money market funds 1,672 — 1,672 744 — 744 Total cash equivalents 2,577 — 2,577 2,260 — 2,260 Available-for-Sale Investments: Foreign bonds 100 (3) 97 93 (2) 91 Other debt securities 19 3 22 32 1 33 Total available-for-sale investments 119 — 119 125 (1) 124 Total cash equivalents and available-for-sale investments $ 2,696 $ — $ 2,696 $ 2,385 $ (1) $ 2,384 All highly liquid investments with original maturities of three months or less at the date of acquisition are considered cash equivalents. As of October 31, 2023 and 2022, the carrying amount of cash equivalents approximated fair value due to the short period of time to maturity. Interest income related to cash, cash equivalents and debt securities was approximately $127 million, $39 million and $18 million in fiscal 2023, 2022 and 2021, respectively. Time deposits were primarily issued by institutions outside the U.S. as of October 31, 2023 and 2022. The estimated fair value of the available-for-sale investments may not be representative of values that will be realized in the future. Contractual maturities of investments in available-for-sale debt securities were as follows: As of October 31, 2023 Amortized Cost Fair Value In millions Due in one year $ 3 $ 3 Due in one to five years 5 5 Due in more than five years 111 111 $ 119 $ 119 Equity Investments Non-marketable equity investments in privately held companies are included in Long-term financing receivables and other assets in the 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 $145 million and $175 million as of October 31, 2023 and 2022, respectively. For fiscal 2023 and 2022, the Company recorded a net unrealized loss of $45 million and $17 million, respectively, which included impairments of $50 million and $24 million for the same respective periods. For fiscal 2021, the Company recorded an unrealized gain of $64 million and no impairment charges on these investments. The carrying amount of those non-marketable equity investments Derivative Instruments The Company is a global company exposed to foreign currency exchange rate fluctuations and interest rate changes in the normal course of its business. As part of its risk management strategy, the Company uses derivative instruments, primarily forward contracts, interest rate swaps and total return swaps to hedge certain foreign currency, interest rate and, to a lesser extent, equity exposures. The Company's objective is to offset gains and losses resulting from these exposures with losses and gains on the derivative contracts used to hedge them, thereby reducing volatility of earnings or protecting the fair value of assets and liabilities. The Company does not have any leveraged derivatives and does not use derivative contracts for speculative purposes. The Company may designate its derivative contracts as fair value hedges, cash flow hedges or hedges of the foreign currency exposure of a net investment in a foreign operation (“net investment hedges”). Additionally, for derivatives not designated as hedging instruments, the Company categorizes those economic hedges as other derivatives. Derivative instruments are recognized at fair value in the Consolidated Balance Sheets. The change in fair value of the derivative instruments is recognized in the Consolidated Statements of Earnings or Consolidated Statements of Comprehensive Income depending upon the type of hedge as further discussed below. The Company classifies cash flows from its derivative programs with the activities that correspond to the underlying hedged items in the Consolidated Statements of Cash Flows. As a result of its use of derivative instruments, the Company is exposed to the risk that its counterparties will fail to meet their contractual obligations. To mitigate counterparty credit risk, the Company has a policy of only entering into derivative contracts with carefully selected major financial institutions based on their credit ratings and other factors, and the Company maintains dollar risk limits that correspond to each financial institution's credit rating and other factors. The Company's established policies and procedures for mitigating credit risk include reviewing and establishing limits for credit exposure and periodically reassessing the creditworthiness of its counterparties. Master netting agreements also mitigate credit exposure to counterparties by permitting the Company to net amounts due from the Company to a counterparty against amounts due to the Company from the same counterparty under certain conditions. To further mitigate credit exposure to counterparties, the Company has collateral security agreements, which allows the Company to hold collateral from, or require the Company to post collateral to counterparties when aggregate derivative fair values exceed contractually established thresholds which are generally based on the credit ratings of the Company and its counterparties. If the Company's credit rating falls below a specified credit rating, the counterparty has the right to request full collateralization of the derivatives' net liability position. Conversely, if the counterparty's credit rating falls below a specified credit rating, the Company has the right to request full collateralization of the derivatives' net liability position. Collateral is generally posted within two business days. The fair value of the Company's derivatives with credit contingent features in a net liability position was $108 million and $106 million at October 31, 2023 and 2022, respectively, most of which were fully collateralized within two business days. Under the Company's derivative contracts, the counterparty can terminate all outstanding trades following a covered change of control event affecting the Company that results in the surviving entity being rated below a specified credit rating. This credit contingent provision did not affect the Company's financial position or cash flows as of October 31, 2023 and 2022. Fair Value Hedges The Company issues long-term debt in U.S. dollars based on market conditions at the time of financing. The Company may enter into fair value hedges, such as interest rate swaps, to reduce the exposure of its debt portfolio to changes in fair value resulting from changes in interest rates by achieving a primarily U.S. dollar LIBOR-based floating interest rate which was replaced with SOFR starting in July of fiscal 2023. The swap transactions generally involve principal and interest obligations for U.S. dollar-denominated amounts. Alternatively, the Company may choose not to swap fixed for floating interest payments or may terminate a previously executed swap if it believes a larger proportion of fixed-rate debt would be beneficial. When investing in fixed-rate instruments, the Company may enter into interest rate swaps that convert the fixed interest payments into variable interest payments and may designate these swaps as fair value hedges. For derivative instruments that are designated and qualify as fair value hedges, the Company recognizes the change in fair value of the derivative instrument, as well as the offsetting change in the fair value of the hedged item, in Interest and other, net in the Consolidated Statements of Earnings in the period of change. Cash Flow Hedges The Company uses forward contracts designated as cash flow hedges to protect against the foreign currency exchange rate risks inherent in its forecasted net revenue and, to a lesser extent, cost of sales, operating expenses, and intercompany loans denominated in currencies other than the U.S. dollar. The Company's foreign currency cash flow hedges mature generally within twelve months; however, forward contracts associated with sales-type and direct-financing leases and intercompany loans extend for the duration of the lease or loan term, which can extend up to five years. For derivative instruments that are designated and qualify as cash flow hedges, and as long as they remain highly effective, the Company records the changes in fair value of the derivative instrument in Accumulated other comprehensive loss as a separate component of equity in the Consolidated Balance Sheets and subsequently reclassifies these amounts into earnings in the same financial statement line item when the hedged transaction is recognized. Net Investment Hedges The Company uses forward contracts designated as net investment hedges to hedge net investments in certain foreign subsidiaries whose functional currency is the local currency. The Company records the changes in the fair value of the hedged items in cumulative translation adjustment as a separate component of equity in the Consolidated Balance Sheets. Other Derivatives Other derivatives not designated as hedging instruments consist primarily of forward contracts used to hedge foreign currency-denominated balance sheet exposures. The Company also uses total return swaps, based on equity or fixed income indices, to hedge its executive deferred compensation plan liability. For derivative instruments not designated as hedging instruments, the Company recognizes changes in fair value of the derivative instrument, as well as the offsetting change in the fair value of the hedged item, in Interest and other, net in the Consolidated Statements of Earnings in the period of change. Hedge Effectiveness For interest rate swaps designated as fair value hedges, the Company measures hedge effectiveness by offsetting the change in fair value of the hedged items with the change in fair value of the derivative. For forward contracts designated as cash flow or net investment hedges, the Company measures hedge effectiveness by comparing the cumulative change in fair value of the hedge contract with the cumulative change in fair value of the hedged item, both of which are based on forward rates. Fair Value of Derivative Instruments in the Consolidated Balance Sheets The gross notional and fair value of derivative instruments in the Consolidated Balance Sheets was as follows: As of October 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 $ — $ — $ — $ 151 $ 2,500 $ — $ — $ — $ 178 Cash flow hedges: Foreign currency contracts 8,247 252 104 33 23 7,662 420 246 25 13 Net investment hedges: Foreign currency contracts 1,972 39 46 34 23 1,883 60 74 12 13 Total derivatives designated as hedging instruments 12,719 291 150 67 197 12,045 480 320 37 204 Derivatives not designated as hedging instruments Foreign currency contracts 6,786 20 3 23 16 7,780 36 4 53 12 Other derivatives 100 — — 2 — 95 2 — 1 — Total derivatives not designated as hedging instruments 6,886 20 3 25 16 7,875 38 4 54 12 Total derivatives $ 19,605 $ 311 $ 153 $ 92 $ 213 $ 19,920 $ 518 $ 324 $ 91 $ 216 Offsetting of Derivative Instruments The Company recognizes all derivative instruments on a gross basis in the Consolidated Balance Sheets. The Company's derivative instruments are subject to master netting arrangements and collateral security arrangements. The Company does not offset the fair value of its derivative instruments against the fair value of cash collateral posted under collateral security agreements. As of October 31, 2023 and 2022, information related to the potential effect of the Company's use of the master netting agreements and collateral security agreements was as follows: As of October 31, 2023 In the Consolidated Balance Sheets (i) (ii) (iii) = (i)–(ii) (iv) (v) (vi) = (iii)–(iv)–(v) Gross Amounts Gross Gross Net Amount Derivatives Financial Net Amount In millions Derivative assets $ 464 $ — $ 464 $ 196 $ 207 (1) $ 61 Derivative liabilities $ 305 $ — $ 305 $ 196 $ 103 (2) $ 6 As of October 31, 2022 In the Consolidated Balance Sheets (i) (ii) (iii) = (i)–(ii) (iv) (v) (vi) = (iii)–(iv)–(v) Gross Amounts 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) N/A (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 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 October 31, 2023, of the $103 million of collateral posted, $56 million was in cash and $47 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 re-use of counterparty collateral. The amounts recorded in the Consolidated Balance Sheets related to cumulative basis adjustments for fair value hedges were as follows: Carrying amount of the hedged assets/ (liabilities) Cumulative amount of fair value hedging adjustment included in the carrying amount of the hedged assets/ (liabilities) As of October 31, As of October 31, 2023 2022 2023 2022 In millions In millions Long-term debt $ (2,345) $ (2,317) $ 151 $ 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 fiscal years ended October 31, 2023 2022 2021 In millions Derivatives in Cash Flow Hedging Relationship Foreign exchange contracts $ (177) $ 1,025 $ (50) Derivatives in Net Investment Hedging Relationship Foreign exchange contracts (76) 99 (33) Total $ (253) $ 1,124 $ (83) As of October 31, 2023, the Company expects to reclassify an estimated net accumulated other comprehensive gain of approximately $71 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 Consolidated Statements of Earnings The following table represents pre-tax effect of derivative instruments on total amounts of income and expense line items presented in the Consolidated Statements of Earnings in which the effects of fair value hedges, cash flow hedges and derivatives not designated as hedging instruments are recorded: Gains (Losses) Recognized in Income For the fiscal years ended October 31, 2023 2022 2021 Net revenue Interest and other, net Net revenue Interest and other, net Net revenue Interest and other, net In millions Total net revenue and interest and other, net $ 29,135 $ (156) $ 28,496 $ (188) $ 27,784 $ (211) Gains (losses) on derivatives in fair value hedging relationships Interest rate contracts Hedged items — (27) — 273 — 125 Derivatives designated as hedging instruments — 27 — (273) — (125) Gains (losses) on derivatives in cash flow hedging relationships Foreign exchange contracts Amount of gains (losses) reclassified from accumulated other comprehensive income into income 28 (144) 388 590 (81) (73) Interest rate contracts Amount of gains (losses) reclassified from accumulated other comprehensive income into income — — — — — (2) Gains (losses) on derivatives not designated as hedging instruments Foreign exchange contracts — (97) — 287 — (68) Other derivatives — (8) — (3) — 6 Total gains (losses) $ 28 $ (249) $ 388 $ 874 $ (81) $ (137) |
Borrowings
Borrowings | 12 Months Ended |
Oct. 31, 2023 | |
Debt Disclosure [Abstract] | |
Borrowings | Borrowings Notes Payable and Short-Term Borrowings Notes payable and short-term borrowings, including the current portion of long-term debt, were as follows: As of October 31, 2023 2022 Amount Weighted-Average Amount Weighted-Average Dollars in millions Current portion of long-term debt (1) $ 4,022 4.8 % $ 3,876 3.6 % Commercial paper 679 4.1 % 542 0.6 % Notes payable to banks, lines of credit and other 167 4.6 % 194 2.7 % Total notes payable and short-term borrowings $ 4,868 $ 4,612 (1) As of October 31, 2023, the Current portion of long-term debt, net of discount and issuance costs, included $1.4 billion associated with the current portion of the Company issued asset-backed debt securities. Long-Term Debt As of October 31, 2023 2022 In millions Hewlett Packard Enterprise Unsecured Senior Notes $250 issued at premium to par at a price of 100.452% in June 2023 at 5.90%, due October 1, 2024, interest payable semi-annually on April 1 and October 1 of each year $ 251 $ — $550 issued at discount to par at a price of 99.887% in June 2023 at 5.25%, due July 1, 2028, interest payable semi-annually on January 1 and July 1 of each year 549 — $400 issued at discount to par at a price of 99.997% in March 2023 at 6.102%, due April 1, 2026, interest payable semi-annually on April 1 and October 1 of each year 400 — $1,300 issued at discount to par at a price of 99.934% in March 2023 at 5.90%, due October 1, 2024, interest payable semi-annually on April 1 and October 1 of each year 1,299 — $1,000 issued at discount to par at a price of 99.883% in July 2020 at 1.45%, due April 1, 2024, interest payable semi-annually on April 1 and October 1 of each year 1,000 1,000 $750 issued at discount to par at a price of 99.820% in July 2020 at 1.75%, due April 1, 2026, interest payable semi-annually on April 1 and October 1 of each year 749 749 $1,250 issued at discount to par at a price of 99.956% in April 2020 at 4.45%, due October 2, 2023, interest payable semi-annually on April 2 and October 2 of each year — 1,250 $1,000 issued at discount to par at a price of 99.979% in September 2019 at 2.25%, due April 1, 2023, interest payable semi-annually on April 1 and October 1 of each year — 1,000 $2,500 issued at discount to par at a price of 99.725% in October 2015 at 4.90%, due October 15, 2025, interest payable semi-annually on April 15 and October 15 of each year 2,499 2,497 $750 issued at discount to par at a price of 99.942% in October 2015 at 6.20%, due October 15, 2035, interest payable semi-annually on April 15 and October 15 of each year 750 750 $1,500 issued at discount to par at a price of 99.932% in October 2015 at 6.35%, due October 15, 2045, interest payable semi-annually on April 15 and October 15 of each year 1,499 1,499 Hewlett Packard Enterprise Asset-Backed Debt Securities $612 issued in September 2023, in six tranches at a weighted average price of 99.99% and a weighted average interest rate of 6.40%, payable monthly from October 2023 with a stated final maturity of July 2031 596 — $643 issued in March 2023 and April 2023, in five tranches at a weighted average price of 99.99% and a weighted average interest rate of 5.59%, payable monthly from April 2023 with a stated final maturity of April 2028 483 — $651 issued in October 2022, in five tranches at a weighted average price of 99.99% and a weighted average interest rate of 5.55%, payable monthly from November 2022 with a stated final maturity date of August 2029 393 651 $747 issued in May 2022, in six tranches at a weighted average price of 99.99% and a weighted average interest rate of 3.68%, payable monthly from July 2022 with a stated final maturity date of March 2030 367 614 $1,000 issued in January 2022, in six tranches at a weighted average price of 99.99% and a weighted average interest rate of 1.51%, payable monthly from March 2022 with a stated final maturity date of November 2029 391 712 $753 issued in June 2021, in six tranches at a weighted average price of 99.99% and a weighted average interest rate of 0.58%, payable monthly from August 2021 with a stated final maturity date of March 2029 147 362 $1,000 issued in March 2021, in six tranches at a weighted average price of 99.99% and a weighted average interest rate of 0.49%, payable monthly from April 2021 with a stated final maturity date of March 2031 102 354 $1,000 issued in June 2020, in six tranches at a weighted average price of 99.99% and a weighted average interest rate of 1.19%, payable monthly from August 2020 with a stated final maturity date of July 2030 — 151 $755 issued in February 2020 of in six tranches at a weighted average price of 99.99% and a weighted average interest rate of 1.87%, payable monthly from April 2020 with a stated final maturity date of February 2030 — 88 Other, including finance lease obligations, at 1.1%-6.3%, due in calendar years 2023-2030 (1) 215 261 Fair value adjustment related to hedged debt (151) (178) Unamortized debt issuance costs (30) (31) Less: current portion (4,022) (3,876) Total long-term debt $ 7,487 $ 7,853 (1) Other, including finance lease obligations included $36 million and $86 million as of October 31, 2023 and 2022, respectively, of borrowing- and funding-related activity associated with FS and its subsidiaries that are collateralized by receivables and underlying assets associated with the related finance and operating leases. For both the periods presented, the carrying amount of the assets approximated the carrying amount of the borrowings. Interest expense on borrowings recognized in the Consolidated Statements of Earnings was as follows: For the fiscal years ended October 31, Location 2023 2022 2021 In millions Financing interest Financing cost $ 383 $ 211 $ 212 Interest expense Interest and other, net 326 260 289 Total interest expense $ 709 $ 471 $ 501 As disclosed in Note 13, “Financial Instruments,” the Company used interest rate swaps to mitigate the exposure of its fixed rate debt to changes in fair value resulting from changes in interest rates, or hedge the variability of cash flows in the interest payments associated with its variable-rate debt. Interest rates on long-term debt in the table above have not been adjusted to reflect the impact of any interest rate swaps. 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 October 31, 2023 and 2022, no borrowings were outstanding under the Parent Programs. As of October 31, 2023 and 2022, $679 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 October 31, 2023 and 2022, no borrowings were outstanding under either credit facility. Uncommitted Credit facility On September 21, 2023, the Company entered into a five-year agreement with Societe Generale for an uncommitted short-term cash advance facility in the principal amount of up to $500 million. As of October 31, 2023, no borrowings were outstanding under this credit facility. Future Maturities of Borrowings As of October 31, 2023, aggregate future maturities of the Company's borrowings at face value (excluding a fair value adjustment related to hedged debt of $151 million, a net discount of $4 million and unamortized debt issuance costs of $30 million), including finance lease obligations were as follows: Fiscal year In millions 2024 $ 4,030 2025 3,486 2026 1,351 2027 9 2028 557 Thereafter 2,261 Total $ 11,694 |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Oct. 31, 2023 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | Stockholders' Equity The components of accumulated other comprehensive loss, net of taxes as of October 31, 2023 and changes during fiscal 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 1 (177) (99) (32) (307) Reclassifications of losses into earnings — 116 147 — 263 Tax benefit — 13 41 4 58 Balance at end of period $ — $ 61 $ (2,507) $ (638) $ (3,084) The components of accumulated other comprehensive loss, net of taxes as of October 31, 2022 and changes during fiscal 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 (16) 1025 (315) (146) 548 Reclassifications of (gains) losses into earnings — (978) 160 — (818) Tax (provision) benefit — (19) 104 2 87 Balance at end of period $ (1) $ 109 $ (2,596) $ (610) $ (3,098) The components of accumulated other comprehensive loss, net of taxes as of October 31, 2021 and changes during fiscal 2021 were as follows: Net unrealized Net unrealized Unrealized Cumulative Accumulated In millions Balance at beginning of period $ 18 $ (7) $ (3,473) $ (477) $ (3,939) Other comprehensive (loss) income before reclassifications (3) (50) 763 16 726 Reclassifications of losses into earnings — 156 285 — 441 Tax provision — (18) (120) (5) (143) Balance at end of period $ 15 $ 81 $ (2,545) $ (466) $ (2,915) Dividends The stockholders of HPE common stock are entitled to receive dividends when and as declared by HPE's Board of Directors. Dividends declared were $0.48 per common share in both fiscal 2023 and 2022. On November 28, 2023, the Company declared a regular cash dividend of $0.13 per share on the Company's common stock, payable on January 11, 2024, to the stockholders of record as of the close of business on December 13, 2023. Share Repurchase Program On October 13, 2015, the Company's Board of Directors approved a share repurchase program with a $3.0 billion authorization, which was refreshed with additional share repurchase authorizations of $3.0 billion, $5.0 billion and $2.5 billion on May 24, 2016, October 16, 2017 and February 21, 2018, respectively. This program, which does not have a specific expiration date, authorizes repurchases in the open market or in private transactions. In fiscal 2023, the Company repurchased and settled a total of 27.2 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, the Company had unsettled open market repurchases of 0.2 million shares as of October 31, 2023. Shares repurchased during the fiscal 2023 were recorded as a $0.4 billion reduction to stockholders' equity. As of October 31, 2023, the Company had a remaining authorization of approximately $1.0 billion for future share repurchases. In fiscal 2022, the Company repurchased and settled a total of 35.4 million shares under its share repurchase program through open market repurchases, which included 0.8 million shares that were unsettled open market repurchases as of October 31, 2021. Additionally, the Company had unsettled open market repurchases of 0.3 million shares as of October 31, 2022. Shares repurchased during the fiscal 2022 were recorded as a $0.5 billion reduction to stockholders' equity. |
Net Earnings Per Share
Net Earnings Per Share | 12 Months Ended |
Oct. 31, 2023 | |
Earnings Per Share [Abstract] | |
Net Earnings Per Share | Net Earnings Per Share The Company calculates basic net EPS using net earnings and the weighted-average number of shares outstanding during the reporting period. Diluted net EPS includes the weighted-average dilutive effect of 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 fiscal years ended October 31, 2023 2022 2021 In millions, except per share amounts Numerator: Net earnings $ 2,025 $ 868 $ 3,427 Denominator: Weighted-average shares used to compute basic net EPS 1,299 1,303 1,309 Dilutive effect of employee stock plans 17 19 21 Weighted-average shares used to compute diluted net EPS 1,316 1,322 1,330 Net earnings per share: Basic $ 1.56 $ 0.67 $ 2.62 Diluted $ 1.54 $ 0.66 $ 2.58 Anti-dilutive weighted-average stock awards (1) — 2 6 (1) The Company excludes shares potentially issuable under employee stock plans that could dilute basic net EPS in the future from the calculation of diluted net earnings per share, as their effect, if included, would have been anti-dilutive for the periods presented. |
Litigation and Contingencies
Litigation and Contingencies | 12 Months Ended |
Oct. 31, 2023 | |
Loss Contingency [Abstract] | |
Litigation and Contingencies | Litigation and Contingencies Hewlett Packard Enterprise is involved in various lawsuits, claims, investigations and proceedings including those consisting of intellectual property, commercial, securities, employment, employee benefits, and environmental matters, which arise in the ordinary course of business. In addition, as part of the Separation and Distribution Agreement (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 October 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 parties subsequently reached an agreement to resolve this class action. The terms of the 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. On April 28, 2023, the Court granted Plaintiffs’ Motion for Final Approval of the Class Action Settlement and Certification of the Settlement Class. The Court has scheduled a compliance hearing for February 8, 2024, to assess the distribution of the settlement fund to the class members and resolve any final issues. India Directorate of Revenue Intelligence Proceedings . On April 30 and May 10, 2010, the India Directorate of Revenue Intelligence (the “DRI”) issued 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. On April 11, 2012, the Bangalore Commissioner of Customs issued an order on the products-related notices affirming duties and penalties against HP India and the named individuals for approximately $386 million. On April 20, 2012, the Commissioner issued an order on the spare parts-related notice affirming duties and penalties against HP India and certain of the named individuals for approximately $17 million. HP India filed appeals of the Commissioner’s orders before the Customs Tribunal. The Customs Department filed cross-appeals before the Customs Tribunal. 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 return the matter to the Commissioner on procedural grounds. The hearings before the Customs Tribunal were subsequently delayed, have been postponed on several occasions since 2014, and have 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, which was denied. 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 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 individuals aged 40 years and older who had their employment terminated by an HP entity pursuant to a work force reduction (“WFR”) plan. Plaintiffs also seek to certify a class under California law consisting of all persons 40 years or older employed by Defendants in the state of California and terminated pursuant to a WFR plan on or after August 18, 2012. On 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 parties have reached an agreement to resolve this matter. Plaintiffs filed a Motion for Preliminary Approval of the Class Action and Collective Action Settlement on September 21, 2023. On November 3, 2023, the Court issued an order granting preliminary approval to the Class Action and Collective Action Settlement. The Court has scheduled a Fairness Hearing to address the parties’ Motion for Final Approval for March 28, 2024. 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. 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. 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. 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; supply chain due diligence, and sustainability, environment, and emissions-related reporting; the management, movement, and disposal of hazardous substances and wastes; the clean-up of contaminated sites; product compliance and safety; 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, subject to certain repairability requirements or 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, Indemnifications an
Guarantees, Indemnifications and Warranties | 12 Months Ended |
Oct. 31, 2023 | |
Guarantees [Abstract] | |
Guarantees, Indemnifications and Warranties | Guarantees, Indemnifications and Warranties 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 intellectual property 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. General Cross-indemnifications In connection with the Separation, Everett and Seattle Transactions, the Company entered into a Separation and Distribution Agreement with HP Inc., DXC and Micro Focus respectively, whereby the Company agreed to indemnify HP Inc., DXC and Micro Focus, each of its subsidiaries and each of their respective directors, officers and employees from and against all liabilities relating to, arising out of or resulting from, among other matters, the liabilities allocated to the Company as part of the Separation, Everett and Seattle Transactions. Similarly, HP Inc., DXC and Micro Focus agreed to indemnify the Company, each of its subsidiaries and each of their respective directors, officers and employees from and against all claims and liabilities relating to, arising out of or resulting from, among other matters, the liabilities allocated to HP Inc., DXC and Micro Focus as part of the Separation, Everett and Seattle Transactions. Tax Matters Agreement with DXC/Micro Focus and Other Income Tax Matters In connection with the Everett Transaction and the Seattle Transaction, the Company entered into a Tax Matters Agreement with DXC and Micro Focus respectively (the “DXC Tax Matters Agreement” and the “Micro Focus Tax Matters Agreement”). The DXC Tax Matters Agreement and the Micro Focus Tax Matters Agreement govern the rights and obligations of the Company and DXC/Micro Focus for certain pre-divestiture tax liabilities and tax receivables. The DXC Tax Matters Agreement and the Micro Focus Tax Matters Agreement generally provide that the Company will be responsible for pre-divestiture tax liabilities and will be entitled to pre-divestiture tax receivables that arise from adjustments made by tax authorities to the Company's and DXC's, or Micro Focus', as applicable, U.S. and certain non-U.S. tax returns. In certain jurisdictions, the Company and DXC/Micro Focus have joint and several liability for past tax liabilities and accordingly, the Company could be legally liable under applicable tax law for such liabilities and required to make additional tax payments. In addition, if the distribution of Everett's or Seattle's common shares to Hewlett Packard Enterprise's stockholders is determined to be taxable, the Company would generally bear the tax liability, unless the taxability of the distribution is the direct result of actions taken by DXC/Micro Focus, in which case DXC/Micro Focus would be responsible for any taxes imposed on the distribution. As of October 31, 2023 and 2022, the Company's receivable and payable balances related to indemnified litigation matters and other contingencies, and income tax-related indemnification covered by these agreements were as follows: As of October 31, 2023 2022 In millions Litigation Matters and Other Contingencies Receivable $ 42 $ 47 Payable 48 50 Income Tax-Related Indemnification (1) Net indemnification receivable - long-term 31 7 Net indemnification receivable - short-term $ 11 $ 11 (1) The actual amount that the Company may receive or pay could vary depending upon the outcome of certain unresolved tax matters, which may not be resolved for several years. Warranties The Company's aggregate product warranty liabilities and changes therein were as follows: For the fiscal years ended October 31, 2023 2022 In millions Balance at beginning of year $ 360 $ 327 Charges 184 238 Adjustments related to pre-existing warranties (18) (2) Settlements made (208) (203) Balance at end of year (1) $ 318 $ 360 (1) The Company included the current portion in Other accrued liabilities, and amounts due after one year in Other non-current liabilities in the accompanying Consolidated Balance Sheets. |
Commitments
Commitments | 12 Months Ended |
Oct. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments | Commitments Unconditional Purchase Obligations As of October 31, 2023, the Company had unconditional purchase obligations of approximately $1.6 billion. These unconditional purchase obligations include agreements to purchase goods or services that are enforceable and legally binding on the Company and that specify all significant terms, including fixed or minimum quantities to be purchased, fixed, minimum or variable price provisions and the approximate timing of the transaction, as well as settlements that the Company has reached with third parties, requiring it to pay determined amounts over a specified period of time. These unconditional purchase obligations are related principally to inventory purchases, software maintenance and support services and other items. Unconditional purchase obligations exclude agreements that are cancellable without penalty. The Company expects the commitments to total $580 million, $293 million, $317 million, $310 million, $46 million, and $5 million for fiscal years 2024, 2025, 2026, 2027, 2028 and thereafter, respectively. |
Equity Method Investments
Equity Method Investments | 12 Months Ended |
Oct. 31, 2023 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity Method Investments | Equity Method Investments The Company includes investments which are accounted for using the equity method, under Investments in equity interests on the Company's Consolidated Balance Sheets. As of October 31, 2023 and 2022, the Company's Investments in equity interests was $2.2 billion and primarily related to a 49% equity interest in H3C Technologies Co., Limited (“H3C”). Pursuant to the Shareholders' Agreement among the Company’s relevant subsidiaries, Unisplendour International Technology Limited (“UNIS”), and 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. On May 26, 2023, the Company’s relevant subsidiaries entered into a Put Share Purchase Agreement with UNIS, whereby UNIS has agreed to purchase all of the H3C shares held by the Company, through its subsidiaries, for total pre-tax cash consideration of $3.5 billion. The disposition remains subject to obtaining required regulatory approvals and completion of certain conditions necessary for closing. For the periods presented, the Company recorded its interest in the net earnings of H3C, prepared in accordance with U.S. GAAP on a one-month lag, along with an adjustment to eliminate unrealized profits on intra-entity sales, and the amortization of basis difference, within Earnings from equity interests in the Consolidated Statements of Earnings. The difference between the sale date carrying value of the Company's investment in H3C and its proportionate share of the net assets fair value of H3C, created a basis difference of $2.5 billion, which was allocated as follows: In millions Equity method goodwill $ 1,674 Intangible assets 749 In-process research and development 188 Deferred tax liabilities (152) Other 75 Basis difference $ 2,534 The Company amortizes the basis difference over the estimated useful lives of the assets that gave rise to this difference. The weighted-average life of the H3C intangible assets is five years and is being amortized using the straight-line method. As of October 31, 2023, the difference between the cost of the investment and the underlying equity in the net assets of the investment is $1,677 million. As of October 31, 2023 and 2022, the Company determined that no impairment of its equity method investments existed. Earnings from equity interests The Company recorded earnings from equity interests of $245 million, $215 million and $180 million in fiscal 2023, 2022 and 2021, respectively, in the Consolidated Statements of Earnings, the components of which are as follows: For the fiscal years ended October 31, 2023 2022 2021 In millions Earnings from equity interests, net of taxes (1) $ 242 $ 270 $ 292 Basis difference amortization (9) (45) (109) Adjustment of profit on intra-entity sales 12 (10) (3) Earnings from equity interests $ 245 $ 215 $ 180 (1) For fiscal 2023, earnings (loss) from equity interests, net of taxes include $244 million, which reflected the Company’s portion of intangible asset impairment charges of $(8) million, from H3C and $(2) million from other venture investments. For fiscal 2022, and 2021 earnings (loss) from equity interests, net of taxes included $275 million and $260 million from H3C and $(5) million and $32 million from other venture investments, respectively. For fiscal 2023 and 2022, the Company received a cash dividend of $200 million and $197 million, respectively, from H3C. This amount was accounted for as a return on investment and reflected as a reduction in the carrying balance of the Company's Investments in equity interests in its Consolidated Balance Sheets. The Company also has commercial arrangements with H3C to buy and sell HPE branded servers, storage and networking products and services. For fiscal 2023, 2022 and 2021, HPE recorded approximately $383 million, $848 million and $794 million of sales to H3C and $125 million, $148 million and $150 million of purchases from H3C, respectively. Payables due to H3C as of October 31, 2023 and 2022 were approximately $10 million and $22 million, respectively. Receivables due from H3C as of October 31, 2023 and 2022 were approximately $12 million and $18 million, respectively. A summary of H3C’s statements of operations for the twelve-month periods ended September 30, 2023, 2022 and 2021 and balance sheets as of September 30, 2023 and 2022 are as follows: For the twelve months ended September 30, 2023 2022 2021 Statement of Operations: In millions Revenue $ 7,161 $ 7,633 $ 6,377 Gross profit 1,790 2,014 1,676 Net income $ 498 $ 561 $ 530 As of September 30, 2023 2022 Balance Sheets: In millions Current assets $ 5,073 $ 4,341 Non-current assets 677 631 Current liabilities 4,052 3,299 Non-current liabilities $ 489 $ 203 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2023 | Oct. 31, 2022 | Oct. 31, 2021 | |
Pay vs Performance Disclosure | |||
Net earnings | $ 2,025 | $ 868 | $ 3,427 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Oct. 31, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Overview and Summary of Signi_2
Overview and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Oct. 31, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation The Consolidated Financial Statements are prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). The accompanying Consolidated Financial Statements include the accounts of the Company and its subsidiaries and affiliates in which the Company has a controlling financial interest or is the primary beneficiary. All intercompany transactions and accounts within the consolidated businesses of the Company have been eliminated. The Company consolidates a Variable Interest Entity (“VIE”) where it has been determined that the Company is the primary beneficiary of the entity's operation. The primary beneficiary is the party that has both the power to direct the activities that most significantly impact the VIE's economic performance and the obligation to absorb losses or the right to receive benefits of the VIE that could potentially be significant to the VIE. In evaluating whether the Company is the primary beneficiary, the Company evaluates its power to direct the most significant activities of the VIE by considering the purpose and design of the entity and the risks the entity was designed to create and pass through to its variable interest holders. The Company also evaluates its economic interests in the VIE. The Company accounts for investments in companies over which it has the ability to exercise significant influence but does not hold a controlling interest under the equity method of accounting, and the Company records its proportionate share of income or losses in Earnings from equity interests in the Consolidated Statements of Earnings. Non-controlling interests are presented as a separate component within Total stockholders' equity in the Consolidated Balance Sheets. Net earnings attributable to non-controlling interests are recorded within Interest and other, net in the Consolidated Statements of Earnings and are not presented separately, as they were not material for any periods presented. |
Segment Realignment | Segment Realignment Effective as of the beginning of the first quarter of fiscal 2023, in order 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 derives the results of its business segments directly from its internal management reporting system. The accounting policies that Hewlett Packard Enterprise uses to derive segment results are substantially the same as those the consolidated company uses. The CODM measures the performance of each segment based on several metrics, including earnings from operations. The CODM uses these results, in part, to evaluate the performance of, and to allocate resources to each of the segments. Segment revenue includes revenues from sales to external customers and intersegment revenues that reflect transactions between the segments on an arm's-length basis. Intersegment revenues primarily consist of sales of hardware and software that are sourced internally and, in the majority of the cases, are financed as operating leases by FS to the Company's customers. Hewlett Packard Enterprise's consolidated net revenue is derived and reported after the elimination of intersegment revenues from such arrangements. Financing cost in the Consolidated Statements of Earnings reflects interest expense on borrowing and funding-related activity associated with FS and its subsidiaries, and debt issued by Hewlett Packard Enterprise for which a portion of the proceeds benefited FS. Hewlett Packard Enterprise does not allocate to its segments certain operating expenses, which it manages at the corporate level. These unallocated operating costs include certain corporate costs and eliminations, stock-based compensation expense, amortization of initial direct costs, amortization of intangible assets, impairment of goodwill, t ransformation costs, disaster charges and acquisition, disposition and other related charges. Effective November 1, 2023, in order to align the Company’s segment financial reporting more closely with its current business structure, the Company established a new reportable segment, Hybrid Cloud which includes its historical Storage segment, HPE GreenLake Flex Solutions (which provides flexible as-a-service IT infrastructure through the HPE GreenLake edge-to-cloud platform and was previously reported under Compute and HPC & AI segments), Private Cloud, and Software (previously reported under Corporate Investments and Other segment). Additionally, certain products and services reported in the financial results for the HPC & AI segment through the end of fiscal 2023 will be reported in the Compute and Hybrid Cloud segments, and the recently acquired Athonet business and certain components of the CMS business reported in the financial results for Corporate Investments and Other through the end of fiscal 2023 will be reported in the Intelligent Edge segment. Beginning in the first quarter of fiscal 2024, the Company will report its results under the realigned six reportable segments. |
Use of Estimates | Use of Estimates |
Foreign Currency Translation | Foreign Currency Translation |
Revenue Recognition | Revenue Recognition The Company accounts for a contract with a customer when both parties have provided written approval and are committed to perform, each party's rights including payment terms are identified, the contract has commercial substance, and collection of consideration is probable. The Company enters into contracts with customers that typically include combinations of products and services, resulting in arrangements containing multiple performance obligations for hardware and software products and/or various services. The Company determines whether each product or service is distinct in order to identify the performance obligations in the contract and allocate the contract transaction price among the distinct performance obligations. Arrangements are distinct based on whether the customer can benefit from the product or service on its own or together with other resources that are readily available and whether the commitment to transfer the product or service to the customer is separately identifiable from other obligations in the contract. The Company classifies its hardware, perpetual software licenses, service arrangements and software-as-a-service (“SaaS”) as distinct performance obligations. Term software licenses represent multiple obligations, which include software licenses and software maintenance. In transactions where the Company delivers hardware or software, it is typically the principal and records revenue and costs of goods sold on a gross basis. The majority of the Company's revenue is derived from sales of products and services and the associated support and maintenance, and such revenue is recognized when, or as, control of promised products or services is transferred to the customer, in an amount that reflects the consideration to which the Company expects to be entitled, in exchange for those products or services. Variable consideration offered in contracts with customers, partners and distributors may include rebates, volume-based discounts, price protection, and other incentive programs. Variable consideration is estimated at contract inception and updated at the end of each reporting period as additional information becomes available and recognized only to the extent that it is probable that a significant reversal of revenue will not occur. Transfer of control occurs once the customer has the contractual right to use the product, generally upon shipment or once delivery and risk of loss has transferred to the customer. Transfer of control can also occur over time for maintenance and services as the customer receives the benefit over the contract term. The Company's hardware and perpetual software licenses are distinct performance obligations where revenue is recognized upfront upon transfer of control. Term software licenses include multiple performance obligations where the term licenses are recognized upfront upon transfer of control, with the associated software maintenance revenue recognized ratably over the contract term as services and software updates are provided. SaaS arrangements have one distinct performance obligation which is satisfied over time with revenue recognized ratably over the contract term as the customer consumes the services. On its product sales, the Company records consideration from shipping and handling on a gross basis within net product sales. Revenue is recorded net of any associated sales taxes. The Company allocates the transaction price for the contract among the performance obligations on a relative standalone selling price basis. The standalone selling price (“SSP”) is the price at which an entity would sell a promised product or service separately to a customer. For products and services sold as a bundle, the SSP is generally not directly observable and requires the Company to estimate SSP based on management judgment by considering available data such as internal margin objectives, pricing strategies, market/competitive conditions, historical profitability data, as well as other observable inputs. For certain products and services, the Company establishes SSP based on the observable price when sold separately in similar circumstances to similar customers. The Company establishes SSP ranges for its products and services and reassesses them periodically. Judgment is applied in determining the transaction price as the Company may be required to estimate variable consideration when determining the amount of revenue to recognize. Variable consideration may include various rebates, volume-based discounts, price protection, and other incentive programs that are offered to customers, partners and distributors. When determining the amount of revenue to recognize, the Company estimates the expected usage of these programs, applying the expected value or most likely estimate and updates the estimate at each reporting period as actual utilization becomes available. The Company also considers the customers' right of return in determining the transaction price, where applicable. Contract Balances Accounts receivable and contract assets A receivable is a right to consideration in exchange for products or services the Company has transferred to a customer that is unconditional. A contract asset is a right to consideration in exchange for products or services transferred to a customer that is conditional on something other than the passage of time. A receivable is recorded when the right to consideration becomes unconditional. The Company's contract assets include unbilled receivables which are recorded when the Company recognizes revenue in advance of billings. Unbilled receivables generally relate to services contracts where a service has been performed and control has transferred, but invoicing to the customer is subject to future milestone billings or other contractual payment schedules. The Company classifies unbilled receivables as Accounts receivable. Contract liabilities A contract liability is an obligation to transfer products or services to a customer for which the Company has received consideration, or the amount is due, from the customer. The Company's contract liabilities primarily consist of deferred revenue. Deferred revenue is recorded when amounts invoiced to customers are in excess of revenue that can be recognized because performance obligations have not been satisfied and control of the promised products or services has not transferred to the customer. Deferred revenue largely represents amounts invoiced in advance for product (hardware/software) support contracts, consulting projects and product sales where revenue cannot be recognized yet. Costs to obtain a contract with a customer two |
Shipping and Handling | Shipping and Handling The Company includes costs related to shipping and handling in Cost of products. |
Stock-Based Compensation | Stock-Based Compensation Stock-based compensation expense is based on the measurement date fair value of the award and is recognized only for those awards expected to meet the service and performance vesting conditions. Stock-based compensation expense for stock options and restricted stock units with only a service condition is recognized on a straight-line basis over the requisite service period of the award. For stock options and restricted stock units with both a service condition and a performance or market condition, the expense is recognized on a graded vesting basis over the requisite service period of the award. Stock-based compensation expense is determined at the aggregate grant level for service-based awards and at the individual vesting tranche level for awards with performance and/or market conditions. The forfeiture rate is estimated based on historical experience. Stock Options Stock options granted under the Plan are generally non-qualified stock options, but the Plan permits some options granted to qualify as incentive stock options under the U.S. Internal Revenue Code. The exercise price of a stock option is equal to the closing price of the Company's common stock on the option grant date. The majority of the stock options issued by the Company contain only service vesting conditions. The Company has also issued performance-contingent stock options that vest only on the satisfaction of both service and market conditions. The Company did not issue stock options in fiscal 2023 and 2022. Stock options assumed through acquisitions were not material for fiscal 2023. The expenses associated with stock options were not material for any of the periods presented. |
Retirement and Post-Retirement Plans | Retirement and Post-Retirement Plans The Company has various defined benefit, other contributory and noncontributory, retirement and post-retirement plans. The costs and obligations for these plans depend on various assumptions. Major assumptions relate primarily to discount rates, mortality rates, expected increases in compensation levels and the expected long-term return on plan assets. These assumptions vary by plan, and the weighted-average rates used are set forth in Note 4, “Retirement and Post-Retirement Benefit Plans.” The discount rate assumption is based on current investment yields of high-quality fixed-income securities with maturities similar to the expected benefits payment period. Mortality rates help predict the expected life of plan participants and are based on a historical demographic study of the plan. The expected increase in the compensation levels assumption reflects long-term actual experience and future expectations. The expected long-term return on plan assets is determined based on asset allocations, historical portfolio results, historical asset correlations and management's expected returns for each asset class. In any fiscal year, significant differences may arise between the actual return and the expected long-term return on plan assets. Historically, differences between the actual return and expected long-term return on plan assets have resulted from changes in target or actual asset allocation, short-term performance relative to expected long-term performance, and to a lesser extent, differences between target and actual investment allocations, the timing of benefit payments compared to expectations, and the use of derivatives intended to effect asset allocation changes or hedge certain investment or liability exposures. The following table provides the impact changes in the weighted-average assumptions of discount rates, the expected increase in compensation levels and the expected long-term return on plan assets would have had on the net periodic benefit cost for fiscal 2023: Change in basis Change in Net Periodic Benefit Cost In millions Assumptions: Discount rate (25) $ 17 Expected increase in compensation levels 25 3 Expected long-term return on plan assets (25) $ 25 |
Advertising | Advertising Costs to produce advertising are expensed as incurred during production. Costs to communicate advertising are expensed when the advertising is first run. Advertising expense totaled approximately $173 million, $179 million, and $188 million in fiscal 2023, 2022, and 2021, respectively. |
Restructuring | Restructuring The Company's transformation programs include charges to approved restructuring plans. Restructuring charges include severance costs to eliminate a specified number of employees, infrastructure charges to vacate facilities and consolidate operations, and contract cancellation costs. These restructuring actions require management to estimate the timing and amount of severance and other employee separation costs for workforce reduction and enhanced early retirement programs, the fair value of assets made redundant or obsolete, and the value of lease and contract cancellation and other exit costs. The Company records restructuring charges based on estimated employee terminations and site closure and consolidation plans. The Company accrues for severance and other employee separation costs under these actions when it is probable that benefits will be paid and the amount is reasonably estimable. The rates used in determining severance accruals are based on existing plans, historical experiences and negotiated settlements. For a full description of the Company's restructuring actions, refer to the discussions in Note 3, “Transformation Programs.” |
Taxes on Earnings | Taxes on Earnings The Company recognizes deferred tax assets and liabilities for the expected tax consequences of temporary differences between the tax bases of assets and liabilities and their reported amounts using enacted tax rates in effect for the year the differences are expected to reverse. The Company records a valuation allowance to reduce deferred tax assets to the amount that is more likely than not to be realized. In determining the need for a valuation allowance, the Company considers future market growth, forecasted earnings, future sources of taxable income, the mix of earnings in the jurisdictions in which the Company operates, and prudent and feasible tax planning strategies. In the event the Company were to determine that it is more likely than not that the Company will be unable to realize all or part of its deferred tax assets in the future, the Company would increase the valuation allowance and recognize a corresponding charge to earnings in the period in which such a determination was made. Likewise, if the Company later determines that the deferred tax assets are more likely than not to be realized, the Company would reverse the applicable portion of the previously recognized valuation allowance. In order for the Company to realize deferred tax assets, the Company must be able to generate sufficient taxable income, of the appropriate character, in the jurisdictions in which the deferred tax assets are located, prior to their expiration under applicable tax laws. The Company records accruals for uncertain tax positions when the Company believes that it is not more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. The provision for income taxes includes the effects of adjustments for uncertain tax positions as well as any related interest and penalties. The Company recognizes interest income from favorable settlements and interest expense and penalties accrued on unrecognized tax benefits in Provision for taxes in the Consolidated Statements of Earnings. The Company is subject to the Global Intangible Low Taxed Income (“GILTI”) tax in the U.S. The Company elected to treat taxes on future GILTI inclusions in U.S. taxable income as a current period expense when incurred. The Company believes it has provided adequate reserves for all tax deficiencies or reductions in tax benefits that could result from federal, state and foreign tax audits. The Company regularly assesses the likely outcomes of these audits in order to determine the appropriateness of the Company's tax provision. The Company adjusts its uncertain tax positions to reflect the impact of negotiations, settlements, rulings, advice of legal counsel, and other information and events pertaining to a particular audit. However, income tax audits are inherently unpredictable and there can be no assurance that the Company will accurately predict the outcome of these audits. The amounts ultimately paid on resolution of an audit could be materially different from the amounts previously included in the Provision for taxes and therefore the resolution of one or more of these uncertainties in any particular period could have a material impact on net earnings or cash flows. The Company has not provided for U.S. federal and state income and foreign withholding taxes on $9.4 billion of undistributed earnings and basis differences from non-U.S. operations as of October 31, 2023 because the Company intends to reinvest such earnings indefinitely outside of the U.S. Determination of the amount of unrecognized deferred tax liability related to these earnings and basis differences is not practicable. The Company will remit non-indefinitely reinvested earnings of its non-U.S. subsidiaries for which deferred U.S. state income and foreign withholding taxes have been provided where excess cash has accumulated and the Company determines that it is advantageous for business operations, tax or cash management reasons. Deferred Income Taxes Deferred income taxes result from temporary differences between the amount of assets and liabilities recognized for financial reporting and tax purposes. |
Accounts Receivable | Accounts Receivable The allowance for expected credit losses related to accounts receivable is comprised of a general reserve and a specific reserve. The Company may record a specific reserve for individual accounts when the Company becomes aware of specific customer circumstances, such as in the case of a bankruptcy filing or deterioration in the customer's operating results or financial position. If there are additional changes in circumstances related to the specific customer, the Company further adjusts estimates of the recoverability of receivables. The Company maintains an allowance for credit losses for all other customers based on a variety of factors, including the use of third-party credit risk models that generate quantitative measures of default probabilities based on market factors, the financial condition of customers and the length of time receivables are past due. These qualitative factors are subjective and require a degree of management judgment. The past due or delinquency status of a receivable is based on the contractual payment terms of the receivable. The Company establishes an allowance for expected credit losses related to accounts receivable, including unbilled receivables. Financing Receivable The allowance for expected credit losses related to financing receivables is comprised of a general reserve and a specific reserve. The Company establishes a specific reserve for financing receivables with identified exposures, such as customer defaults, bankruptcy or other events, that make it unlikely the Company will recover its investment. For individually evaluated receivables, the Company determines the expected cash flow for the receivable, which includes consideration of estimated proceeds from disposition of the collateral and calculates an estimate of the potential loss and the probability of loss. For those accounts where a loss is considered probable, the Company records a specific reserve. The Company maintains a general reserve using a credit loss model on a regional basis and bases such percentages on several factors, including consideration of historical credit losses and portfolio delinquencies, trends in the overall weighted-average risk rating of the portfolio, current economic conditions, and forward-looking information, including reasonable and supportable forecasts. The Company excludes accounts evaluated as part of the specific reserve from the general reserve analysis. The Company generally writes off a receivable or records a specific reserve when a receivable becomes 180 days past due, or sooner if the Company determines that the receivable is not collectible. Non-Accrual and Past-Due Financing Receivables The Company considers a financing receivable to be past due when the minimum payment is not received by the contractually specified due date. The Company generally places financing receivables on non-accrual status, which is the suspension of interest accrual, and considers such receivables to be non-performing at the earlier of the time at which full payment of principal and interest becomes doubtful or the receivable becomes 90 days past due. Subsequently, the Company may recognize revenue on non-accrual financing receivables as payments are received, which is on a cash basis, if the Company deems the recorded financing receivable to be fully collectible; however, if there is doubt regarding the ultimate collectability of the recorded financing receivable, all cash receipts are applied to the carrying amount of the financing receivable, which is the cost recovery method. In certain circumstances, such as when the Company deems a delinquency to be of an administrative nature, financing receivables may accrue interest after becoming 90 days past due. The non-accrual status of a financing receivable may not impact a customer's risk rating. After all of a customer's delinquent principal and interest balances are settled, the Company may return the related financing receivable to accrual status. |
Concentrations of Risk | Concentrations of Risk Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash, cash equivalents and restricted cash, investments, receivables from trade customers and contract manufacturers, financing receivables and derivatives. The Company maintains cash, cash equivalents and restricted cash, investments, derivatives, and certain other financial instruments with various financial institutions. These financial institutions are located in many different geographic regions, and the Company's policy is designed to limit exposure from any particular institution. As part of its risk management processes, the Company performs periodic evaluations of the relative credit standing of these financial institutions. The Company has not sustained material credit losses from instruments held at these financial institutions. The Company utilizes derivative contracts to protect against the effects of foreign currency and interest rate exposures. Such contracts involve the risk of non-performance by the counterparty, which could result in a material loss. For more details on the collateral program, see Note 13, “Financial Instruments.” Credit risk with respect to accounts receivable from trade customers and financing receivables 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 performs ongoing credit evaluations of the financial condition of its customers and may require collateral, such as letters of credit and bank guarantees, in certain circumstances. As of October 31, 2023 and 2022 no single customer accounted for more than 10% of the Company's receivable from trade customers and financing receivables. |
Restricted Cash | Restricted Cash Restricted cash is included within Other current assets in the accompanying Consolidated Balance Sheets and is primarily related to cash received under the Company's collateral securities agreements for its derivative instruments and cash restricted under the fixed-term securitization program for the issuance of asset-backed debt securities. |
Inventory | Inventory The Company values inventory at the lower of cost or net realizable value. Cost is computed using standard cost which approximates actual cost on a first-in, first-out basis. At each reporting period, the Company assesses the value of its inventory and writes down the cost of inventory to its net realizable value if required, for estimated excess or obsolescence. Factors influencing these adjustments include changes in future demand forecasts, market conditions, technological changes, product life-cycle and development plans, component cost trends, product pricing, physical deterioration, and quality issues. The write down for excess or obsolescence is charged to the provision of inventory, which is a component of Cost of Products and Cost of Services in the Consolidated Statements of Earnings. At the point of the loss recognition, a new, lower cost basis for that inventory is established, and subsequent changes in facts and circumstances do not result in the restoration or increase in that newly established cost basis. |
Property, Plant and Equipment, net | Property, Plant and Equipment, net The Company states property, plant and equipment at cost less accumulated depreciation. The Company capitalizes additions and improvements and expenses maintenance and repairs as incurred. Depreciation expense is recognized on a straight-line basis over the estimated useful lives of the assets. Estimated useful lives are five three accumulated depreciation are removed from the Consolidated Balance Sheets with any gain or loss recognized in the Consolidated Statements of Earnings. The Company capitalizes certain internal and external costs incurred to acquire or create internal use software, principally related to software coding, designing system interfaces and installation and testing of the software. The Company amortizes capitalized internal use software costs using the straight-line method over the estimated useful lives of the software, generally from three |
Lessee Accounting | Lessee Accounting The Company enters into various leases as a lessee for assets including office buildings, data centers, vehicles, and aviation. The Company determines if an arrangement is a lease at inception. An arrangement contains a lease when the arrangement conveys the right to control the use of an identified asset over the lease term. Upon lease commencement, the Company records a lease liability for the obligation to make lease payments and right-of-use (“ROU”) asset for the right to use the underlying asset for the lease term in the Consolidated Balance Sheets. The lease liability is measured at commencement date based on the present value of lease payments not yet paid over the lease term and the Company's incremental borrowing rate. As most of the Company's leases do not provide an implicit rate, the Company uses an incremental borrowing rate which approximates the rate at which the Company would borrow, on a secured basis, in the country where the lease was executed. The ROU asset is based on the lease liability, adjusted for lease prepayments, lease incentives received, and the lessee's initial direct costs. Fixed payments are included in the recognition of ROU assets and liabilities, while non-lease components, such as maintenance or utility charges are expensed as incurred. The Company has agreements with lease and non-lease components that are accounted for separately and not included in its leased assets and corresponding liabilities for the majority of the Company's lease agreements. The Company allocates consideration to the lease and non-lease components using their relative standalone values. The lease term may include options to extend or to terminate the lease that the Company is reasonably certain to exercise. The Company has elected not to record leases with an initial term of twelve months or less on the Consolidated Balance Sheets. |
Lessor Accounting | Lessor Accounting The Company's lease offerings are non-cancelable and the payment schedule primarily consists of fixed payments. Variable payments that are based on an index are included in lease receivables. The Company allocates consideration amongst lease components and non-lease components on a relative standalone selling price basis, when lease arrangements include multiple performance obligations. At the end of the lease term, the Company allows the client to either return the equipment, purchase the equipment or renew the lease based on mutually agreed upon terms. |
Business Combinations | Business Combinations The Company includes the results of operations of acquired businesses in the Company's consolidated results prospectively from the date of acquisition. The Company allocates the fair value of purchase consideration to the assets acquired including in-process research and development (“IPR&D”), liabilities assumed, and non-controlling interests in the acquired entity based on their fair values at the acquisition date. IPR&D is initially capitalized at fair value as an intangible asset with an indefinite life and assessed for impairment thereafter. The excess of the fair value of purchase consideration over the fair value of the assets acquired, liabilities assumed and non-controlling interests in the acquired entity is recorded as goodwill. The primary items that generate goodwill include the value of the synergies between the acquired company and the Company and the value of the acquired assembled workforce, neither of which qualifies for recognition as an intangible asset. Acquisition-related expenses and post-acquisition restructuring costs are recognized separately from the business combination and are expensed as incurred. |
Goodwill | Goodwill The Company reviews goodwill for impairment annually and whenever events or changes in circumstances indicate the carrying amount of goodwill may not be recoverable. In evaluating goodwill for impairment, the Company has the option to first perform a qualitative test to determine whether further impairment testing is necessary or to perform a qualitative assessment by comparing the fair value of the reporting unit to its carrying amount. Under the qualitative assessment, the Company is not required to calculate the fair value of a reporting unit unless it determines that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. Qualitative factors include, but are not limited to, the macroeconomic and industry environment as well as Company-specific factors. The Company used the qualitative assessment for the Athonet and OpsRamp reporting units. For, all other reporting units, the Company elects to perform a quantitative test as part of its annual goodwill impairment assessment in the fourth quarter of each fiscal year. In the quantitative assessment, the Company estimates the fair value of its reporting units using a weighting of fair values derived most significantly from the income approach, and to a lesser extent, the market approach with the exception of the Software reporting unit which uses a weighting derived solely from the market approach. Under the income approach, the Company estimates the fair value of a reporting unit based on the present value of estimated future cash flows covering discrete forecast periods as well as terminal value determinations. The Company prepares cash flow projections based on management's estimates of revenue growth rates and operating margins, taking into consideration industry and market conditions. The Company bases the discount rate on the weighted-average cost of capital adjusted for the relevant risk associated with business-specific characteristics and the uncertainty related to the reporting unit's ability to execute on the projected cash flows. Under the market approach, the Company estimates fair value based on market multiples of revenue and earnings derived from comparable publicly traded companies with similar operating and investment characteristics as the reporting unit. The Company weights the fair value derived from the market approach commensurate with the level of comparability of these publicly traded companies to the reporting unit. When market comparables are not meaningful or not available, the Company estimates the fair value of a reporting unit using only the income approach. If the fair value of a reporting unit exceeds the carrying amount of the net assets assigned to that reporting unit, goodwill is not impaired and no further testing is required. If the fair value of the reporting unit is less than its carrying amount, goodwill is impaired. The goodwill impairment loss is measured as the excess of the reporting unit's carrying value over its fair value (not to exceed the total goodwill allocated to that reporting unit). |
Intangible Assets and Long-Lived Assets | Intangible Assets and Long-Lived Assets The Company reviews intangible assets with finite lives, long-lived assets and ROU assets for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. For lease assets such circumstances would include a decision to abandon the use of all or part of an asset, or subleases that do not fully recover the costs of the associated lease. The Company assesses the recoverability of assets based on the estimated undiscounted future cash flows expected to result from the use and eventual disposition of the asset. If the undiscounted future cash flows are less than the carrying amount, the asset is impaired. The Company measures the amount of impairment loss, if any, as the difference between the carrying amount of the asset and its fair value using an income approach or, when available and appropriate, using a market approach. The Company amortizes intangible assets with finite lives using the straight-line method over the estimated economic lives of the assets, ranging from one |
Equity Method Investments | Equity Method Investments Investments and ownership interests are accounted for under equity method accounting if the Company has the ability to exercise significant influence, but does not have a controlling financial interest. The Company records its interest in the net earnings of its equity method investees, along with adjustments for unrealized profits or losses on intra-entity transactions and amortization of basis differences, within Earnings from equity interests in the Consolidated Statements of Earnings. Profits or losses related to intra-entity sales with its equity method investees are eliminated until realized by the investor or investee. Basis differences represent differences between the cost of the investment and the underlying equity in net assets of the investment and are generally amortized over the lives of the related assets that gave rise to them. Equity method goodwill is not amortized or tested for impairment; instead the equity method investment is tested for impairment. The Company records its interest in the net earnings of its equity method investments based on the most recently available financial statements of the investees. The carrying amount of the investment in equity interests is adjusted to reflect the Company's interest in net earnings, dividends received and other-than-temporary impairments. The Company reviews for impairment whenever factors indicate that the carrying amount of the investment might not be recoverable. In such a case, the decrease in value is recognized in the period the impairment occurs in the Consolidated Statements of Earnings. |
Equity Securities Investments | Equity Securities Investments Equity securities investments with readily determinable fair values (other than those accounted for under the equity method or those that result in consolidation of the investee) are measured at fair value and any changes in fair value are recognized in Interest and other, net in the Consolidated Statements of Earnings. For equity investments without readily determinable fair values, the Company may elect to apply the measurement alternative or the fair value option. Under the measurement alternative investments are measured at cost, less impairment, and adjusted for qualifying observable price changes on a prospective basis. The Company reviews for impairment at each reporting period, assessing factors such as deterioration of earnings, adverse change in market/industry conditions, the ability to operate as a going concern, and other factors which indicate that the carrying amount of the investment might not be recoverable. In such a case, the decrease in value is recognized in the period the impairment occurs in the Consolidated Statements of Earnings. The Company elects the fair value option when it believes that it best reflects the underlying economics of the investment. These investments may be valued using third-party pricing services at each reporting date with changes in fair value recorded as a component of Interest and other, net in the Consolidated Statements of Earnings. |
Debt Securities Investments | Debt Securities Investments Debt securities are generally considered available-for-sale and are reported at fair value with unrealized gains and losses, net of applicable taxes, recorded in Accumulated other comprehensive loss in the Consolidated Balance Sheets. Realized gains and losses for available-for-sale securities are calculated based on the specific identification method and included in Interest and other, net in the Consolidated Statements of Earnings. The Company monitors its investment portfolio for potential impairment on a quarterly basis. When the carrying amount of an investment in debt securities exceeds its fair value and the decline in value is determined to be due to credit-related factors, the Company recognizes the impairment using an allowance for credit loss in Interest and other, net, in the Consolidated Statements of Earnings, while the impairment that is not credit related is recorded in Accumulated other comprehensive loss in the Consolidated Balance Sheets. |
Derivatives | Derivatives The Company uses derivative financial instruments, primarily forwards, swaps, and, at times, options, to manage a variety of risks, including risks related to foreign currency and interest rate exposures. The Company does not use derivative financial instruments for speculative purposes. The Company receives fair value to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. When prices in active markets are not available for an identical asset or liability, the Company generally uses industry standard valuation models to measure the fair value of derivative positions. Such measurements involve projecting future cash flows and discounting the future amounts to present value using market based observable inputs, including interest rate curves, Company and counterparty credit risk, foreign currency exchange rates, and forward and spot prices. In the absence of such data, the Company will use internal information that is consistent with what market participants would use in a hypothetical transaction that occurs at the measurement date. The determination of fair value often involves significant judgments about assumptions such as determining an appropriate discount rate that factors in both risk and liquidity premiums, identifying the similarities and differences in market transactions, weighting those differences accordingly and then making the appropriate adjustments to those market transactions to reflect the risks specific to the asset or liability being valued. Derivative Instruments The Company is a global company exposed to foreign currency exchange rate fluctuations and interest rate changes in the normal course of its business. As part of its risk management strategy, the Company uses derivative instruments, primarily forward contracts, interest rate swaps and total return swaps to hedge certain foreign currency, interest rate and, to a lesser extent, equity exposures. The Company's objective is to offset gains and losses resulting from these exposures with losses and gains on the derivative contracts used to hedge them, thereby reducing volatility of earnings or protecting the fair value of assets and liabilities. The Company does not have any leveraged derivatives and does not use derivative contracts for speculative purposes. The Company may designate its derivative contracts as fair value hedges, cash flow hedges or hedges of the foreign currency exposure of a net investment in a foreign operation (“net investment hedges”). Additionally, for derivatives not designated as hedging instruments, the Company categorizes those economic hedges as other derivatives. Derivative instruments are recognized at fair value in the Consolidated Balance Sheets. The change in fair value of the derivative instruments is recognized in the Consolidated Statements of Earnings or Consolidated Statements of Comprehensive Income depending upon the type of hedge as further discussed below. The Company classifies cash flows from its derivative programs with the activities that correspond to the underlying hedged items in the Consolidated Statements of Cash Flows. As a result of its use of derivative instruments, the Company is exposed to the risk that its counterparties will fail to meet their contractual obligations. To mitigate counterparty credit risk, the Company has a policy of only entering into derivative contracts with carefully selected major financial institutions based on their credit ratings and other factors, and the Company maintains dollar risk limits that correspond to each financial institution's credit rating and other factors. The Company's established policies and procedures for mitigating credit risk include reviewing and establishing limits for credit exposure and periodically reassessing the creditworthiness of its counterparties. Master netting agreements also mitigate credit exposure to counterparties by permitting the Company to net amounts due from the Company to a counterparty against amounts due to the Company from the same counterparty under certain conditions. To further mitigate credit exposure to counterparties, the Company has collateral security agreements, which allows the Company to hold collateral from, or require the Company to post collateral to counterparties when aggregate derivative fair values exceed contractually established thresholds which are generally based on the credit ratings of the Company and its counterparties. If the Company's credit rating falls below a specified credit rating, the counterparty has the right to request full collateralization of the derivatives' net liability position. Conversely, if the counterparty's credit rating falls below a specified credit rating, the Company has the right to request full collateralization of the derivatives' net liability position. Collateral is generally posted within two business days. The fair value of the Company's derivatives with credit contingent features in a net liability position was $108 million and $106 million at October 31, 2023 and 2022, respectively, most of which were fully collateralized within two business days. Under the Company's derivative contracts, the counterparty can terminate all outstanding trades following a covered change of control event affecting the Company that results in the surviving entity being rated below a specified credit rating. This credit contingent provision did not affect the Company's financial position or cash flows as of October 31, 2023 and 2022. Fair Value Hedges The Company issues long-term debt in U.S. dollars based on market conditions at the time of financing. The Company may enter into fair value hedges, such as interest rate swaps, to reduce the exposure of its debt portfolio to changes in fair value resulting from changes in interest rates by achieving a primarily U.S. dollar LIBOR-based floating interest rate which was replaced with SOFR starting in July of fiscal 2023. The swap transactions generally involve principal and interest obligations for U.S. dollar-denominated amounts. Alternatively, the Company may choose not to swap fixed for floating interest payments or may terminate a previously executed swap if it believes a larger proportion of fixed-rate debt would be beneficial. When investing in fixed-rate instruments, the Company may enter into interest rate swaps that convert the fixed interest payments into variable interest payments and may designate these swaps as fair value hedges. For derivative instruments that are designated and qualify as fair value hedges, the Company recognizes the change in fair value of the derivative instrument, as well as the offsetting change in the fair value of the hedged item, in Interest and other, net in the Consolidated Statements of Earnings in the period of change. Cash Flow Hedges The Company uses forward contracts designated as cash flow hedges to protect against the foreign currency exchange rate risks inherent in its forecasted net revenue and, to a lesser extent, cost of sales, operating expenses, and intercompany loans denominated in currencies other than the U.S. dollar. The Company's foreign currency cash flow hedges mature generally within twelve months; however, forward contracts associated with sales-type and direct-financing leases and intercompany loans extend for the duration of the lease or loan term, which can extend up to five years. For derivative instruments that are designated and qualify as cash flow hedges, and as long as they remain highly effective, the Company records the changes in fair value of the derivative instrument in Accumulated other comprehensive loss as a separate component of equity in the Consolidated Balance Sheets and subsequently reclassifies these amounts into earnings in the same financial statement line item when the hedged transaction is recognized. Net Investment Hedges The Company uses forward contracts designated as net investment hedges to hedge net investments in certain foreign subsidiaries whose functional currency is the local currency. The Company records the changes in the fair value of the hedged items in cumulative translation adjustment as a separate component of equity in the Consolidated Balance Sheets. Other Derivatives Other derivatives not designated as hedging instruments consist primarily of forward contracts used to hedge foreign currency-denominated balance sheet exposures. The Company also uses total return swaps, based on equity or fixed income indices, to hedge its executive deferred compensation plan liability. For derivative instruments not designated as hedging instruments, the Company recognizes changes in fair value of the derivative instrument, as well as the offsetting change in the fair value of the hedged item, in Interest and other, net in the Consolidated Statements of Earnings in the period of change. Hedge Effectiveness |
Contingencies | Contingencies |
Warranties | Warranties one |
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 Consolidated Financial Statements. In November 2023, the FASB issued guidance to improve the disclosures about a public entity’s reportable segments and address requests from investors for additional, more detailed information about a reportable segment’s expenses. The Company is required to adopt the guidance in the first quarter of fiscal 2025, though early adoption is permitted. The Company is currently evaluating the impact of this amendment on its Consolidated Financial Statements. In December 2023, the FASB issued guidance to provide disaggregated income tax disclosures on the rate reconciliation and income taxes paid. The Company is required to adopt the guidance in the first quarter of fiscal 2026, though early adoption is permitted. The Company is currently evaluating the impact of this amendment on its Consolidated Financial Statements. |
Pension and Other Postretirement Plans | The following is a description of the valuation methodologies used to measure plan assets at fair value. Investments in publicly traded equity securities are valued using the closing price on the measurement date as reported on the stock exchange on which the individual securities are traded. For corporate, government backed debt securities, and some other investments, fair value is based on observable inputs of comparable market transactions. The valuation of certain real estate funds, insurance group annuity contracts and alternative investments, such as limited partnerships and joint ventures, may require significant management judgment and involves a level of uncertainty. The valuation is generally based on fair value as reported by the asset manager and adjusted for cash flows, if necessary. In making such an assessment, a variety of factors are reviewed by management, including, but are not limited to, the timeliness of fair value as reported by the asset manager and changes in general economic and market conditions subsequent to the last fair value reported by the asset manager. The use of different techniques or assumptions to estimate fair value could result in a different fair value measurement at the reporting date. Cash and cash equivalents includes money market funds, which are valued based on cost, which approximates fair value. Other than those assets that have quoted prices from an active market, investments are generally classified in Level 2 or Level 3 of the fair value hierarchy based on the lowest level input that is significant to the fair value measure in its entirety. Investments measured using net asset value as a practical expedient are not categorized within the fair value hierarchy. |
Investment Policy | Investment Policy The Company's investment strategy is to seek a competitive rate of return relative to an appropriate level of risk depending on the funded status of each plan and the timing of expected benefit payments. The majority of the plans’ investment managers employ active investment management strategies with the goal of outperforming the broad markets in which they invest. Risk management practices include diversification across asset classes and investment styles and periodic rebalancing toward asset allocation targets. A number of the plans’ investment managers are authorized to utilize derivatives for investment or liability exposures, and the Company may utilize derivatives to effect asset allocation changes or to hedge certain investment or liability exposures. Asset allocation decisions are typically made by an independent board of trustees for the specific plan. Investment objectives are designed to generate returns that will enable the plan to meet its future obligations. In some countries, local regulations may restrict asset allocations, typically leading to a higher percentage of investment in fixed income securities than would otherwise be deployed. The Company reviews the investment strategy and provides a recommended list of investment managers for each country plan, with final decisions on asset allocation and investment managers made by the board of trustees or investment committees for the specific plan. |
Basis for Expected Long-Term Rate of Return on Plan Assets | Basis for Expected Long-Term Rate of Return on Plan Assets The expected long-term rate of return on plan assets reflects the expected returns for each major asset class in which the plan invests and the weight of each asset class in the target mix. Expected asset returns reflect the current yield on government bonds, risk premiums for each asset class and expected real returns, which considers each country’s specific inflation outlook. Because the Company’s investment policy is to employ primarily active investment managers who seek to outperform the broader market, the expected returns are adjusted to reflect the expected additional returns, net of fees. |
Fair Value | Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date. Fair Value Hierarchy The Company uses valuation techniques that are based upon observable and unobservable inputs. Observable inputs are developed using market data such as publicly available information and reflect the assumptions market participants would use, while unobservable inputs are developed using the best information available about the assumptions market participants would use. Assets and liabilities are classified in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement: Level 1—Quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2—Quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability and market-corroborated inputs. Level 3—Unobservable inputs for assets or liabilities. The fair value hierarchy gives the highest priority to observable inputs and lowest priority to unobservable inputs. For the fiscal years ended October 31, 2023 and 2022, there were no transfers between levels within the fair value hierarchy. Valuation Techniques Cash Equivalents and Investments: The Company holds time deposits, money market funds, debt securities primarily consisting of corporate and foreign government notes and bonds. The Company values cash equivalents using quoted market prices, alternative pricing sources, including net asset value, or models utilizing market observable inputs. The fair value of debt and equity investments was based on quoted market prices or model-driven valuations using inputs primarily derived from or corroborated by observable market data, and, in certain instances, valuation models that utilize assumptions which cannot be corroborated with observable market data. Equity and other securities include investments in marketable and non-marketable securities. In evaluating non-marketable securities for impairment or observable price changes, the Company uses valuation techniques using the best information available, and may include quoted market prices, market comparables and discounted cash flow projections. Derivative Instruments: The Company uses forward contracts, interest rate and total return swaps to hedge certain foreign currency and interest rate exposures. The Company uses industry standard valuation models to measure fair value. Where applicable, these models project future cash flows and discount the future amounts to present value using market-based observable inputs, including interest rate curves, the Company and counterparties' credit risk, foreign currency exchange rates, and forward and spot prices for currencies and interest rates. See Note 13, “Financial Instruments,” for a further discussion of the Company's use of derivative instruments. Other Fair Value Disclosures Short-Term and Long-Term Debt: T he Company estimates the fair value of its debt primarily using an expected present value technique, which is based on observable market inputs using interest rates currently available to companies of similar credit standing for similar terms and remaining maturities, and considering its own credit risk. The portion of the Company's debt that is hedged is reflected in the Consolidated Balance Sheets as an amount equal to the debt's carrying amount and a fair value adjustment representing changes in the fair value of the hedged debt obligations arising from movements in benchmark interest rates. As of October 31, 2023, the estimated fair value of the Company's short-term and long-term de bt was $12.2 billion and the carrying value was $12.4 billion. As of October 31, 2022, the estimated fair value of the Company's short-term and long-term debt was $12.2 billion and the carrying value was $12.5 billion. If measured at fair value in the Consolidated Balance Sheets, short-term and long-term debt would be classified in Level 2 of the fair value hierarchy. Other Financial Instruments: For the balance of the Company's financial instruments, primarily accounts receivable, accounts payable and financial liabilities included in other accrued liabilities, the carrying amounts approximate fair value due to their short nature. If measured at fair value in the Consolidated Balance Sheets, these other financial instruments would be classified in Level 2 or Level 3 of the fair value hierarchy. Non-Recurring Fair Value Measurements 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 fiscal 2023 and 2022, the Company recorded a net unrealized loss of $45 million and $17 million, respectively, which included impairments of $50 million and $24 million for the same respective periods. For fiscal 2021, the Company recorded an unrealized gain of $64 million and no impairment charges on these investments. These amounts are reflected in Interest and other, net in the Consolidated Statements of Earnings. If measured at fair value in the Consolidated Balance Sheets, these would generally be classified in Level 3 of the fair value hierarchy. These adjustments are based on observable price changes for certain equity investments without readily determinable fair value. For investments still held as of October 31, 2023, the cumulative upward adjustments for observable price changes was $33 million and cumulative downward adjustments 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 ROU assets based on the lease liability, adjusted for lease prepayments, lease incentives received and the lessee's initial direct costs. Fair value adjustments are made to these non-financial assets in the period an impairment charge is recognized. In fiscal 2023, 2022 and 2021, the Company recorded a ROU asset impairment charge of $18 million, $5 million and $89 million, respectively, in Transformation costs in the Consolidated Statements of Earnings as the carrying value of certain ROU assets exceeded its fair value. If measured at fair value in the Consolidated Balance Sheets, these would generally be classified in Level 3 of the fair value hierarchy. |
Net Earnings per share | The Company calculates basic net EPS using net earnings and the weighted-average number of shares outstanding during the reporting period. Diluted net EPS includes the weighted-average dilutive effect of outstanding restricted stock units, stock options, and performance-based awards. |
Credit Quality Indicators | 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. |
Organization, Consolidation and
Organization, Consolidation and Presentation of Financial Statements (Tables) | 12 Months Ended |
Oct. 31, 2023 | |
Accounting Policies [Abstract] | |
Schedule of weighted average assumptions used to calculate net benefit (credit) cost | The following table provides the impact changes in the weighted-average assumptions of discount rates, the expected increase in compensation levels and the expected long-term return on plan assets would have had on the net periodic benefit cost for fiscal 2023: Change in basis Change in Net Periodic Benefit Cost In millions Assumptions: Discount rate (25) $ 17 Expected increase in compensation levels 25 3 Expected long-term return on plan assets (25) $ 25 The weighted-average assumptions used to calculate the net benefit cost (credit) in the table above for fiscal 2023, 2022 and 2021 were as follows: For the fiscal years ended October 31, 2023 2022 2021 2023 2022 2021 Defined Benefit Plans Post-Retirement Benefit Plans Discount rate used to determine benefit obligation 3.9 % 1.3 % 1.0 % 6.0 % 3.0 % 2.8 % Discount rate used to determine service cost 4.2 % 1.7 % 1.3 % 5.7 % 2.7 % 2.6 % Discount rate used to determine interest cost 3.9 % 1.1 % 0.8 % 5.9 % 2.6 % 2.3 % Expected increase in compensation levels 3.0 % 2.6 % 2.5 % — — — Expected long-term return on plan assets 5.1 % 3.2 % 3.3 % 4.3 % 3.3 % 2.3 % Interest crediting rate (1) 2.4 % 2.5 % 2.5 % 4.3 % 2.7 % 2.7 % (1) The average assumed interest credited for HPE's cash balance plans and postretirement plans, as applicable. |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Oct. 31, 2023 | |
Segment Reporting [Abstract] | |
Segment Operating Results from Continuing Operations | Segment Operating Results Compute HPC & AI Storage Intelligent Edge Financial Services Corporate Investments and Other Total In millions Fiscal 2023 Net revenue $ 11,129 $ 3,775 $ 4,329 $ 5,186 $ 3,466 $ 1,250 $ 29,135 Intersegment net revenue 307 138 86 18 14 — 563 Total segment net revenue $ 11,436 $ 3,913 $ 4,415 $ 5,204 $ 3,480 $ 1,250 $ 29,698 Segment earnings (loss) from operations $ 1,569 $ 47 $ 429 $ 1,419 $ 317 $ (172) $ 3,609 Fiscal 2022 Net revenue $ 12,627 $ 3,078 $ 4,546 $ 3,665 $ 3,326 $ 1,254 $ 28,496 Intersegment net revenue 223 114 57 9 13 1 417 Total segment net revenue $ 12,850 $ 3,192 $ 4,603 $ 3,674 $ 3,339 $ 1,255 $ 28,913 Segment earnings (loss) from operations $ 1,821 $ 11 $ 641 $ 549 $ 399 $ (92) $ 3,329 Fiscal 2021 Net revenue $ 12,158 $ 3,037 $ 4,553 $ 3,292 $ 3,388 $ 1,356 $ 27,784 Intersegment net revenue 251 147 82 10 13 — 503 Total segment net revenue $ 12,409 $ 3,184 $ 4,635 $ 3,302 $ 3,401 $ 1,356 $ 28,287 Segment earnings (loss) from operations $ 1,382 $ 231 $ 716 $ 509 $ 390 $ (95) $ 3,133 |
Reconciliation of Segment Operating Results | The reconciliation of segment operating results to Consolidated Statement of Earnings results was as follows: For the fiscal years ended October 31, 2023 2022 2021 In millions Net Revenue: Total segments $ 29,698 $ 28,913 $ 28,287 Elimination of intersegment net revenue (563) (417) (503) Total consolidated net revenue $ 29,135 $ 28,496 $ 27,784 Earnings before taxes: Total segment earnings from operations $ 3,609 $ 3,329 $ 3,133 Unallocated corporate costs and eliminations (464) (303) (285) Stock-based compensation expense (428) (391) (372) Amortization of initial direct costs — (4) (8) Amortization of intangible assets (288) (293) (354) Impairment of goodwill — (905) — Transformation costs (283) (473) (930) Disaster recovery (charges) 12 (159) (16) Acquisition, disposition and other related charges (69) (19) (36) Interest and other, net (156) (188) (211) Tax indemnification and other adjustments 55 (67) 65 Non-service net periodic (cost) benefit credit (3) 134 70 Litigation judgment — — 2,351 Earnings from equity interests 245 215 180 Total earnings before provision for taxes $ 2,230 $ 876 $ 3,587 |
Reconciliation of Assets from Segments to Consolidated | Total assets by segment and the reconciliation of segment assets to total assets as per Consolidated Balance Sheets were as follows: As of October 31 2023 2022 In millions Compute $ 16,120 $ 16,881 HPC & AI 5,787 5,997 Storage 7,195 7,484 Intelligent Edge 5,352 4,594 Financial Services 14,539 14,837 Corporate Investments and Other 1,401 1,110 Corporate and unallocated assets 6,759 6,220 Total assets $ 57,153 $ 57,123 |
Net Revenue by Geographical Areas | Net revenue by geographic region was as follows: For the fiscal years ended October 31, 2023 2022 2021 In millions Americas U.S. $ 10,369 $ 9,425 $ 8,850 Americas excluding U.S. 2,208 1,964 1,825 Total Americas 12,577 11,389 10,675 Europe, Middle East and Africa 10,151 10,292 10,329 Asia Pacific and Japan 6,407 6,815 6,780 Total consolidated net revenue $ 29,135 $ 28,496 $ 27,784 |
Net Property, Plant and Equipment by Geographical Areas | Property, plant and equipment, net by country in which the Company's operates was as follows: As of October 31 2023 2022 In millions U.S. $ 2,803 $ 3,035 Other countries 3,186 2,749 Total property, plant and equipment, net $ 5,989 $ 5,784 |
Transformation Programs (Tables
Transformation Programs (Tables) | 12 Months Ended |
Oct. 31, 2023 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Related Costs | The components of the transformation costs relating to the Cost Optimization and Prioritization Plan were as follows: For the fiscal years ended October 31, 2023 2022 2021 In millions Program management $ 9 $ 27 $ 83 IT costs 26 26 14 Restructuring charges 226 201 598 Total $ 261 $ 254 $ 695 The components of transformation costs relating to HPE Next Plan were as follows: For the fiscal years ended October 31, 2023 2022 2021 In millions Program management $ — $ 7 $ 14 IT costs 91 184 174 Restructuring charges 16 13 22 Gains on real estate sales (85) (8) (3) Impairment on real estate assets — 11 4 Other 3 13 29 Total $ 25 $ 220 $ 240 |
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 148 78 6 10 Cash payments (189) (64) (11) (9) Non-cash items 8 (9) — 1 Liability as of October 31, 2023 $ 152 $ 127 $ 6 $ 27 Total costs incurred to date as of October 31, 2023 $ 793 $ 561 $ 1,267 $ 270 Total expected costs to be incurred as of October 31, 2023 $ 820 $ 575 $ 1,267 $ 275 |
Retirement and Post-Retiremen_2
Retirement and Post-Retirement Benefit Plans (Tables) | 12 Months Ended |
Oct. 31, 2023 | |
Retirement Benefits [Abstract] | |
Summary of Net Benefit Cost | The Company's net pension and post-retirement benefit costs that were directly attributable to the eligible employees, retirees and other former employees of Hewlett Packard Enterprise and recognized in the Consolidated Statements of Earnings for fiscal 2023, 2022 and 2021 are presented in the table below. For the fiscal years ended October 31, 2023 2022 2021 2023 2022 2021 Defined Benefit Plans Post-Retirement Benefit Plans In millions Service cost $ 53 $ 78 $ 97 $ 1 $ 1 $ 1 Interest cost (1) 386 154 118 8 4 4 Expected return on plan assets (1) (539) (450) (479) (2) (2) (1) Amortization and Deferrals (1) : Actuarial loss (gain) 160 167 296 (6) (2) (2) Prior service benefit (10) (10) (13) — — — Net periodic benefit cost (credit) 50 (61) 19 1 1 2 Settlement loss and special termination benefits (1) 6 5 7 — — — Total net benefit cost (credit) $ 56 $ (56) $ 26 $ 1 $ 1 $ 2 (1) |
Schedule of weighted average assumptions used to calculate net benefit (credit) cost | The following table provides the impact changes in the weighted-average assumptions of discount rates, the expected increase in compensation levels and the expected long-term return on plan assets would have had on the net periodic benefit cost for fiscal 2023: Change in basis Change in Net Periodic Benefit Cost In millions Assumptions: Discount rate (25) $ 17 Expected increase in compensation levels 25 3 Expected long-term return on plan assets (25) $ 25 The weighted-average assumptions used to calculate the net benefit cost (credit) in the table above for fiscal 2023, 2022 and 2021 were as follows: For the fiscal years ended October 31, 2023 2022 2021 2023 2022 2021 Defined Benefit Plans Post-Retirement Benefit Plans Discount rate used to determine benefit obligation 3.9 % 1.3 % 1.0 % 6.0 % 3.0 % 2.8 % Discount rate used to determine service cost 4.2 % 1.7 % 1.3 % 5.7 % 2.7 % 2.6 % Discount rate used to determine interest cost 3.9 % 1.1 % 0.8 % 5.9 % 2.6 % 2.3 % Expected increase in compensation levels 3.0 % 2.6 % 2.5 % — — — Expected long-term return on plan assets 5.1 % 3.2 % 3.3 % 4.3 % 3.3 % 2.3 % Interest crediting rate (1) 2.4 % 2.5 % 2.5 % 4.3 % 2.7 % 2.7 % (1) The average assumed interest credited for HPE's cash balance plans and postretirement plans, as applicable. |
Schedule of funded status of the direct plans | The funded status of the plans was as follows: As of October 31, 2023 2022 2023 2022 Defined Benefit Plans Post-Retirement Benefit Plans In millions Change in fair value of plan assets: Fair value—beginning of year $ 9,915 $ 15,354 $ 60 $ 60 Transfers — (6) — — Reimbursement of benefit payments (1) (82) — — — Actual return on plan assets (315) (3,176) 4 (3) Employer contributions 179 160 6 6 Participant contributions 24 28 7 6 Benefits paid (449) (429) (9) (9) Settlement (29) (54) — — Currency impact 636 (1,962) — — Fair value—end of year $ 9,879 $ 9,915 $ 68 $ 60 Change in benefit obligation: Projected benefit obligation—beginning of year $ 9,517 $ 14,872 $ 138 $ 161 Addition/deletion of plans (2) 1 — — — Service cost 53 78 1 1 Interest cost 386 154 8 4 Participant contributions 24 28 7 6 Actuarial (gain) loss (756) (3,253) 3 (24) Benefits paid (449) (429) (9) (9) Plan amendments — (1) — — Settlement (29) (54) — — Special termination benefits 2 1 — — Currency impact 613 (1,879) — (1) Projected benefit obligation—end of year $ 9,362 $ 9,517 $ 148 $ 138 Funded status at end of year $ 517 $ 398 $ (80) $ (78) Accumulated benefit obligation $ 9,233 $ 9,376 $ — $ — (1) For fiscal 2023, the German Contractual Trust Arrangements reimbursed HPE for benefit payments of approximately $82 million. (2) |
Schedule of weighted-average assumptions used to calculate the projected benefit obligations | The weighted-average assumptions used to calculate the projected benefit obligations were as follows: As of October 31, 2023 2022 2023 2022 Defined Benefit Plans Post-Retirement Benefit Plans Discount rate 4.4 % 3.9 % 6.5 % 6.0 % Expected increase in compensation levels 2.9 % 3.0 % — — Interest crediting rate 2.4 % 2.4 % 5.3 % 4.3 % |
Schedule of net amount recognized for the direct plans in the entity's Combined Balance Sheets | The net amounts recognized for defined benefit and post-retirement benefit plans in the Company's Consolidated Balance Sheets were as follows: As of October 31, 2023 2022 2023 2022 Defined Benefit Plans Post-Retirement Benefit Plans In millions Non-current assets $ 1,313 $ 1,287 $ — $ — Current liabilities (51) (43) (8) (7) Non-current liabilities (745) (846) (72) (71) Funded status at end of year $ 517 $ 398 $ (80) $ (78) |
Summary of pre-tax net actuarial loss and prior service benefit recognized in accumulated other comprehensive loss for direct defined benefit plans | The following table summarizes the pre-tax net actuarial loss and prior service benefit recognized in accumulated other comprehensive loss for the defined benefit plans: As of October 31, 2023 Defined Post-Retirement In millions Net actuarial loss (gain) $ 2,669 $ (11) Prior service benefit 3 — Total recognized in accumulated other comprehensive loss $ 2,672 $ (11) |
Schedule of direct defined benefit plans with projected benefit obligations exceeding the fair value of plan assets | Defined benefit plans with projected benefit obligations exceeding the fair value of plan assets were as follows: As of October 31, 2023 2022 In millions Aggregate fair value of plan assets $ 1,969 $ 1,907 Aggregate projected benefit obligation $ 2,765 $ 2,795 |
Schedule of direct defined benefit plans with accumulated benefit obligations exceeding the fair value of plan assets | Defined benefit plans with accumulated benefit obligations exceeding the fair value of plan assets were as follows: As of October 31, 2023 2022 In millions Aggregate fair value of plan assets $ 1,969 $ 412 Aggregate accumulated benefit obligation $ 2,675 $ 1,206 |
Schedule of fair value of direct plan non-U.S. defined benefit plan assets by asset category within the fair value hierarchy | The table below sets forth the fair value of non-U.S. defined benefit plan assets by asset category within the fair value hierarchy as of October 31, 2023 and 2022. As of October 31, 2023 As of October 31, 2022 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total In millions Asset Category: Equity Securities U.S. $ 543 $ 12 $ — $ 555 $ 510 $ 9 $ — $ 519 Non-U.S. 110 212 — 322 214 96 — 310 Debt securities Corporate — 1,277 — 1,277 — 961 — 961 Government (1) — 3,883 — 3,883 — 4,853 — 4,853 Other (2) — 661 799 1,460 — 131 932 1,063 Alternative investments Private Equity — 5 41 46 — 4 46 50 Hybrids (3) — 358 177 535 — 785 182 967 Hybrids at NAV (4) 358 377 Common Contractual Funds at NAV (5) Equities at NAV 988 922 Fixed Income at NAV 471 449 Emerging Markets at NAV 284 263 Alternative investments at NAV 1 16 Real Estate Funds (6) 20 327 237 584 22 311 164 497 Insurance Group Annuity Contracts — 88 20 108 — 84 21 105 Cash and Cash Equivalents 222 93 — 315 173 479 — 652 Other (7) 17 23 — 40 27 (13) 1 15 Obligation to return cash received from repurchase agreements (1) — (1,348) — (1,348) — (2,104) — (2,104) Total $ 912 $ 5,591 $ 1,274 $ 9,879 $ 946 $ 5,596 $ 1,346 $ 9,915 (1) Repurchase agreements, primarily in the UK, represent the plans’ short-term borrowing to hedge against interest rate and inflation risks. Investments in approximately $2.3 billion and $3.0 billion of government bonds collateralize this short-term borrowing at October 31, 2023 and 2022, respectively. The plans have an obligation to return the cash after the term of the agreements. Due to the short-term nature of the agreements, the outstanding balance of the obligation approximates fair value. (2) Includes funds that invest primarily in asset-backed securities, mortgage-backed securities, collateralized loan obligations, and/or private debt investments. Primary valuation techniques for level 3 investments include discounted cash flows and broker quotes and/or 3rd party pricing services. Significant unobservable inputs include yields which are determined by considering the market yield of comparable public debt instruments adjusted for estimated losses to reflect where the expected recovery rate would be less than 100%, discount rates, and internal rate of return (IRR). The yields ranged from 6% to 22%, with the weighted average around 10%. In the prior year, the yields ranged from 4% to 18%, with the weighted average around 7%. The discount rates ranged from 4% to 5%, with the weighted average around 4%. In the prior year, the discount rates ranged from 1% to 5%, with the weighted average around 3%. The IRR ranged from 5% to 21%, with the main weighted average around 10%. In the prior year, the IRR ranged from 4% to 11%, with the main weighted average around 8%. Generally, an increase in yield and discounted rates may result in a decrease in the fair value of certain investments. (3) Includes funds, primarily in the UK, that invest in both private and public equities, as well as emerging markets across all sectors. The funds also hold fixed income and derivative instruments to hedge interest rate and inflation risk. In addition, the funds include units in transferable securities, collective investment schemes, money market funds, asset-backed income, cash, and deposits. Primary valuation techniques for level 3 investments include discounted cash flows and book value or net asset value. Significant unobservable inputs include discount rates. The discount rates ranged from 3% to 28%, with the weighted average around 14%. In the prior year, the discount rates ranged from 3% to 30%, with the weighted average around 12%. Generally, an increase in discount rates may result in a decrease in the fair value of certain investments. (4) Includes a pooled fund in the UK, that seeks a rate of return with direct or indirect linkage to UK inflation by investing in vehicles including bonds, long lease property, income strips, asset-backed securities, and index linked assets. Units are available for subscription on the first business day of each calendar month at net asset value. There are no redemption restrictions or future commitments on these investments. (5) Common Contractual Funds (“CCFs”) are investment arrangements in which institutional investors pool their assets. Units may be acquired in four different sub-funds focused on equities, fixed income, alternative investments, and emerging markets. Each sub-fund is invested in accordance with the fund's investment objective and units are issued in relation to each sub-fund. While the sub-funds are not publicly traded, the custodian strikes a net asset value either once or twice a month, depending on the sub-fund. There are no redemption restrictions or future commitments on these investments. (6) Includes funds, primarily in Germany, that invest in a diversified portfolio of European real estate assets exposed to logistics real estate properties, food retailing properties, residential and commercial properties, and properties under development. Primary valuation techniques for level 3 investments include the income capitalization approach and cost approach. Significant unobservable inputs include rental yield and IRR. The rental yield rates ranged from 4% to 6%, with the weighted average around 4%. In the prior year, the rental yield rates ranged from 3% to 6%, with the weighted average around 4%. The IRR ranged from 5% to 8%, with the main weighted average around 7%. In the prior year, the IRR ranged from 4% to 7%, with the main weighted average around 6%. Generally, an increase in rental yield rates may result in a decrease in the fair value of certain investments. (7) Includes life insurance investment policies, unsettled transactions, and derivative instruments. As of October 31, 2023, the derivative instruments include synthetic equity swaps held by the UK plans with equity exposure of $272 million. |
Schedule of changes in fair value measurements of Level 3 investments for Direct non-U.S. defined benefit plans | Changes in fair value measurements of Level 3 investments for the non-U.S. defined benefit plans were as follows: For the fiscal year ended October 31, 2023 Alternative Investments Debt-Other Private Hybrids Real Insurance Other Total In millions Balance at beginning of year $ 932 $ 46 $ 182 $ 164 $ 21 $ 1 $ 1,346 Actual return on plan assets: Relating to assets held at the reporting date 72 (8) 2 (6) (1) — 59 Relating to assets sold during the period — 3 — — — — 3 Purchases, sales, and settlements (205) — (7) 79 — (1) (134) Balance at end of year $ 799 $ 41 $ 177 $ 237 $ 20 $ — $ 1,274 For the fiscal year ended October 31, 2022 Alternative Investments Debt-Other Private Hybrids Real Insurance Other Total In millions Balance at beginning of year $ 748 $ 46 $ 116 $ 48 $ 33 $ 1 $ 992 Actual return on plan assets: Relating to assets held at the reporting date (97) — 21 (3) (11) — (90) Relating to assets sold during the period — 7 — — — — 7 Purchases, sales, and settlements 281 (7) 45 119 (1) — 437 Balance at end of year $ 932 $ 46 $ 182 $ 164 $ 21 $ 1 $ 1,346 |
Schedule of weighted-average target and actual asset allocations across the benefit plans | The weighted-average target and actual asset allocations across the benefit plans at the respective measurement dates for the non-U.S. defined benefit plans were as follows: Defined Benefit Plans Plan Assets 2023 Target Allocation 2023 2022 Public equity securities 21.8 % 20.3 % Private/hybrid equity securities 9.5 % 14.2 % Real estate and other (1) 6.3 % 5.2 % Equity-related investments (1) 46.1 % 37.6 % 39.7 % Debt securities 52.0 % 59.2 % 53.7 % Cash and cash equivalents 1.9 % 3.2 % 6.6 % Total 100.0 % 100.0 % 100.0 % (1) Included in Real estate and other investments are synthetic equity swaps with equity exposure of $272 million, which is held in the UK plans as of October 31, 2023. |
Schedule of estimated future benefits payable for the Company's direct retirement plans | As of October 31, 2023, estimated future benefits payments for the Company's retirement plans were as follows: Fiscal year Defined Post-Retirement In millions 2024 $ 558 $ 12 2025 523 13 2026 536 13 2027 552 12 2028 573 13 Next five fiscal years to October 31, 2033 $ 2,999 $ 63 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Oct. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of stock based compensation expense and the resulting tax benefits | Stock-based compensation expense and the resulting tax benefits were as follows: For the fiscal years ended October 31, 2023 2022 2021 In millions Stock-based compensation expense $ 428 $ 391 $ 382 Income tax benefit (92) (75) (70) Stock-based compensation expense, net of tax $ 336 $ 316 $ 312 |
Stock-based compensation expense | Stock-based compensation expense as presented in the table above is recorded within the following cost and expense lines in the Consolidated Statements of Earnings. For the fiscal years ended October 31, 2023 2022 2021 In millions Cost of sales $ 47 $ 46 $ 40 Research and development 161 143 124 Selling, general and administrative 220 202 208 Acquisition, disposition and other related charges — — 10 Stock-based compensation expense $ 428 $ 391 $ 382 |
Schedule of restricted stock award activity | The following table summarizes restricted stock unit activity for the year ended October 31, 2023: Shares Weighted-Average Grant Date Fair Value Per Share In thousands Outstanding at beginning of year 51,902 $ 14 Granted and replacement awards for acquisitions 30,088 16 Vested (24,473) 14 Forfeited/canceled (3,128) 15 Outstanding at end of year 54,389 $ 15 |
Taxes on Earnings (Tables)
Taxes on Earnings (Tables) | 12 Months Ended |
Oct. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Schedule of domestic and foreign components of earnings before taxes | The domestic and foreign components of Net earnings from operations before taxes were as follows: For the fiscal years ended October 31, 2023 2022 2021 In millions U.S. $ (1,105) $ (1,138) $ (1,128) Non-U.S. 3,335 2,014 4,715 $ 2,230 $ 876 $ 3,587 Foreign earnings in fiscal 2021 were higher as compared to fiscal 2023 and 2022, primarily as a result of the income from the Itanium litigation judgment. |
Schedule of provision for (benefit from) taxes on earnings | The Provision for taxes on Net earnings from operations were as follows: For the fiscal years ended October 31, 2023 2022 2021 In millions U.S. federal taxes: Current $ — $ 12 $ 26 Deferred (88) (98) (79) Non-U.S. taxes: Current 256 288 305 Deferred 23 (143) (116) State taxes: Current 16 (43) (4) Deferred (2) (8) 28 $ 205 $ 8 $ 160 |
Schedule of differences between the U.S. federal statutory income tax rate and effective tax rate | The differences between the U.S. federal statutory income tax rate and the Company's effective tax rate were as follows: For the fiscal years ended October 31, 2023 2022 2021 U.S. federal statutory income tax rate 21.0 % 21.0 % 21.0 % State income taxes, net of federal tax benefit 0.9 % 2.8 % 0.7 % Lower rates in other jurisdictions, net (4.4) % (0.9) % (7.6) % Valuation allowance (2.8) % (31.5) % (10.0) % U.S. permanent differences (1.5) % 6.0 % 3.6 % U.S. R&D credit (2.1) % (5.1) % (1.3) % Uncertain tax positions (2.0) % (15.6) % (0.9) % Goodwill impairment — % 21.5 % — % Tax law changes — % — % (1.1) % Other, net 0.1 % 2.7 % 0.1 % 9.2 % 0.9 % 4.5 % |
Schedule of reconciliation of gross unrecognized tax benefits | A reconciliation of unrecognized tax benefits is as follows: As of October 31, 2023 2022 2021 In millions Balance at beginning of year $ 674 $ 2,131 $ 2,159 Increases: For current year's tax positions 67 81 24 For prior years' tax positions 20 41 64 Decreases: For prior years' tax positions (2) (48) (31) Statute of limitations expiration (4) (12) (44) Settlements with taxing authorities (83) (1,491) (15) Settlements related to joint and several positions indemnified by HP Inc. — (28) (26) Balance at end of year $ 672 $ 674 $ 2,131 |
Schedule of significant components of deferred tax assets and deferred tax liabilities | The significant components of deferred tax assets and deferred tax liabilities were as follows: As of October 31, 2023 2022 In millions Deferred tax assets: Loss and credit carryforwards $ 5,802 $ 7,222 Inventory valuation 90 87 Intercompany prepayments 325 321 Warranty 49 61 Employee and retiree benefits 184 247 Restructuring 52 55 Deferred revenue 658 601 Intangible assets 107 113 Capitalized R&D 44 — Lease liabilities 209 185 Other 196 269 Total deferred tax assets 7,716 9,161 Valuation allowance (5,294) (6,817) Total deferred tax assets net of valuation allowance 2,422 2,344 Deferred tax liabilities: Unremitted earnings of foreign subsidiaries (190) (170) ROU assets (192) (167) Fixed assets (102) (200) Total deferred tax liabilities (484) (537) Net deferred tax assets and liabilities $ 1,938 $ 1,807 |
Schedule of current and long-term deferred tax assets and liabilities | Deferred tax assets and liabilities included in the Consolidated Balance Sheets are as follows: As of October 31, 2023 2022 In millions Deferred tax assets $ 2,264 $ 2,127 Deferred tax liabilities (326) (320) Deferred tax assets net of deferred tax liabilities $ 1,938 $ 1,807 |
Schedule of tax credit carryforwards | , the Company had recorded deferred tax assets for various tax credit carryforwards as follows: Carryforward Valuation Allowance Initial Year of Expiration In millions U.S. foreign tax credits $ 904 $ (875) 2026 U.S. research and development and other credits 215 — 2029 Tax credits in state and foreign jurisdictions 164 (114) 2024 Balance at end of year $ 1,283 $ (989) Total valuation allowances decreased by $1.5 billion in fiscal 2023, primarily from the expiration of U.S. federal capital loss carryforwards. |
Balance Sheet Details (Table)
Balance Sheet Details (Table) | 12 Months Ended |
Oct. 31, 2023 | |
Balance Sheet Related Disclosures [Abstract] | |
Schedule of Cash and Cash Equivalents | Cash, Cash Equivalents and Restricted Cash As of October 31, 2023 2022 In millions Cash and cash equivalents $ 4,270 $ 4,163 Restricted cash 311 600 Total $ 4,581 $ 4,763 |
Accounts Receivable, Net | Accounts Receivable, Net As of October 31, 2023 2022 In millions Accounts receivable $ 3,254 $ 3,881 Unbilled receivable 264 245 Allowances (37) (25) Total $ 3,481 $ 4,101 |
Schedule of revolving short-term financing arrangements | The allowance for doubtful accounts related to accounts receivable and changes therein were as follows: As of October 31, 2023 2022 2021 In millions Balance at beginning of year $ 25 $ 23 $ 46 Provision for credit losses 29 25 11 Adjustments to existing allowances, including write offs (17) (23) (34) Balance at end of year $ 37 $ 25 $ 23 |
Schedule of transferred trade receivables not collected from the third parties | The activity related to Hewlett Packard Enterprise's revolving short-term financing arrangements was as follows: As of October 31, 2023 2022 2021 In millions Balance at beginning of period (1) $ 163 $ 336 $ 122 Trade receivables sold 4,097 4,130 4,190 Cash receipts (4,185) (4,292) (3,975) Foreign currency and other 8 (11) (1) Balance at end of period (1) $ 83 $ 163 $ 336 (1) |
Inventory | Inventory As of October 31, 2023 2022 In millions Purchased parts and fabricated assemblies $ 2,940 $ 2,974 Finished goods 1,667 2,187 Total $ 4,607 $ 5,161 |
Property, Plant and Equipment | Property, Plant and Equipment, net As of October 31, 2023 2022 In millions Land $ 66 $ 74 Buildings and leasehold improvements 1,521 1,503 Machinery and equipment, including equipment held for lease 10,382 9,729 Gross property, plant and equipment 11,969 11,306 Accumulated depreciation (5,980) (5,522) Property, plant and equipment, net (1) $ 5,989 $ 5,784 (1) |
Long-Term Financing Receivables and Other Assets | Long-Term Financing Receivables and Other Assets As of October 31, 2023 2022 In millions Financing receivables, net $ 5,028 $ 4,512 Deferred tax assets 2,264 2,127 Prepaid pension 1,313 1,287 ROU assets 980 854 Other 1,792 1,757 Total $ 11,377 $ 10,537 |
Other Accrued Liabilities | Other Accrued Liabilities As of October 31, 2023 2022 In millions Sales and marketing programs $ 1,070 $ 1,052 Value-added and property taxes 786 902 Collateral payable 207 508 Operating lease liabilities 194 168 Warranty 167 192 Contract manufacturer liabilities 71 332 Other 1,666 1,471 Total $ 4,161 $ 4,625 |
Other Non-Current Liabilities | Other Non-Current Liabilities As of October 31, 2023 2022 In millions Deferred revenue $ 3,281 $ 2,955 Operating lease liabilities 966 851 Pension, post-retirement, and post-employment 841 944 Deferred tax liabilities 326 320 Taxes on earnings 233 271 Other 899 846 Total $ 6,546 $ 6,187 |
Accounting for Leases as a Le_3
Accounting for Leases as a Lessee (Tables) | 12 Months Ended |
Oct. 31, 2023 | |
Leases [Abstract] | |
Operating Lease Cost | Components of lease cost included in the Consolidated Statement of Earnings were as follows: For the fiscal years ended October 31, 2023 2022 2021 In millions Operating lease cost $ 200 $ 197 $ 207 Finance lease cost 4 5 5 Sublease rental income (23) (27) (35) Total lease cost $ 181 $ 175 $ 177 The weighted-average remaining lease term and the weighted-average discount rate for the operating and finance leases were as follows: As of October 31, 2023 2022 Operating Leases Finance Leases Operating Leases Finance Leases Weighted-average remaining lease term (in years) 7.2 6.5 7.8 7.5 Weighted-average discount rate 3.8 % 3.5 % 3.2 % 3.5 % Supplemental cash flow information related to leases was as follows: For the fiscal years ended October 31, Cash Flow Statement Activity 2023 2022 2021 In millions Cash outflows from operating leases Net cash used in operating activities $ 219 $ 214 $ 220 ROU assets obtained in exchange for new operating lease liabilities Non-cash activities $ 251 $ 195 $ 248 |
Supplemental Balance Sheet Information | The ROU assets and lease liabilities for operating and finance leases included in the Consolidated Balance Sheets were as follows: As of October 31, Balance Sheet Classification 2023 2022 In millions Operating Leases ROU Assets Long-term financing receivables and other assets $ 980 $ 854 Lease Liabilities: Operating lease liabilities – current Other accrued liabilities 194 168 Operating lease liabilities – non-current Other non-current liabilities 966 851 Total operating lease liabilities $ 1,160 $ 1,019 Finance Leases Finance lease ROU Assets: Property, plant and equipment, net Gross finance lease ROU assets $ 26 $ 32 Less: Accumulated depreciation (14) (11) Net finance lease ROU assets $ 12 $ 21 Lease Liabilities: Finance lease liabilities – current Notes payable and short-term borrowings $ 5 $ 5 Finance lease liabilities – non-current Long-term debt 38 43 Total finance lease liabilities $ 43 $ 48 Total ROU assets $ 992 $ 875 Total lease liabilities $ 1,203 $ 1,067 |
Operating Lease Liability Maturity | The following tables shows the future payments on the Company's operating and finance leases: As of October 31, 2023 Operating Leases Finance Leases Fiscal year In millions 2024 $ 234 $ 7 2025 215 7 2026 191 7 2027 176 7 2028 151 8 Thereafter 365 12 Total future lease payments $ 1,332 $ 48 Less: imputed interest (172) (5) Total lease liabilities $ 1,160 $ 43 |
Finance Lease Liability Maturity | The following tables shows the future payments on the Company's operating and finance leases: As of October 31, 2023 Operating Leases Finance Leases Fiscal year In millions 2024 $ 234 $ 7 2025 215 7 2026 191 7 2027 176 7 2028 151 8 Thereafter 365 12 Total future lease payments $ 1,332 $ 48 Less: imputed interest (172) (5) Total lease liabilities $ 1,160 $ 43 |
Accounting for Leases as a Le_4
Accounting for Leases as a Lessor (Tables) | 12 Months Ended |
Oct. 31, 2023 | |
Leases [Abstract] | |
Components of Financing Receivables | The components of financing receivables were as follows: As of October 31, 2023 2022 In millions Minimum lease payments receivable $ 9,363 $ 8,686 Unguaranteed residual value 438 380 Unearned income (987) (707) Financing receivables, gross 8,814 8,359 Allowance for credit losses (243) (325) Financing receivables, net 8,571 8,034 Less: current portion (3,543) (3,522) Amounts due after one year, net $ 5,028 $ 4,512 |
Scheduled Maturities of Minimum Lease Payments Receivable | As of October 31, 2023, scheduled maturities of the Company's minimum lease payments receivable were as follows: As of October 31, 2023 Fiscal year In millions 2024 $ 4,058 2025 2,512 2026 1,612 2027 819 2028 278 Thereafter 84 Total undiscounted cash flows $ 9,363 Present value of lease payments (recognized as finance receivables) $ 8,376 Difference between undiscounted cash flows and discounted cash flows $ 987 |
Credit Risk Profile of Gross Financing Receivables | The credit risk profile of gross financing receivables, based on internal risk ratings as of October 31, 2023, presented on an amortized cost basis by year of origination was as follows: As of October 31, 2023 Risk Rating Low Moderate High Fiscal Year In millions 2023 $ 2,100 $ 1,196 $ 31 2022 1,681 1,052 51 2021 868 645 57 2020 336 285 35 2019 and prior 155 223 99 Total $ 5,140 $ 3,401 $ 273 The credit risk profile of gross financing receivables, based on internal risk ratings as of October 31, 2022, 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 |
Schedule of Allowance for Doubtful Accounts for Financing Receivables | The allowance for credit losses for financing receivables and changes therein were as follows: As of October 31, 2023 2022 2021 In millions Balance at beginning of period $ 325 $ 228 $ 154 Adjustment for adoption of the new credit loss standard — — 28 Provision for credit losses (1) 58 177 61 Adjustment to the existing allowance — (10) 19 Write-offs (140) (70) (34) Balance at end of period $ 243 $ 325 $ 228 (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 October 31, 2023 2022 In millions Billed: (1) Current 1-30 days $ 320 $ 372 Past due 31-60 days 30 32 Past due 61-90 days 13 19 Past due > 90 days 100 121 Unbilled sales-type and direct-financing lease receivables 8,351 7,815 Total gross financing receivables $ 8,814 $ 8,359 Gross financing receivables on non-accrual status (2) $ 227 $ 290 Gross financing receivables 90 days past due and still accruing interest (2) $ 81 $ 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. |
Operating Lease Assets Included in Machinery and Equipment | Operating lease assets included in Property, plant and equipment, net in the Consolidated Balance Sheets were as follows: As of October 31, 2023 2022 In millions Equipment leased to customers $ 7,019 $ 6,879 Accumulated depreciation (2,919) (2,776) Total $ 4,100 $ 4,103 |
Lessor Operating Lease Payments Maturity | As of October 31, 2023, minimum future rentals on non-cancelable operating leases related to leased equipment were as follows: As of October 31, 2023 Fiscal year In millions 2024 $ 1,820 2025 1,174 2026 451 2027 59 2028 4 Thereafter — Total $ 3,508 |
Lessor Lease Activity | The following table presents amounts included in the Consolidated Statements of Earnings related to lessor activity: For the fiscal years ended October 31, Location 2023 2022 2021 In millions Interest income from sales-type leases and direct financing leases Financing income $ 547 $ 483 $ 494 Lease income from operating leases Services 2,407 2,296 2,383 Total lease income $ 2,954 $ 2,779 $ 2,877 |
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 October 31, 2023 2022 Assets held by VIE: In millions Other current assets $ 145 $ 203 Financing receivables Short-term $ 764 $ 838 Long-term $ 983 $ 1,085 Property, plant and equipment, net $ 1,214 $ 1,323 Liabilities held by VIE: Notes payable and short-term borrowings, net of unamortized debt issuance costs $ 1,392 $ 1,510 Long-term debt, net of unamortized debt issuance costs $ 1,082 $ 1,415 A summary of H3C’s statements of operations for the twelve-month periods ended September 30, 2023, 2022 and 2021 and balance sheets as of September 30, 2023 and 2022 are as follows: For the twelve months ended September 30, 2023 2022 2021 Statement of Operations: In millions Revenue $ 7,161 $ 7,633 $ 6,377 Gross profit 1,790 2,014 1,676 Net income $ 498 $ 561 $ 530 As of September 30, 2023 2022 Balance Sheets: In millions Current assets $ 5,073 $ 4,341 Non-current assets 677 631 Current liabilities 4,052 3,299 Non-current liabilities $ 489 $ 203 |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Oct. 31, 2023 | |
Business Combinations [Abstract] | |
Aggregate purchase price allocation, including preliminary allocations | The following table presents the aggregate estimated fair value of the assets acquired and liabilities assumed, including those items that are still pending allocations, for the acquisitions completed during fiscal 2023: In millions Goodwill $ 585 Amortizable intangible assets 209 Net tangible assets assumed 46 Total fair value consideration $ 840 In millions Goodwill $ 302 Amortizable intangible assets 277 Net tangible liabilities assumed (11) Total fair value consideration $ 568 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Oct. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of allocation and changes in the carrying amount of goodwill | Goodwill and related changes in the carrying amount by reportable segment were as follows: Compute HPC & AI Storage Intelligent Edge Financial Corporate Investments & Other Total In millions Balance at October 31, 2022 (1)(2) $ 7,692 $ 2,889 $ 4,000 $ 2,555 $ 144 $ 123 $ 17,403 Goodwill from acquisitions — 15 — 311 — 259 585 Balance at October 31, 2023 (1) $ 7,692 $ 2,904 $ 4,000 $ 2,866 $ 144 $ 382 $ 17,988 (1) Goodwill is net of accumulated impairment losses of $1.9 billion. Of this amount, $1.7 billion relates to HPC & AI of which $815 million was recorded during the fourth quarter of fiscal 2022. The Software reporting unit within Corporate Investments and Other, has an accumulated impairment loss of $90 million which was also recorded during the fourth quarter of fiscal 2022. (2) 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. |
Intangible Assets | Intangible assets from acquisitions comprise: As of October 31, 2023 As of October 31, 2022 Gross Accumulated Net Gross Accumulated Net In millions Customer contracts, customer lists and distribution agreements $ 357 $ (177) $ 180 $ 475 $ (256) $ 219 Developed and core technology and patents 1,162 (711) 451 1,163 (695) 468 Trade name and trademarks 146 (123) 23 144 (98) 46 Total intangible assets $ 1,665 $ (1,011) $ 654 $ 1,782 $ (1,049) $ 733 |
Schedule of intangible assets | As of October 31, 2023, the weighted-average remaining useful lives of the Company's finite-lived intangible assets were as follows: Weighted-Average In years Customer contracts, customer lists and distribution agreements 5 Developed and core technology and patents 4 Trade name and trademarks 1 |
Schedule of estimated future amortization expense related to finite-lived purchased intangible assets | As of October 31, 2023, estimated future amortization expense related to finite-lived intangible assets was as follows: Fiscal year In millions 2024 $ 250 2025 137 2026 120 2027 86 2028 40 Thereafter 21 Total $ 654 |
Fair Value (Tables)
Fair Value (Tables) | 12 Months Ended |
Oct. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
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 October 31, 2023 As of October 31, 2022 Fair Value Fair Value Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total In millions Assets Cash equivalents and investments: Time deposits $ — $ 905 $ — $ 905 $ — $ 1,516 $ — $ 1,516 Money market funds 1,672 — — 1,672 744 — — 744 Equity investments — — 135 135 — — 126 126 Foreign bonds 1 95 1 97 — 91 — 91 Other debt securities (1) — — 22 22 — — 33 33 Derivative instruments: Foreign exchange contracts — 464 — 464 — 840 — 840 Other derivatives — — — — — 2 — 2 Total assets $ 1,673 $ 1,464 $ 158 $ 3,295 $ 744 $ 2,449 $ 159 $ 3,352 Liabilities Derivative instruments: Interest rate contracts $ — $ 151 $ — $ 151 $ — $ 178 $ — $ 178 Foreign exchange contracts — 152 — 152 — 128 — 128 Other derivatives — 2 — 2 — 1 — 1 Total liabilities $ — $ 305 $ — $ 305 $ — $ 307 $ — $ 307 (1) Available-for-sale debt securities with carrying values that approximate fair value. |
Financial Instruments (Tables)
Financial Instruments (Tables) | 12 Months Ended |
Oct. 31, 2023 | |
Investments, All Other Investments [Abstract] | |
Cash Equivalents and Available-for-Sale Investments | Cash equivalents and available-for-sale investments were as follows: As of October 31, 2023 As of October 31, 2022 Cost Gross Fair Cost Gross Fair In millions Cash Equivalents: Time deposits $ 905 $ — $ 905 $ 1,516 $ — $ 1,516 Money market funds 1,672 — 1,672 744 — 744 Total cash equivalents 2,577 — 2,577 2,260 — 2,260 Available-for-Sale Investments: Foreign bonds 100 (3) 97 93 (2) 91 Other debt securities 19 3 22 32 1 33 Total available-for-sale investments 119 — 119 125 (1) 124 Total cash equivalents and available-for-sale investments $ 2,696 $ — $ 2,696 $ 2,385 $ (1) $ 2,384 |
Contractual Maturities of Investments in Available-for-Sale Debt Securities | Contractual maturities of investments in available-for-sale debt securities were as follows: As of October 31, 2023 Amortized Cost Fair Value In millions Due in one year $ 3 $ 3 Due in one to five years 5 5 Due in more than five years 111 111 $ 119 $ 119 |
Gross Notional and Fair Value of Derivative Instruments in the Combined and Consolidated Balance Sheets | The gross notional and fair value of derivative instruments in the Consolidated Balance Sheets was as follows: As of October 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 $ — $ — $ — $ 151 $ 2,500 $ — $ — $ — $ 178 Cash flow hedges: Foreign currency contracts 8,247 252 104 33 23 7,662 420 246 25 13 Net investment hedges: Foreign currency contracts 1,972 39 46 34 23 1,883 60 74 12 13 Total derivatives designated as hedging instruments 12,719 291 150 67 197 12,045 480 320 37 204 Derivatives not designated as hedging instruments Foreign currency contracts 6,786 20 3 23 16 7,780 36 4 53 12 Other derivatives 100 — — 2 — 95 2 — 1 — Total derivatives not designated as hedging instruments 6,886 20 3 25 16 7,875 38 4 54 12 Total derivatives $ 19,605 $ 311 $ 153 $ 92 $ 213 $ 19,920 $ 518 $ 324 $ 91 $ 216 |
Offsetting Assets | As of October 31, 2023 and 2022, information related to the potential effect of the Company's use of the master netting agreements and collateral security agreements was as follows: As of October 31, 2023 In the Consolidated Balance Sheets (i) (ii) (iii) = (i)–(ii) (iv) (v) (vi) = (iii)–(iv)–(v) Gross Amounts Gross Gross Net Amount Derivatives Financial Net Amount In millions Derivative assets $ 464 $ — $ 464 $ 196 $ 207 (1) $ 61 Derivative liabilities $ 305 $ — $ 305 $ 196 $ 103 (2) $ 6 As of October 31, 2022 In the Consolidated Balance Sheets (i) (ii) (iii) = (i)–(ii) (iv) (v) (vi) = (iii)–(iv)–(v) Gross Amounts 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) N/A (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) |
Offsetting Liabilities | As of October 31, 2023 and 2022, information related to the potential effect of the Company's use of the master netting agreements and collateral security agreements was as follows: As of October 31, 2023 In the Consolidated Balance Sheets (i) (ii) (iii) = (i)–(ii) (iv) (v) (vi) = (iii)–(iv)–(v) Gross Amounts Gross Gross Net Amount Derivatives Financial Net Amount In millions Derivative assets $ 464 $ — $ 464 $ 196 $ 207 (1) $ 61 Derivative liabilities $ 305 $ — $ 305 $ 196 $ 103 (2) $ 6 As of October 31, 2022 In the Consolidated Balance Sheets (i) (ii) (iii) = (i)–(ii) (iv) (v) (vi) = (iii)–(iv)–(v) Gross Amounts 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) N/A (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) |
Pre-Tax Effect of Derivative Instruments and Related Hedged Items in a Fair Value Hedging Relationship | The amounts recorded in the Consolidated Balance Sheets related to cumulative basis adjustments for fair value hedges were as follows: Carrying amount of the hedged assets/ (liabilities) Cumulative amount of fair value hedging adjustment included in the carrying amount of the hedged assets/ (liabilities) As of October 31, As of October 31, 2023 2022 2023 2022 In millions In millions Long-term debt $ (2,345) $ (2,317) $ 151 $ 178 |
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 fiscal years ended October 31, 2023 2022 2021 In millions Derivatives in Cash Flow Hedging Relationship Foreign exchange contracts $ (177) $ 1,025 $ (50) Derivatives in Net Investment Hedging Relationship Foreign exchange contracts (76) 99 (33) Total $ (253) $ 1,124 $ (83) |
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 fiscal years ended October 31, 2023 2022 2021 In millions Derivatives in Cash Flow Hedging Relationship Foreign exchange contracts $ (177) $ 1,025 $ (50) Derivatives in Net Investment Hedging Relationship Foreign exchange contracts (76) 99 (33) Total $ (253) $ 1,124 $ (83) |
Effect of Derivative Instruments on the Statement of Earnings | The following table represents pre-tax effect of derivative instruments on total amounts of income and expense line items presented in the Consolidated Statements of Earnings in which the effects of fair value hedges, cash flow hedges and derivatives not designated as hedging instruments are recorded: Gains (Losses) Recognized in Income For the fiscal years ended October 31, 2023 2022 2021 Net revenue Interest and other, net Net revenue Interest and other, net Net revenue Interest and other, net In millions Total net revenue and interest and other, net $ 29,135 $ (156) $ 28,496 $ (188) $ 27,784 $ (211) Gains (losses) on derivatives in fair value hedging relationships Interest rate contracts Hedged items — (27) — 273 — 125 Derivatives designated as hedging instruments — 27 — (273) — (125) Gains (losses) on derivatives in cash flow hedging relationships Foreign exchange contracts Amount of gains (losses) reclassified from accumulated other comprehensive income into income 28 (144) 388 590 (81) (73) Interest rate contracts Amount of gains (losses) reclassified from accumulated other comprehensive income into income — — — — — (2) Gains (losses) on derivatives not designated as hedging instruments Foreign exchange contracts — (97) — 287 — (68) Other derivatives — (8) — (3) — 6 Total gains (losses) $ 28 $ (249) $ 388 $ 874 $ (81) $ (137) |
Borrowings (Tables)
Borrowings (Tables) | 12 Months Ended |
Oct. 31, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of notes payable and short-term borrowings, including the current portion of long-term debt | Notes payable and short-term borrowings, including the current portion of long-term debt, were as follows: As of October 31, 2023 2022 Amount Weighted-Average Amount Weighted-Average Dollars in millions Current portion of long-term debt (1) $ 4,022 4.8 % $ 3,876 3.6 % Commercial paper 679 4.1 % 542 0.6 % Notes payable to banks, lines of credit and other 167 4.6 % 194 2.7 % Total notes payable and short-term borrowings $ 4,868 $ 4,612 (1) As of October 31, 2023, the Current portion of long-term debt, net of discount and issuance costs, included $1.4 billion associated with the current portion of the Company issued asset-backed debt securities. |
Schedule of long-term debt | Long-Term Debt As of October 31, 2023 2022 In millions Hewlett Packard Enterprise Unsecured Senior Notes $250 issued at premium to par at a price of 100.452% in June 2023 at 5.90%, due October 1, 2024, interest payable semi-annually on April 1 and October 1 of each year $ 251 $ — $550 issued at discount to par at a price of 99.887% in June 2023 at 5.25%, due July 1, 2028, interest payable semi-annually on January 1 and July 1 of each year 549 — $400 issued at discount to par at a price of 99.997% in March 2023 at 6.102%, due April 1, 2026, interest payable semi-annually on April 1 and October 1 of each year 400 — $1,300 issued at discount to par at a price of 99.934% in March 2023 at 5.90%, due October 1, 2024, interest payable semi-annually on April 1 and October 1 of each year 1,299 — $1,000 issued at discount to par at a price of 99.883% in July 2020 at 1.45%, due April 1, 2024, interest payable semi-annually on April 1 and October 1 of each year 1,000 1,000 $750 issued at discount to par at a price of 99.820% in July 2020 at 1.75%, due April 1, 2026, interest payable semi-annually on April 1 and October 1 of each year 749 749 $1,250 issued at discount to par at a price of 99.956% in April 2020 at 4.45%, due October 2, 2023, interest payable semi-annually on April 2 and October 2 of each year — 1,250 $1,000 issued at discount to par at a price of 99.979% in September 2019 at 2.25%, due April 1, 2023, interest payable semi-annually on April 1 and October 1 of each year — 1,000 $2,500 issued at discount to par at a price of 99.725% in October 2015 at 4.90%, due October 15, 2025, interest payable semi-annually on April 15 and October 15 of each year 2,499 2,497 $750 issued at discount to par at a price of 99.942% in October 2015 at 6.20%, due October 15, 2035, interest payable semi-annually on April 15 and October 15 of each year 750 750 $1,500 issued at discount to par at a price of 99.932% in October 2015 at 6.35%, due October 15, 2045, interest payable semi-annually on April 15 and October 15 of each year 1,499 1,499 Hewlett Packard Enterprise Asset-Backed Debt Securities $612 issued in September 2023, in six tranches at a weighted average price of 99.99% and a weighted average interest rate of 6.40%, payable monthly from October 2023 with a stated final maturity of July 2031 596 — $643 issued in March 2023 and April 2023, in five tranches at a weighted average price of 99.99% and a weighted average interest rate of 5.59%, payable monthly from April 2023 with a stated final maturity of April 2028 483 — $651 issued in October 2022, in five tranches at a weighted average price of 99.99% and a weighted average interest rate of 5.55%, payable monthly from November 2022 with a stated final maturity date of August 2029 393 651 $747 issued in May 2022, in six tranches at a weighted average price of 99.99% and a weighted average interest rate of 3.68%, payable monthly from July 2022 with a stated final maturity date of March 2030 367 614 $1,000 issued in January 2022, in six tranches at a weighted average price of 99.99% and a weighted average interest rate of 1.51%, payable monthly from March 2022 with a stated final maturity date of November 2029 391 712 $753 issued in June 2021, in six tranches at a weighted average price of 99.99% and a weighted average interest rate of 0.58%, payable monthly from August 2021 with a stated final maturity date of March 2029 147 362 $1,000 issued in March 2021, in six tranches at a weighted average price of 99.99% and a weighted average interest rate of 0.49%, payable monthly from April 2021 with a stated final maturity date of March 2031 102 354 $1,000 issued in June 2020, in six tranches at a weighted average price of 99.99% and a weighted average interest rate of 1.19%, payable monthly from August 2020 with a stated final maturity date of July 2030 — 151 $755 issued in February 2020 of in six tranches at a weighted average price of 99.99% and a weighted average interest rate of 1.87%, payable monthly from April 2020 with a stated final maturity date of February 2030 — 88 Other, including finance lease obligations, at 1.1%-6.3%, due in calendar years 2023-2030 (1) 215 261 Fair value adjustment related to hedged debt (151) (178) Unamortized debt issuance costs (30) (31) Less: current portion (4,022) (3,876) Total long-term debt $ 7,487 $ 7,853 (1) Other, including finance lease obligations included $36 million and $86 million as of October 31, 2023 and 2022, respectively, of borrowing- and funding-related activity associated with FS and its subsidiaries that are collateralized by receivables and underlying assets associated with the related finance and operating leases. For both the periods presented, the carrying amount of the assets approximated the carrying amount of the borrowings. |
Schedule of interest expense on borrowings recognized in the Combined and Consolidated Statements of Earnings | Interest expense on borrowings recognized in the Consolidated Statements of Earnings was as follows: For the fiscal years ended October 31, Location 2023 2022 2021 In millions Financing interest Financing cost $ 383 $ 211 $ 212 Interest expense Interest and other, net 326 260 289 Total interest expense $ 709 $ 471 $ 501 |
Schedule of aggregate future maturities of long-term debt at face value | As of October 31, 2023, aggregate future maturities of the Company's borrowings at face value (excluding a fair value adjustment related to hedged debt of $151 million, a net discount of $4 million and unamortized debt issuance costs of $30 million), including finance lease obligations were as follows: Fiscal year In millions 2024 $ 4,030 2025 3,486 2026 1,351 2027 9 2028 557 Thereafter 2,261 Total $ 11,694 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Oct. 31, 2023 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Accumulated Other Comprehensive loss, net of taxes | The components of accumulated other comprehensive loss, net of taxes as of October 31, 2023 and changes during fiscal 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 1 (177) (99) (32) (307) Reclassifications of losses into earnings — 116 147 — 263 Tax benefit — 13 41 4 58 Balance at end of period $ — $ 61 $ (2,507) $ (638) $ (3,084) The components of accumulated other comprehensive loss, net of taxes as of October 31, 2022 and changes during fiscal 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 (16) 1025 (315) (146) 548 Reclassifications of (gains) losses into earnings — (978) 160 — (818) Tax (provision) benefit — (19) 104 2 87 Balance at end of period $ (1) $ 109 $ (2,596) $ (610) $ (3,098) The components of accumulated other comprehensive loss, net of taxes as of October 31, 2021 and changes during fiscal 2021 were as follows: Net unrealized Net unrealized Unrealized Cumulative Accumulated In millions Balance at beginning of period $ 18 $ (7) $ (3,473) $ (477) $ (3,939) Other comprehensive (loss) income before reclassifications (3) (50) 763 16 726 Reclassifications of losses into earnings — 156 285 — 441 Tax provision — (18) (120) (5) (143) Balance at end of period $ 15 $ 81 $ (2,545) $ (466) $ (2,915) |
Net Earnings (Loss) Per Share (
Net Earnings (Loss) Per Share (Tables) | 12 Months Ended |
Oct. 31, 2023 | |
Earnings Per Share [Abstract] | |
Basic and diluted net Earnings Per Share calculations | The reconciliations of the numerators and denominators of each of the basic and diluted net EPS calculations were as follows: For the fiscal years ended October 31, 2023 2022 2021 In millions, except per share amounts Numerator: Net earnings $ 2,025 $ 868 $ 3,427 Denominator: Weighted-average shares used to compute basic net EPS 1,299 1,303 1,309 Dilutive effect of employee stock plans 17 19 21 Weighted-average shares used to compute diluted net EPS 1,316 1,322 1,330 Net earnings per share: Basic $ 1.56 $ 0.67 $ 2.62 Diluted $ 1.54 $ 0.66 $ 2.58 Anti-dilutive weighted-average stock awards (1) — 2 6 (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. |
Guarantees, Indemnifications _2
Guarantees, Indemnifications and Warranties (Tables) | 12 Months Ended |
Oct. 31, 2023 | |
Guarantees [Abstract] | |
Schedule of indemnified litigation matters and other contingencies | As of October 31, 2023 and 2022, the Company's receivable and payable balances related to indemnified litigation matters and other contingencies, and income tax-related indemnification covered by these agreements were as follows: As of October 31, 2023 2022 In millions Litigation Matters and Other Contingencies Receivable $ 42 $ 47 Payable 48 50 Income Tax-Related Indemnification (1) Net indemnification receivable - long-term 31 7 Net indemnification receivable - short-term $ 11 $ 11 (1) The actual amount that the Company may receive or pay could vary depending upon the outcome of certain unresolved tax matters, which may not be resolved for several years. |
Changes in aggregate product warranty liabilities and changes | The Company's aggregate product warranty liabilities and changes therein were as follows: For the fiscal years ended October 31, 2023 2022 In millions Balance at beginning of year $ 360 $ 327 Charges 184 238 Adjustments related to pre-existing warranties (18) (2) Settlements made (208) (203) Balance at end of year (1) $ 318 $ 360 (1) The Company included the current portion in Other accrued liabilities, and amounts due after one year in Other non-current liabilities in the accompanying Consolidated Balance Sheets. |
Equity Method Investments (Tabl
Equity Method Investments (Tables) | 12 Months Ended |
Oct. 31, 2023 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity Method Investments | The difference between the sale date carrying value of the Company's investment in H3C and its proportionate share of the net assets fair value of H3C, created a basis difference of $2.5 billion, which was allocated as follows: In millions Equity method goodwill $ 1,674 Intangible assets 749 In-process research and development 188 Deferred tax liabilities (152) Other 75 Basis difference $ 2,534 The Company recorded earnings from equity interests of $245 million, $215 million and $180 million in fiscal 2023, 2022 and 2021, respectively, in the Consolidated Statements of Earnings, the components of which are as follows: For the fiscal years ended October 31, 2023 2022 2021 In millions Earnings from equity interests, net of taxes (1) $ 242 $ 270 $ 292 Basis difference amortization (9) (45) (109) Adjustment of profit on intra-entity sales 12 (10) (3) Earnings from equity interests $ 245 $ 215 $ 180 |
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 October 31, 2023 2022 Assets held by VIE: In millions Other current assets $ 145 $ 203 Financing receivables Short-term $ 764 $ 838 Long-term $ 983 $ 1,085 Property, plant and equipment, net $ 1,214 $ 1,323 Liabilities held by VIE: Notes payable and short-term borrowings, net of unamortized debt issuance costs $ 1,392 $ 1,510 Long-term debt, net of unamortized debt issuance costs $ 1,082 $ 1,415 A summary of H3C’s statements of operations for the twelve-month periods ended September 30, 2023, 2022 and 2021 and balance sheets as of September 30, 2023 and 2022 are as follows: For the twelve months ended September 30, 2023 2022 2021 Statement of Operations: In millions Revenue $ 7,161 $ 7,633 $ 6,377 Gross profit 1,790 2,014 1,676 Net income $ 498 $ 561 $ 530 As of September 30, 2023 2022 Balance Sheets: In millions Current assets $ 5,073 $ 4,341 Non-current assets 677 631 Current liabilities 4,052 3,299 Non-current liabilities $ 489 $ 203 |
Overview and Summary of Signi_3
Overview and Summary of Significant Accounting Policies - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2023 | Oct. 31, 2022 | Oct. 31, 2021 | |
Segment Reporting Information | |||
Costs and expenses | $ 27,046 | $ 27,714 | $ 26,652 |
Financing cost | 383 | 211 | 212 |
(Gain) loss on recoveries and catastrophes | (1) | (48) | (16) |
Advertising expense | $ 173 | 179 | $ 188 |
Average warranty expense as a percent of annual product revenue | 1.10% | ||
Conflict Between Russian and Ukraine and Related Trade Sanctions | |||
Segment Reporting Information | |||
Costs and expenses | 161 | ||
Financing cost | 99 | ||
Cost of products and services | 12 | ||
(Gain) loss on recoveries and catastrophes | $ 50 | ||
Minimum | |||
Segment Reporting Information | |||
Amortization period | 2 years | ||
Estimated useful life for finite-lived intangible assets | 1 year | ||
Standard warranty term | 1 year | ||
Minimum | Buildings and improvements | |||
Segment Reporting Information | |||
Estimated useful life for property, plant and equipment | 5 years | ||
Minimum | Machinery and equipment, including equipment held for lease | |||
Segment Reporting Information | |||
Estimated useful life for property, plant and equipment | 3 years | ||
Minimum | Capitalized internal use software | |||
Segment Reporting Information | |||
Estimated useful life for property, plant and equipment | 3 years | ||
Maximum | |||
Segment Reporting Information | |||
Amortization period | 5 years | ||
Estimated useful life for finite-lived intangible assets | 10 years | ||
Standard warranty term | 5 years | ||
Maximum | Buildings and improvements | |||
Segment Reporting Information | |||
Estimated useful life for property, plant and equipment | 40 years | ||
Maximum | Machinery and equipment, including equipment held for lease | |||
Segment Reporting Information | |||
Estimated useful life for property, plant and equipment | 15 years | ||
Maximum | Capitalized internal use software | |||
Segment Reporting Information | |||
Estimated useful life for property, plant and equipment | 5 years |
Overview and Summary of Signi_4
Overview and Summary of Significant Accounting Policies - Impact of Weighted Average Assumptions on Net Periodic Benefit (Costs) (Details) $ in Millions | 12 Months Ended |
Oct. 31, 2023 USD ($) | |
Change in basis points | |
Discount rate | (0.0025) |
Expected increase in compensation levels | 0.0025 |
Expected long-term return on plan assets | (0.0025) |
Change in Net Periodic Benefit Cost | |
Discount rate | $ 17 |
Expected increase in compensation levels | 3 |
Expected long-term return on plan assets | $ 25 |
Segment Information - Narrative
Segment Information - Narrative (Detail) | 12 Months Ended |
Oct. 31, 2023 segment | |
Segment Reporting Information | |
Number of reportable segments | 6 |
Major Customers | Net Revenue | Customer One | |
Segment Reporting Information | |
Concentration of credit risk (as a percent) | 11% |
Segment Information - Segment O
Segment Information - Segment Operating Results from Continuing Operations (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2023 | Oct. 31, 2022 | Oct. 31, 2021 | |
Segment Reporting Information | |||
Net revenue | $ 29,135 | $ 28,496 | $ 27,784 |
Segment earnings (loss) from operations | 2,089 | 782 | 1,132 |
Intersegment net revenue | |||
Segment Reporting Information | |||
Net revenue | (563) | (417) | (503) |
Operating segments | |||
Segment Reporting Information | |||
Net revenue | 29,698 | 28,913 | 28,287 |
Segment earnings (loss) from operations | 3,609 | 3,329 | 3,133 |
Compute | |||
Segment Reporting Information | |||
Net revenue | 11,129 | 12,627 | 12,158 |
Compute | Intersegment net revenue | |||
Segment Reporting Information | |||
Net revenue | (307) | (223) | (251) |
Compute | Operating segments | |||
Segment Reporting Information | |||
Net revenue | 11,436 | 12,850 | 12,409 |
Segment earnings (loss) from operations | 1,569 | 1,821 | 1,382 |
HPC & AI | |||
Segment Reporting Information | |||
Net revenue | 3,775 | 3,078 | 3,037 |
HPC & AI | Intersegment net revenue | |||
Segment Reporting Information | |||
Net revenue | (138) | (114) | (147) |
HPC & AI | Operating segments | |||
Segment Reporting Information | |||
Net revenue | 3,913 | 3,192 | 3,184 |
Segment earnings (loss) from operations | 47 | 11 | 231 |
Storage | |||
Segment Reporting Information | |||
Net revenue | 4,329 | 4,546 | 4,553 |
Storage | Intersegment net revenue | |||
Segment Reporting Information | |||
Net revenue | (86) | (57) | (82) |
Storage | Operating segments | |||
Segment Reporting Information | |||
Net revenue | 4,415 | 4,603 | 4,635 |
Segment earnings (loss) from operations | 429 | 641 | 716 |
Intelligent Edge | |||
Segment Reporting Information | |||
Net revenue | 5,186 | 3,665 | 3,292 |
Intelligent Edge | Intersegment net revenue | |||
Segment Reporting Information | |||
Net revenue | (18) | (9) | (10) |
Intelligent Edge | Operating segments | |||
Segment Reporting Information | |||
Net revenue | 5,204 | 3,674 | 3,302 |
Segment earnings (loss) from operations | 1,419 | 549 | 509 |
Financial Services | |||
Segment Reporting Information | |||
Net revenue | 3,466 | 3,326 | 3,388 |
Financial Services | Intersegment net revenue | |||
Segment Reporting Information | |||
Net revenue | (14) | (13) | (13) |
Financial Services | Operating segments | |||
Segment Reporting Information | |||
Net revenue | 3,480 | 3,339 | 3,401 |
Segment earnings (loss) from operations | 317 | 399 | 390 |
Corporate Investments and Other | |||
Segment Reporting Information | |||
Net revenue | 1,250 | 1,254 | 1,356 |
Corporate Investments and Other | Intersegment net revenue | |||
Segment Reporting Information | |||
Net revenue | 0 | (1) | 0 |
Corporate Investments and Other | Operating segments | |||
Segment Reporting Information | |||
Net revenue | 1,250 | 1,255 | 1,356 |
Segment earnings (loss) from operations | $ (172) | $ (92) | $ (95) |
Segment Information - Reconcili
Segment Information - Reconciliation of Segment Operating Results (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2023 | Oct. 31, 2022 | Oct. 31, 2021 | |
Net Revenue: | |||
Net revenue | $ 29,135 | $ 28,496 | $ 27,784 |
(Loss) earnings before taxes: | |||
Total segment earnings from operations | 2,089 | 782 | 1,132 |
Stock-based compensation expense | (428) | (391) | (382) |
Amortization of intangible assets | (288) | (293) | (354) |
Impairment of goodwill | 0 | (905) | 0 |
Transformation costs | (283) | (473) | (930) |
Acquisition, disposition and other related charges | (69) | (19) | (36) |
Tax indemnification and other adjustments | 55 | (67) | 65 |
Non-service net periodic benefit (cost) credit | (3) | 134 | 70 |
Litigation judgment | 0 | 0 | 2,351 |
Earnings from equity interests | 245 | 215 | 180 |
Earnings before provision for taxes | 2,230 | 876 | 3,587 |
Operating segments | |||
Net Revenue: | |||
Net revenue | 29,698 | 28,913 | 28,287 |
(Loss) earnings before taxes: | |||
Total segment earnings from operations | 3,609 | 3,329 | 3,133 |
Elimination of intersegment net revenue | |||
Net Revenue: | |||
Net revenue | (563) | (417) | (503) |
Segment Reconciling Items | |||
(Loss) earnings before taxes: | |||
Unallocated corporate costs and eliminations | (464) | (303) | (285) |
Stock-based compensation expense | (428) | (391) | (372) |
Amortization of initial direct costs | 0 | (4) | (8) |
Amortization of intangible assets | (288) | (293) | (354) |
Impairment of goodwill | 0 | (905) | 0 |
Transformation costs | (283) | (473) | (930) |
Disaster recovery (charges) | 12 | (159) | (16) |
Acquisition, disposition and other related charges | (69) | (19) | (36) |
Interest and other, net | (156) | (188) | (211) |
Tax indemnification and other adjustments | 55 | (67) | 65 |
Non-service net periodic benefit (cost) credit | (3) | 134 | 70 |
Litigation judgment | 0 | 0 | 2,351 |
Earnings from equity interests | $ 245 | $ 215 | $ 180 |
Segment Information - Reconci_2
Segment Information - Reconciliation of Segment Assets (Details) - USD ($) $ in Millions | Oct. 31, 2023 | Oct. 31, 2022 |
Segment Reporting Information | ||
Assets | $ 57,153 | $ 57,123 |
Operating segments | Compute | ||
Segment Reporting Information | ||
Assets | 16,120 | 16,881 |
Operating segments | HPC & AI | ||
Segment Reporting Information | ||
Assets | 5,787 | 5,997 |
Operating segments | Storage | ||
Segment Reporting Information | ||
Assets | 7,195 | 7,484 |
Operating segments | Intelligent Edge | ||
Segment Reporting Information | ||
Assets | 5,352 | 4,594 |
Operating segments | Financial Services | ||
Segment Reporting Information | ||
Assets | 14,539 | 14,837 |
Operating segments | Corporate Investments and Other | ||
Segment Reporting Information | ||
Assets | 1,401 | 1,110 |
Corporate and unallocated assets | ||
Segment Reporting Information | ||
Assets | $ 6,759 | $ 6,220 |
Segment Information - Revenue b
Segment Information - Revenue by Geographic Region (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Oct. 31, 2023 | Oct. 31, 2022 | Oct. 31, 2021 | ||
Segment Reporting Information | ||||
Net revenue | $ 29,135 | $ 28,496 | $ 27,784 | |
Net property, plant and equipment: | ||||
Property, plant and equipment, net | [1] | 5,989 | 5,784 | |
U.S. | ||||
Segment Reporting Information | ||||
Net revenue | 10,369 | 9,425 | 8,850 | |
Net property, plant and equipment: | ||||
Property, plant and equipment, net | 2,803 | 3,035 | ||
Americas excluding U.S. | ||||
Segment Reporting Information | ||||
Net revenue | 2,208 | 1,964 | 1,825 | |
Total Americas | ||||
Segment Reporting Information | ||||
Net revenue | 12,577 | 11,389 | 10,675 | |
Europe, Middle East and Africa | ||||
Segment Reporting Information | ||||
Net revenue | 10,151 | 10,292 | 10,329 | |
Asia Pacific and Japan | ||||
Segment Reporting Information | ||||
Net revenue | 6,407 | 6,815 | $ 6,780 | |
Other countries | ||||
Net property, plant and equipment: | ||||
Property, plant and equipment, net | $ 3,186 | $ 2,749 | ||
[1]This balance includes $606 million and $534 million of internal use software, net as of October 31, 2023 and 2022, respectively. |
Transformation Programs - Trans
Transformation Programs - Transformation Costs (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2023 | Oct. 31, 2022 | Oct. 31, 2021 | |
Restructuring Cost and Reserve [Line Items] | |||
Total | $ 283 | $ 473 | $ 930 |
Cost Optimization and Prioritization Plan | |||
Restructuring Cost and Reserve [Line Items] | |||
Program management | 9 | 27 | 83 |
IT costs | 26 | 26 | 14 |
Restructuring charges | 226 | 201 | 598 |
Total | 261 | 254 | 695 |
HPE Next Plan | |||
Restructuring Cost and Reserve [Line Items] | |||
Program management | 0 | 7 | 14 |
IT costs | 91 | 184 | 174 |
Restructuring charges | 16 | 13 | 22 |
Gains on real estate sales | (85) | (8) | (3) |
Impairment on real estate assets | 0 | 11 | 4 |
Other | 3 | 13 | 29 |
Total | $ 25 | $ 220 | $ 240 |
Transformation Programs - Sched
Transformation Programs - Schedule of Restructuring Activities (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2023 | Oct. 31, 2022 | Oct. 31, 2021 | |
Cost Optimization and Prioritization Plan | |||
Restructuring Reserve | |||
Charges | $ 226 | $ 201 | $ 598 |
Cost Optimization and Prioritization Plan | Employee Severance | |||
Restructuring Reserve | |||
Balance at the beginning of the period | 185 | ||
Charges | 148 | ||
Cash payments | (189) | ||
Non-cash items | 8 | ||
Balance at the end of the period | 152 | 185 | |
Restructuring and Related Cost, Cost Incurred to Date | 793 | ||
Restructuring and Related Cost, Expected Cost Remaining | 820 | ||
Cost Optimization and Prioritization Plan | Infrastructure and other | |||
Restructuring Reserve | |||
Balance at the beginning of the period | 122 | ||
Charges | 78 | ||
Cash payments | (64) | ||
Non-cash items | (9) | ||
Balance at the end of the period | 127 | 122 | |
Restructuring and Related Cost, Cost Incurred to Date | 561 | ||
Restructuring and Related Cost, Expected Cost Remaining | 575 | ||
HPE Next Plan | |||
Restructuring Reserve | |||
Charges | 16 | 13 | $ 22 |
HPE Next Plan | Employee Severance | |||
Restructuring Reserve | |||
Balance at the beginning of the period | 11 | ||
Charges | 6 | ||
Cash payments | (11) | ||
Non-cash items | 0 | ||
Balance at the end of the period | 6 | 11 | |
Restructuring and Related Cost, Cost Incurred to Date | 1,267 | ||
Restructuring and Related Cost, Expected Cost Remaining | 1,267 | ||
HPE Next Plan | Infrastructure and other | |||
Restructuring Reserve | |||
Balance at the beginning of the period | 25 | ||
Charges | 10 | ||
Cash payments | (9) | ||
Non-cash items | 1 | ||
Balance at the end of the period | 27 | $ 25 | |
Restructuring and Related Cost, Cost Incurred to Date | 270 | ||
Restructuring and Related Cost, Expected Cost Remaining | $ 275 |
Transformation Programs - Narra
Transformation Programs - Narrative (Details) - USD ($) $ in Millions | Oct. 31, 2023 | Oct. 31, 2022 |
Restructuring Cost and Reserve [Line Items] | ||
Accrued restructuring | $ 180 | $ 192 |
HPE Next and Cost Optimization and Prioritization Plan | ||
Restructuring Cost and Reserve [Line Items] | ||
Accrued restructuring | 180 | 191 |
Long-term portion of restructuring reserve, recorded in Other liabilities | 110 | 124 |
HPE Next and Cost Optimization and Prioritization Plan | Other accrued liabilities | ||
Restructuring Cost and Reserve [Line Items] | ||
Accrued restructuring | $ 22 | $ 28 |
Retirement and Post-Retiremen_3
Retirement and Post-Retirement Benefit Plans - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2023 | Oct. 31, 2022 | Oct. 31, 2021 | |
Defined Contribution Plan Disclosure [Line Items] | |||
Total defined contribution expense | $ 206 | $ 196 | $ 170 |
Defined Contribution Plan, Tax Status [Extensible Enumeration] | U.S. non-qualified plan participants | ||
U.S. | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Expected contribution to defined benefit plans in fiscal 2023 | $ 3 | ||
Defined Benefit Plans | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Benefit Obligation | 9,362 | 9,517 | 14,872 |
Fair value of plan assets | 9,879 | 9,915 | 15,354 |
Employer contributions | 179 | 160 | |
Defined Benefit Plans | Non-U.S. Plans | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 9,879 | 9,915 | |
Target Allocation | 100% | ||
Employer contributions | $ 179 | ||
Expected contribution to defined benefit plans in fiscal 2023 | 182 | ||
Defined Benefit Plans | Non-U.S. Plans | Level 1 | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Fair value of plan assets | 912 | 946 | |
Defined Benefit Plans | Non-U.S. Plans | Level 2 | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Fair value of plan assets | 5,591 | 5,596 | |
Post-Retirement Benefit Plans | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Benefit Obligation | 148 | 138 | 161 |
Fair value of plan assets | 68 | 60 | $ 60 |
Employer contributions | 6 | 6 | |
Expected contribution to defined benefit plans in fiscal 2023 | 8 | ||
Registered Investment Companies | Post-Retirement Benefit Plans | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Fair value of plan assets | 68 | 60 | |
Registered Investment Companies | Post-Retirement Benefit Plans | Level 1 | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Fair value of plan assets | 55 | 48 | |
Registered Investment Companies | Post-Retirement Benefit Plans | Level 2 | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Fair value of plan assets | 13 | 12 | |
Cash and Cash Equivalents | Defined Benefit Plans | Non-U.S. Plans | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 315 | 652 | |
Target Allocation | 1.90% | ||
Cash and Cash Equivalents | Defined Benefit Plans | Non-U.S. Plans | Level 1 | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 222 | 173 | |
Cash and Cash Equivalents | Defined Benefit Plans | Non-U.S. Plans | Level 2 | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 93 | $ 479 | |
Cash and Cash Equivalents | Post-Retirement Benefit Plans | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Target Allocation | 81% | ||
Multi-Asset Credit Investments | Post-Retirement Benefit Plans | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Target Allocation | 19% | ||
Derivative | Defined Benefit Plans | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Defined benefit plan, plan assets, equity exposure | $ 272 | ||
HPE 401(k) Plan | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Percent of equal 401(k) match to employees effective during the period | 100% | ||
Percentage of maximum matching contribution | 4% |
Retirement and Post-Retiremen_4
Retirement and Post-Retirement Benefit Plans - Summary of Net Benefit Cost (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Oct. 31, 2023 | Oct. 31, 2022 | Oct. 31, 2021 | ||
Defined Benefit Plans | ||||
Net benefit (credit) cost | ||||
Service cost | $ 53 | $ 78 | $ 97 | |
Interest cost | [1] | 386 | 154 | 118 |
Expected return on plan assets | [1] | (539) | (450) | (479) |
Amortization and deferrals: | ||||
Actuarial loss (gain) | [1] | 160 | 167 | 296 |
Prior service benefit | [1] | (10) | (10) | (13) |
Net periodic benefit cost (credit) | [1] | 50 | (61) | 19 |
Settlement loss and special termination benefits | [1] | 6 | 5 | 7 |
Total net benefit cost (credit) | 56 | (56) | 26 | |
Post-Retirement Benefit Plans | ||||
Net benefit (credit) cost | ||||
Service cost | 1 | 1 | 1 | |
Interest cost | [1] | 8 | 4 | 4 |
Expected return on plan assets | [1] | (2) | (2) | (1) |
Amortization and deferrals: | ||||
Actuarial loss (gain) | [1] | (6) | (2) | (2) |
Prior service benefit | [1] | 0 | 0 | 0 |
Net periodic benefit cost (credit) | [1] | 1 | 1 | 2 |
Settlement loss and special termination benefits | [1] | 0 | 0 | 0 |
Total net benefit cost (credit) | $ 1 | $ 1 | $ 2 | |
[1] These non-service components were included in Non-service net periodic benefit (cost) credit in the Consolidated Statements of Earnings. |
Retirement and Post-Retiremen_5
Retirement and Post-Retirement Benefit Plans - Weighted Average Assumptions Used to Calculate the Projected Benefit Obligations (Details) | 12 Months Ended | |||
Oct. 31, 2023 | Oct. 31, 2022 | Oct. 31, 2021 | ||
Defined Benefit Plans | ||||
Defined benefit plans | ||||
Discount rate used to determine benefit obligation | 3.90% | 1.30% | 1% | |
Discount rate used to determine service cost | 4.20% | 1.70% | 1.30% | |
Discount rate used to determine interest cost | 3.90% | 1.10% | 0.80% | |
Expected increase in compensation levels | 3% | 2.60% | 2.50% | |
Expected long-term return on plan assets | 5.10% | 3.20% | 3.30% | |
Interest Crediting Rate | [1] | 2.40% | 2.50% | 2.50% |
Post-Retirement Benefit Plans | ||||
Defined benefit plans | ||||
Discount rate used to determine benefit obligation | 6% | 3% | 2.80% | |
Discount rate used to determine service cost | 5.70% | 2.70% | 2.60% | |
Discount rate used to determine interest cost | 5.90% | 2.60% | 2.30% | |
Expected increase in compensation levels | 0% | 0% | 0% | |
Expected long-term return on plan assets | 4.30% | 3.30% | 2.30% | |
Interest Crediting Rate | [1] | 4.30% | 2.70% | 2.70% |
[1] The average assumed interest credited for HPE's cash balance plans and postretirement plans, as applicable. |
Retirement and Post-Retiremen_6
Retirement and Post-Retirement Benefit Plans - Funded Status of Plans (Details) - USD ($) $ in Millions | 12 Months Ended | ||||
Oct. 31, 2023 | Oct. 31, 2022 | Oct. 31, 2021 | |||
Change in fair value of plan assets: | |||||
Reimbursement of benefit payments | $ 82 | ||||
Defined Benefit Plans | |||||
Change in fair value of plan assets: | |||||
Fair value - beginning of year | 9,915 | $ 15,354 | |||
Transfers | 0 | (6) | |||
Reimbursement of benefit payments | (82) | [1] | 0 | ||
Actual return on plan assets | (315) | (3,176) | |||
Employer contributions | 179 | 160 | |||
Participant contributions | 24 | 28 | |||
Benefits paid | (449) | (429) | |||
Settlement | (29) | (54) | |||
Currency impact | 636 | (1,962) | |||
Fair value—end of year | 9,879 | 9,915 | $ 15,354 | ||
Change in benefit obligation: | |||||
Projected benefit obligation—beginning of year | 9,517 | 14,872 | |||
Addition/deletion of plans | [2] | 1 | 0 | ||
Service cost | 53 | 78 | 97 | ||
Interest cost | [3] | 386 | 154 | 118 | |
Participant contributions | 24 | 28 | |||
Actuarial (gain) loss | (756) | (3,253) | |||
Benefits paid | (449) | (429) | |||
Plan amendments | 0 | (1) | |||
Settlement | (29) | (54) | |||
Special termination benefits | 2 | 1 | |||
Currency impact | 613 | (1,879) | |||
Projected benefit obligation—end of year | 9,362 | 9,517 | 14,872 | ||
Funded (Unfunded) Status of Plan | 517 | 398 | |||
Accumulated benefit obligation | 9,233 | 9,376 | |||
Post-Retirement Benefit Plans | |||||
Change in fair value of plan assets: | |||||
Fair value - beginning of year | 60 | 60 | |||
Transfers | 0 | 0 | |||
Reimbursement of benefit payments | 0 | 0 | |||
Actual return on plan assets | 4 | (3) | |||
Employer contributions | 6 | 6 | |||
Participant contributions | 7 | 6 | |||
Benefits paid | (9) | (9) | |||
Settlement | 0 | 0 | |||
Currency impact | 0 | 0 | |||
Fair value—end of year | 68 | 60 | 60 | ||
Change in benefit obligation: | |||||
Projected benefit obligation—beginning of year | 138 | 161 | |||
Addition/deletion of plans | [2] | 0 | 0 | ||
Service cost | 1 | 1 | 1 | ||
Interest cost | [3] | 8 | 4 | 4 | |
Participant contributions | 7 | 6 | |||
Actuarial (gain) loss | 3 | (24) | |||
Benefits paid | (9) | (9) | |||
Plan amendments | 0 | 0 | |||
Settlement | 0 | 0 | |||
Special termination benefits | 0 | 0 | |||
Currency impact | 0 | (1) | |||
Projected benefit obligation—end of year | 148 | 138 | $ 161 | ||
Funded (Unfunded) Status of Plan | (80) | (78) | |||
Accumulated benefit obligation | $ 0 | $ 0 | |||
[1]For fiscal 2023, the German Contractual Trust Arrangements reimbursed HPE for benefit payments of approximately $82 million.[2]Includes the addition/deletion of plans resulting from acquisitions.[3] These non-service components were included in Non-service net periodic benefit (cost) credit in the Consolidated Statements of Earnings. |
Retirement and Post-Retiremen_7
Retirement and Post-Retirement Benefit Plans - Weighted Average Assumptions Used to Calculate the Projected Benefit Obligations for Direct Plans (Details) | Oct. 31, 2023 | Oct. 31, 2022 |
Defined Benefit Plans | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Discount rate | 4.40% | 3.90% |
Expected increase in compensation levels | 2.90% | 3% |
Interest crediting rate | 2.40% | 2.40% |
Post-Retirement Benefit Plans | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Discount rate | 6.50% | 6% |
Expected increase in compensation levels | 0% | 0% |
Interest crediting rate | 5.30% | 4.30% |
Retirement and Post-Retiremen_8
Retirement and Post-Retirement Benefit Plans - Net Amounts Recognized for the Direct Plans in Combined and Consolidated Balance Sheets (Details) - USD ($) $ in Millions | Oct. 31, 2023 | Oct. 31, 2022 |
Defined Benefit Plans | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Non-current assets | $ 1,313 | $ 1,287 |
Current liabilities | (51) | (43) |
Non-current liabilities | (745) | (846) |
Funded status at end of year | 517 | 398 |
Post-Retirement Benefit Plans | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Non-current assets | 0 | 0 |
Current liabilities | (8) | (7) |
Non-current liabilities | (72) | (71) |
Funded status at end of year | $ (80) | $ (78) |
Retirement and Post-Retiremen_9
Retirement and Post-Retirement Benefit Plans - Pre-Tax Net Actuarial Loss and Prior Service Benefit Recognized in Accumulated Other Comprehensive Loss for the Defined Benefit Plans (Details) $ in Millions | Oct. 31, 2023 USD ($) |
Defined Benefit Plans | |
Defined Benefit Plan, Plan Assets, Allocation [Line Items] | |
Net actuarial loss (gain) | $ 2,669 |
Prior service benefit | 3 |
Total recognized in accumulated other comprehensive loss | 2,672 |
Post-Retirement Benefit Plans | |
Defined Benefit Plan, Plan Assets, Allocation [Line Items] | |
Net actuarial loss (gain) | (11) |
Prior service benefit | 0 |
Total recognized in accumulated other comprehensive loss | $ (11) |
Retirement and Post-Retireme_10
Retirement and Post-Retirement Benefit Plans - Direct Defined Benefit Plans with Projected Benefit Obligations Exceeding the Fair Value of Plan Assets (Details) - Defined Benefit Plans - USD ($) $ in Millions | Oct. 31, 2023 | Oct. 31, 2022 |
Defined Benefit Plan, Plan Assets, Allocation [Line Items] | ||
Aggregate fair value of plan assets | $ 1,969 | $ 1,907 |
Aggregate projected benefit obligation | $ 2,765 | $ 2,795 |
Retirement and Post-Retireme_11
Retirement and Post-Retirement Benefit Plans - Direct Defined Benefit Plans with Accumulated Benefit Obligations Exceeding the Fair Value of Plan Assets (Details) - Defined Benefit Plans - USD ($) $ in Millions | Oct. 31, 2023 | Oct. 31, 2022 |
Defined Benefit Plan, Plan Assets, Allocation [Line Items] | ||
Aggregate fair value of plan assets | $ 1,969 | $ 412 |
Aggregate accumulated benefit obligation | $ 2,675 | $ 1,206 |
Retirement and Post-Retireme_12
Retirement and Post-Retirement Benefit Plans - Fair Value of Non-U.S. Defined Benefit Plan Assets by Asset Category Within the Fair Value Hierarchy (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Oct. 31, 2023 | Oct. 31, 2022 | Oct. 31, 2021 | ||
Recovery Rate | Maximum | Valuation Technique, Discounted Cash Flow | ||||
Defined benefit plans | ||||
Measurement inputs | 100% | |||
Yield | Minimum | Valuation Technique, Discounted Cash Flow | ||||
Defined benefit plans | ||||
Measurement inputs | 6% | 4% | ||
Yield | Maximum | Valuation Technique, Discounted Cash Flow | ||||
Defined benefit plans | ||||
Measurement inputs | 22% | 18% | ||
Yield | Weighted Average | Valuation Technique, Discounted Cash Flow | ||||
Defined benefit plans | ||||
Measurement inputs | 10% | 7% | ||
Discount Rate | Minimum | Valuation Technique, Discounted Cash Flow | ||||
Defined benefit plans | ||||
Measurement inputs | 4% | 1% | ||
Discount Rate | Maximum | Valuation Technique, Discounted Cash Flow | ||||
Defined benefit plans | ||||
Measurement inputs | 5% | 5% | ||
Discount Rate | Weighted Average | Valuation Technique, Discounted Cash Flow | ||||
Defined benefit plans | ||||
Measurement inputs | 4% | 3% | ||
Internal rate of return | Minimum | Valuation Technique, Discounted Cash Flow | ||||
Defined benefit plans | ||||
Measurement inputs | 5% | 4% | ||
Internal rate of return | Maximum | Valuation Technique, Discounted Cash Flow | ||||
Defined benefit plans | ||||
Measurement inputs | 21% | 11% | ||
Internal rate of return | Weighted Average | Valuation Technique, Discounted Cash Flow | ||||
Defined benefit plans | ||||
Measurement inputs | 10% | 8% | ||
United Kingdom | Discount Rate | Minimum | Valuation Technique, Discounted Cash Flow | ||||
Defined benefit plans | ||||
Measurement inputs | 3% | 3% | ||
United Kingdom | Discount Rate | Maximum | Valuation Technique, Discounted Cash Flow | ||||
Defined benefit plans | ||||
Measurement inputs | 28% | 30% | ||
United Kingdom | Discount Rate | Weighted Average | Valuation Technique, Discounted Cash Flow | ||||
Defined benefit plans | ||||
Measurement inputs | 14% | 12% | ||
GERMANY | Minimum | Valuation Approach, Income Capitalization and Cost Approach | ||||
Defined benefit plans | ||||
Measurement inputs | 4% | 3% | ||
GERMANY | Maximum | Valuation Approach, Income Capitalization and Cost Approach | ||||
Defined benefit plans | ||||
Measurement inputs | 6% | 6% | ||
GERMANY | Weighted Average | Valuation Approach, Income Capitalization and Cost Approach | ||||
Defined benefit plans | ||||
Measurement inputs | 4% | 4% | ||
GERMANY | Internal rate of return | Minimum | Valuation Approach, Income Capitalization and Cost Approach | ||||
Defined benefit plans | ||||
Measurement inputs | 5% | 4% | ||
GERMANY | Internal rate of return | Maximum | Valuation Approach, Income Capitalization and Cost Approach | ||||
Defined benefit plans | ||||
Measurement inputs | 8% | 7% | ||
GERMANY | Internal rate of return | Weighted Average | Valuation Approach, Income Capitalization and Cost Approach | ||||
Defined benefit plans | ||||
Measurement inputs | 7% | 6% | ||
Defined Benefit Plans | ||||
Defined benefit plans | ||||
Fair value of plan assets | $ 9,879 | $ 9,915 | $ 15,354 | |
Defined Benefit Plans | Derivative | ||||
Defined benefit plans | ||||
Defined benefit plan, plan assets, equity exposure | 272 | |||
Defined Benefit Plans | Non-U.S. Plans | ||||
Defined benefit plans | ||||
Fair value of plan assets | 9,879 | 9,915 | ||
Defined Benefit Plans | Non-U.S. Plans | Equity Securities U S | ||||
Defined benefit plans | ||||
Fair value of plan assets | 555 | 519 | ||
Defined Benefit Plans | Non-U.S. Plans | Equity Securities Non U S | ||||
Defined benefit plans | ||||
Fair value of plan assets | 322 | 310 | ||
Defined Benefit Plans | Non-U.S. Plans | Corporate Debt Securities | ||||
Defined benefit plans | ||||
Fair value of plan assets | 1,277 | 961 | ||
Defined Benefit Plans | Non-U.S. Plans | Government debt securities | ||||
Defined benefit plans | ||||
Fair value of plan assets | [1] | 3,883 | 4,853 | |
Defined Benefit Plans | Non-U.S. Plans | Other debt securities(1) | ||||
Defined benefit plans | ||||
Fair value of plan assets | [2] | 1,460 | 1,063 | |
Defined Benefit Plans | Non-U.S. Plans | Private Equity | ||||
Defined benefit plans | ||||
Fair value of plan assets | 46 | 50 | ||
Defined Benefit Plans | Non-U.S. Plans | Hybrids | ||||
Defined benefit plans | ||||
Fair value of plan assets | [3] | 535 | 967 | |
Defined Benefit Plans | Non-U.S. Plans | Hybrids At NAV | ||||
Defined benefit plans | ||||
Fair value of plan assets | [4] | 358 | 377 | |
Defined Benefit Plans | Non-U.S. Plans | Equities at NAV | ||||
Defined benefit plans | ||||
Fair value of plan assets | [5] | 988 | 922 | |
Defined Benefit Plans | Non-U.S. Plans | Fixed Income at NAV | ||||
Defined benefit plans | ||||
Fair value of plan assets | [5] | 471 | 449 | |
Defined Benefit Plans | Non-U.S. Plans | Emerging Markets at NAV | ||||
Defined benefit plans | ||||
Fair value of plan assets | [5] | 284 | 263 | |
Defined Benefit Plans | Non-U.S. Plans | Alternative investments at NAV | ||||
Defined benefit plans | ||||
Fair value of plan assets | [5] | 1 | 16 | |
Defined Benefit Plans | Non-U.S. Plans | Real Estate Funds | ||||
Defined benefit plans | ||||
Fair value of plan assets | [6] | 584 | 497 | |
Defined Benefit Plans | Non-U.S. Plans | Insurance Group Annuity Contracts | ||||
Defined benefit plans | ||||
Fair value of plan assets | 108 | 105 | ||
Defined Benefit Plans | Non-U.S. Plans | Cash and Cash Equivalents | ||||
Defined benefit plans | ||||
Fair value of plan assets | 315 | 652 | ||
Defined Benefit Plans | Non-U.S. Plans | Other | ||||
Defined benefit plans | ||||
Fair value of plan assets | [7] | 40 | 15 | |
Defined Benefit Plans | Non-U.S. Plans | Obligation to return cash received from repurchase agreements | ||||
Defined benefit plans | ||||
Fair value of plan assets | [1] | (1,348) | (2,104) | |
Defined Benefit Plans | United Kingdom | ||||
Defined benefit plans | ||||
Repurchase investments | 2,300 | 3,000 | ||
Defined Benefit Plans | Level 1 | Non-U.S. Plans | ||||
Defined benefit plans | ||||
Fair value of plan assets | 912 | 946 | ||
Defined Benefit Plans | Level 1 | Non-U.S. Plans | Equity Securities U S | ||||
Defined benefit plans | ||||
Fair value of plan assets | 543 | 510 | ||
Defined Benefit Plans | Level 1 | Non-U.S. Plans | Equity Securities Non U S | ||||
Defined benefit plans | ||||
Fair value of plan assets | 110 | 214 | ||
Defined Benefit Plans | Level 1 | Non-U.S. Plans | Corporate Debt Securities | ||||
Defined benefit plans | ||||
Fair value of plan assets | 0 | 0 | ||
Defined Benefit Plans | Level 1 | Non-U.S. Plans | Government debt securities | ||||
Defined benefit plans | ||||
Fair value of plan assets | 0 | 0 | ||
Defined Benefit Plans | Level 1 | Non-U.S. Plans | Other debt securities(1) | ||||
Defined benefit plans | ||||
Fair value of plan assets | 0 | 0 | ||
Defined Benefit Plans | Level 1 | Non-U.S. Plans | Private Equity | ||||
Defined benefit plans | ||||
Fair value of plan assets | 0 | 0 | ||
Defined Benefit Plans | Level 1 | Non-U.S. Plans | Hybrids | ||||
Defined benefit plans | ||||
Fair value of plan assets | 0 | 0 | ||
Defined Benefit Plans | Level 1 | Non-U.S. Plans | Real Estate Funds | ||||
Defined benefit plans | ||||
Fair value of plan assets | 20 | 22 | ||
Defined Benefit Plans | Level 1 | Non-U.S. Plans | Insurance Group Annuity Contracts | ||||
Defined benefit plans | ||||
Fair value of plan assets | 0 | 0 | ||
Defined Benefit Plans | Level 1 | Non-U.S. Plans | Cash and Cash Equivalents | ||||
Defined benefit plans | ||||
Fair value of plan assets | 222 | 173 | ||
Defined Benefit Plans | Level 1 | Non-U.S. Plans | Other | ||||
Defined benefit plans | ||||
Fair value of plan assets | 17 | 27 | ||
Defined Benefit Plans | Level 1 | Non-U.S. Plans | Obligation to return cash received from repurchase agreements | ||||
Defined benefit plans | ||||
Fair value of plan assets | 0 | 0 | ||
Defined Benefit Plans | Level 2 | Non-U.S. Plans | ||||
Defined benefit plans | ||||
Fair value of plan assets | 5,591 | 5,596 | ||
Defined Benefit Plans | Level 2 | Non-U.S. Plans | Equity Securities U S | ||||
Defined benefit plans | ||||
Fair value of plan assets | 12 | 9 | ||
Defined Benefit Plans | Level 2 | Non-U.S. Plans | Equity Securities Non U S | ||||
Defined benefit plans | ||||
Fair value of plan assets | 212 | 96 | ||
Defined Benefit Plans | Level 2 | Non-U.S. Plans | Corporate Debt Securities | ||||
Defined benefit plans | ||||
Fair value of plan assets | 1,277 | 961 | ||
Defined Benefit Plans | Level 2 | Non-U.S. Plans | Government debt securities | ||||
Defined benefit plans | ||||
Fair value of plan assets | 3,883 | 4,853 | ||
Defined Benefit Plans | Level 2 | Non-U.S. Plans | Other debt securities(1) | ||||
Defined benefit plans | ||||
Fair value of plan assets | 661 | 131 | ||
Defined Benefit Plans | Level 2 | Non-U.S. Plans | Private Equity | ||||
Defined benefit plans | ||||
Fair value of plan assets | 5 | 4 | ||
Defined Benefit Plans | Level 2 | Non-U.S. Plans | Hybrids | ||||
Defined benefit plans | ||||
Fair value of plan assets | 358 | 785 | ||
Defined Benefit Plans | Level 2 | Non-U.S. Plans | Real Estate Funds | ||||
Defined benefit plans | ||||
Fair value of plan assets | 327 | 311 | ||
Defined Benefit Plans | Level 2 | Non-U.S. Plans | Insurance Group Annuity Contracts | ||||
Defined benefit plans | ||||
Fair value of plan assets | 88 | 84 | ||
Defined Benefit Plans | Level 2 | Non-U.S. Plans | Cash and Cash Equivalents | ||||
Defined benefit plans | ||||
Fair value of plan assets | 93 | 479 | ||
Defined Benefit Plans | Level 2 | Non-U.S. Plans | Other | ||||
Defined benefit plans | ||||
Fair value of plan assets | 23 | (13) | ||
Defined Benefit Plans | Level 2 | Non-U.S. Plans | Obligation to return cash received from repurchase agreements | ||||
Defined benefit plans | ||||
Fair value of plan assets | (1,348) | (2,104) | ||
Defined Benefit Plans | Level 3 | Non-U.S. Plans | ||||
Defined benefit plans | ||||
Fair value of plan assets | 1,274 | 1,346 | 992 | |
Defined Benefit Plans | Level 3 | Non-U.S. Plans | Equity Securities U S | ||||
Defined benefit plans | ||||
Fair value of plan assets | 0 | 0 | ||
Defined Benefit Plans | Level 3 | Non-U.S. Plans | Equity Securities Non U S | ||||
Defined benefit plans | ||||
Fair value of plan assets | 0 | 0 | ||
Defined Benefit Plans | Level 3 | Non-U.S. Plans | Corporate Debt Securities | ||||
Defined benefit plans | ||||
Fair value of plan assets | 0 | 0 | ||
Defined Benefit Plans | Level 3 | Non-U.S. Plans | Government debt securities | ||||
Defined benefit plans | ||||
Fair value of plan assets | 0 | 0 | ||
Defined Benefit Plans | Level 3 | Non-U.S. Plans | Other debt securities(1) | ||||
Defined benefit plans | ||||
Fair value of plan assets | 799 | 932 | 748 | |
Defined Benefit Plans | Level 3 | Non-U.S. Plans | Private Equity | ||||
Defined benefit plans | ||||
Fair value of plan assets | 41 | 46 | 46 | |
Defined Benefit Plans | Level 3 | Non-U.S. Plans | Hybrids | ||||
Defined benefit plans | ||||
Fair value of plan assets | 177 | 182 | 116 | |
Defined Benefit Plans | Level 3 | Non-U.S. Plans | Real Estate Funds | ||||
Defined benefit plans | ||||
Fair value of plan assets | 237 | 164 | 48 | |
Defined Benefit Plans | Level 3 | Non-U.S. Plans | Insurance Group Annuity Contracts | ||||
Defined benefit plans | ||||
Fair value of plan assets | 20 | 21 | 33 | |
Defined Benefit Plans | Level 3 | Non-U.S. Plans | Cash and Cash Equivalents | ||||
Defined benefit plans | ||||
Fair value of plan assets | 0 | 0 | ||
Defined Benefit Plans | Level 3 | Non-U.S. Plans | Other | ||||
Defined benefit plans | ||||
Fair value of plan assets | 0 | 1 | $ 1 | |
Defined Benefit Plans | Level 3 | Non-U.S. Plans | Obligation to return cash received from repurchase agreements | ||||
Defined benefit plans | ||||
Fair value of plan assets | $ 0 | $ 0 | ||
[1] Repurchase agreements, primarily in the UK, represent the plans’ short-term borrowing to hedge against interest rate and inflation risks. Investments in approximately $2.3 billion and $3.0 billion of government bonds collateralize this short-term borrowing at October 31, 2023 and 2022, respectively. The plans have an obligation to return the cash after the term of the agreements. Due to the short-term nature of the agreements, the outstanding balance of the obligation approximates fair value. Includes funds that invest primarily in asset-backed securities, mortgage-backed securities, collateralized loan obligations, and/or private debt investments. Primary valuation techniques for level 3 investments include discounted cash flows and broker quotes and/or 3rd party pricing services. Significant unobservable inputs include yields which are determined by considering the market yield of comparable public debt instruments adjusted for estimated losses to reflect where the expected recovery rate would be less than 100%, discount rates, and internal rate of return (IRR). The yields ranged from 6% to 22%, with the weighted average around 10%. In the prior year, the yields ranged from 4% to 18%, with the weighted average around 7%. The discount rates ranged from 4% to 5%, with the weighted average around 4%. In the prior year, the discount rates ranged from 1% to 5%, with the weighted average around 3%. The IRR ranged from 5% to 21%, with the main weighted average around 10%. In the prior year, the IRR ranged from 4% to 11%, with the main weighted average around 8%. Generally, an increase in yield and discounted rates may result in a decrease in the fair value of certain investments. Includes funds, primarily in the UK, that invest in both private and public equities, as well as emerging markets across all sectors. The funds also hold fixed income and derivative instruments to hedge interest rate and inflation risk. In addition, the funds include units in transferable securities, collective investment schemes, money market funds, asset-backed income, cash, and deposits. Primary valuation techniques for level 3 investments include discounted cash flows and book value or net asset value. Significant unobservable inputs include discount rates. The discount rates ranged from 3% to 28%, with the weighted average around 14%. In the prior year, the discount rates ranged from 3% to 30%, with the weighted average around 12%. Generally, an increase in discount rates may result in a decrease in the fair value of certain investments. Includes a pooled fund in the UK, that seeks a rate of return with direct or indirect linkage to UK inflation by investing in vehicles including bonds, long lease property, income strips, asset-backed securities, and index linked assets. Units are available for subscription on the first business day of each calendar month at net asset value. There are no redemption restrictions or future commitments on these investments. Common Contractual Funds (“CCFs”) are investment arrangements in which institutional investors pool their assets. Units may be acquired in four different sub-funds focused on equities, fixed income, alternative investments, and emerging markets. Each sub-fund is invested in accordance with the fund's investment objective and units are issued in relation to each sub-fund. While the sub-funds are not publicly traded, the custodian strikes a net asset value either once or twice a month, depending on the sub-fund. There are no redemption restrictions or future commitments on these investments. Includes funds, primarily in Germany, that invest in a diversified portfolio of European real estate assets exposed to logistics real estate properties, food retailing properties, residential and commercial properties, and properties under development. Primary valuation techniques for level 3 investments include the income capitalization approach and cost approach. Significant unobservable inputs include rental yield and IRR. The rental yield rates ranged from 4% to 6%, with the weighted average around 4%. In the prior year, the rental yield rates ranged from 3% to 6%, with the weighted average around 4%. The IRR ranged from 5% to 8%, with the main weighted average around 7%. In the prior year, the IRR ranged from 4% to 7%, with the main weighted average around 6%. Generally, an increase in rental yield rates may result in a decrease in the fair value of certain investments. Includes life insurance investment policies, unsettled transactions, and derivative instruments. As of October 31, 2023, the derivative instruments include synthetic equity swaps held by the UK plans with equity exposure of $272 million. |
Retirement and Post-Retireme_13
Retirement and Post-Retirement Benefit Plans - Changes in Fair Value Measurements of Level 3 Investments for the Non-U.S. Defined Benefit Plans (Details) - Defined Benefit Plans - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2023 | Oct. 31, 2022 | ||
Changes in fair value measurements of Level 3 investments | |||
Fair value - beginning of year | $ 9,915 | $ 15,354 | |
Actual return on plan assets: | |||
Fair value—end of year | 9,879 | 9,915 | |
Non-U.S. Plans | |||
Changes in fair value measurements of Level 3 investments | |||
Fair value - beginning of year | 9,915 | ||
Actual return on plan assets: | |||
Fair value—end of year | 9,879 | 9,915 | |
Non-U.S. Plans | Debt-Other | |||
Changes in fair value measurements of Level 3 investments | |||
Fair value - beginning of year | [1] | 1,063 | |
Actual return on plan assets: | |||
Fair value—end of year | [1] | 1,460 | 1,063 |
Non-U.S. Plans | Private Equity | |||
Changes in fair value measurements of Level 3 investments | |||
Fair value - beginning of year | 50 | ||
Actual return on plan assets: | |||
Fair value—end of year | 46 | 50 | |
Non-U.S. Plans | Hybrids | |||
Changes in fair value measurements of Level 3 investments | |||
Fair value - beginning of year | [2] | 967 | |
Actual return on plan assets: | |||
Fair value—end of year | [2] | 535 | 967 |
Non-U.S. Plans | Real Estate Funds | |||
Changes in fair value measurements of Level 3 investments | |||
Fair value - beginning of year | [3] | 497 | |
Actual return on plan assets: | |||
Fair value—end of year | [3] | 584 | 497 |
Non-U.S. Plans | Insurance Group Annuities | |||
Changes in fair value measurements of Level 3 investments | |||
Fair value - beginning of year | 105 | ||
Actual return on plan assets: | |||
Fair value—end of year | 108 | 105 | |
Non-U.S. Plans | Other | |||
Changes in fair value measurements of Level 3 investments | |||
Fair value - beginning of year | [4] | 15 | |
Actual return on plan assets: | |||
Fair value—end of year | [4] | 40 | 15 |
Non-U.S. Plans | Level 3 | |||
Changes in fair value measurements of Level 3 investments | |||
Fair value - beginning of year | 1,346 | 992 | |
Actual return on plan assets: | |||
Relating to assets held at the reporting date | 59 | (90) | |
Relating to assets sold during the period | 3 | 7 | |
Purchases, sales, and settlements | (134) | 437 | |
Fair value—end of year | 1,274 | 1,346 | |
Non-U.S. Plans | Level 3 | Debt-Other | |||
Changes in fair value measurements of Level 3 investments | |||
Fair value - beginning of year | 932 | 748 | |
Actual return on plan assets: | |||
Relating to assets held at the reporting date | 72 | (97) | |
Relating to assets sold during the period | 0 | 0 | |
Purchases, sales, and settlements | (205) | 281 | |
Fair value—end of year | 799 | 932 | |
Non-U.S. Plans | Level 3 | Private Equity | |||
Changes in fair value measurements of Level 3 investments | |||
Fair value - beginning of year | 46 | 46 | |
Actual return on plan assets: | |||
Relating to assets held at the reporting date | (8) | 0 | |
Relating to assets sold during the period | 3 | 7 | |
Purchases, sales, and settlements | 0 | (7) | |
Fair value—end of year | 41 | 46 | |
Non-U.S. Plans | Level 3 | Hybrids | |||
Changes in fair value measurements of Level 3 investments | |||
Fair value - beginning of year | 182 | 116 | |
Actual return on plan assets: | |||
Relating to assets held at the reporting date | 2 | 21 | |
Relating to assets sold during the period | 0 | 0 | |
Purchases, sales, and settlements | (7) | 45 | |
Fair value—end of year | 177 | 182 | |
Non-U.S. Plans | Level 3 | Real Estate Funds | |||
Changes in fair value measurements of Level 3 investments | |||
Fair value - beginning of year | 164 | 48 | |
Actual return on plan assets: | |||
Relating to assets held at the reporting date | (6) | (3) | |
Relating to assets sold during the period | 0 | 0 | |
Purchases, sales, and settlements | 79 | 119 | |
Fair value—end of year | 237 | 164 | |
Non-U.S. Plans | Level 3 | Insurance Group Annuities | |||
Changes in fair value measurements of Level 3 investments | |||
Fair value - beginning of year | 21 | 33 | |
Actual return on plan assets: | |||
Relating to assets held at the reporting date | (1) | (11) | |
Relating to assets sold during the period | 0 | 0 | |
Purchases, sales, and settlements | 0 | (1) | |
Fair value—end of year | 20 | 21 | |
Non-U.S. Plans | Level 3 | Other | |||
Changes in fair value measurements of Level 3 investments | |||
Fair value - beginning of year | 1 | 1 | |
Actual return on plan assets: | |||
Relating to assets held at the reporting date | 0 | 0 | |
Relating to assets sold during the period | 0 | 0 | |
Purchases, sales, and settlements | (1) | 0 | |
Fair value—end of year | $ 0 | $ 1 | |
[1] Includes funds that invest primarily in asset-backed securities, mortgage-backed securities, collateralized loan obligations, and/or private debt investments. Primary valuation techniques for level 3 investments include discounted cash flows and broker quotes and/or 3rd party pricing services. Significant unobservable inputs include yields which are determined by considering the market yield of comparable public debt instruments adjusted for estimated losses to reflect where the expected recovery rate would be less than 100%, discount rates, and internal rate of return (IRR). The yields ranged from 6% to 22%, with the weighted average around 10%. In the prior year, the yields ranged from 4% to 18%, with the weighted average around 7%. The discount rates ranged from 4% to 5%, with the weighted average around 4%. In the prior year, the discount rates ranged from 1% to 5%, with the weighted average around 3%. The IRR ranged from 5% to 21%, with the main weighted average around 10%. In the prior year, the IRR ranged from 4% to 11%, with the main weighted average around 8%. Generally, an increase in yield and discounted rates may result in a decrease in the fair value of certain investments. Includes funds, primarily in the UK, that invest in both private and public equities, as well as emerging markets across all sectors. The funds also hold fixed income and derivative instruments to hedge interest rate and inflation risk. In addition, the funds include units in transferable securities, collective investment schemes, money market funds, asset-backed income, cash, and deposits. Primary valuation techniques for level 3 investments include discounted cash flows and book value or net asset value. Significant unobservable inputs include discount rates. The discount rates ranged from 3% to 28%, with the weighted average around 14%. In the prior year, the discount rates ranged from 3% to 30%, with the weighted average around 12%. Generally, an increase in discount rates may result in a decrease in the fair value of certain investments. Includes funds, primarily in Germany, that invest in a diversified portfolio of European real estate assets exposed to logistics real estate properties, food retailing properties, residential and commercial properties, and properties under development. Primary valuation techniques for level 3 investments include the income capitalization approach and cost approach. Significant unobservable inputs include rental yield and IRR. The rental yield rates ranged from 4% to 6%, with the weighted average around 4%. In the prior year, the rental yield rates ranged from 3% to 6%, with the weighted average around 4%. The IRR ranged from 5% to 8%, with the main weighted average around 7%. In the prior year, the IRR ranged from 4% to 7%, with the main weighted average around 6%. Generally, an increase in rental yield rates may result in a decrease in the fair value of certain investments. Includes life insurance investment policies, unsettled transactions, and derivative instruments. As of October 31, 2023, the derivative instruments include synthetic equity swaps held by the UK plans with equity exposure of $272 million. |
Retirement and Post-Retireme_14
Retirement and Post-Retirement Benefit Plans - Weighted Average Target and Actual Asset Allocations Across Non-U.S. Defined Benefit Plans (Details) - Non-U.S. Plans - Defined Benefit Plans | Oct. 31, 2023 | Oct. 31, 2022 | |
Defined Benefit Plan, Plan Assets, Allocation [Line Items] | |||
Target Allocation | 100% | ||
Plan Assets | 100% | 100% | |
Public equity securities | |||
Defined Benefit Plan, Plan Assets, Allocation [Line Items] | |||
Plan Assets | 21.80% | 20.30% | |
Private/hybrid equity securities | |||
Defined Benefit Plan, Plan Assets, Allocation [Line Items] | |||
Plan Assets | 9.50% | 14.20% | |
Real Estate and other | |||
Defined Benefit Plan, Plan Assets, Allocation [Line Items] | |||
Plan Assets | 6.30% | [1] | 5.20% |
Equity-related investments | |||
Defined Benefit Plan, Plan Assets, Allocation [Line Items] | |||
Target Allocation | 46.10% | ||
Plan Assets | 37.60% | [1] | 39.70% |
Debt securities | |||
Defined Benefit Plan, Plan Assets, Allocation [Line Items] | |||
Target Allocation | 52% | ||
Plan Assets | 59.20% | 53.70% | |
Cash and Cash Equivalents | |||
Defined Benefit Plan, Plan Assets, Allocation [Line Items] | |||
Target Allocation | 1.90% | ||
Plan Assets | 3.20% | 6.60% | |
[1]Included in Real estate and other investments are synthetic equity swaps with equity exposure of $272 million, which is held in the UK plans as of October 31, 2023. |
Retirement and Post-Retireme_15
Retirement and Post-Retirement Benefit Plans - Estimated Future Benefits Payments (Details) $ in Millions | Oct. 31, 2023 USD ($) |
Defined Benefit Plans | |
Defined Benefit Plan, Plan Assets, Allocation [Line Items] | |
2024 | $ 558 |
2025 | 523 |
2026 | 536 |
2027 | 552 |
2028 | 573 |
Next five fiscal years to October 31, 2033 | 2,999 |
Post-Retirement Benefit Plans | |
Defined Benefit Plan, Plan Assets, Allocation [Line Items] | |
2024 | 12 |
2025 | 13 |
2026 | 13 |
2027 | 12 |
2028 | 13 |
Next five fiscal years to October 31, 2033 | $ 63 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) - shares | Apr. 14, 2021 | Oct. 31, 2023 | Apr. 05, 2022 | Apr. 13, 2021 |
2021 Stock Incentive Plan | ||||
Share-based compensation | ||||
Vesting period | 3 years | |||
Number of shares authorized and available for issuance (shares) | 7,000,000 | 35,900,000 | ||
2015 Stock Incentive Plan | ||||
Share-based compensation | ||||
Number of shares authorized and available for issuance (shares) | 35,800,000 | |||
2021 Stock Incentive Plan Amendment | ||||
Share-based compensation | ||||
Number of shares authorized and available for issuance (shares) | 15,000,000 |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of Stock-Based Compensation Expense and Resulting Tax Benefits (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2023 | Oct. 31, 2022 | Oct. 31, 2021 | |
Share-Based Payment Arrangement [Abstract] | |||
Stock-based compensation expense | $ 428 | $ 391 | $ 382 |
Income tax benefit | (92) | (75) | (70) |
Stock-based compensation expense, net of tax | $ 336 | $ 316 | $ 312 |
Stock-Based Compensation - Cons
Stock-Based Compensation - Consolidated Statement of Earnings Location of Stock-Based Compensation Expense (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2023 | Oct. 31, 2022 | Oct. 31, 2021 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Stock-based compensation expense | $ 428 | $ 391 | $ 382 |
Continuing Operations | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Stock-based compensation expense | 428 | 391 | 382 |
Cost of sales | Continuing Operations | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Stock-based compensation expense | 47 | 46 | 40 |
Research and development | Continuing Operations | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Stock-based compensation expense | 161 | 143 | 124 |
Selling, general and administrative | Continuing Operations | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Stock-based compensation expense | 220 | 202 | 208 |
Acquisition, disposition and other related charges | Continuing Operations | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Stock-based compensation expense | $ 0 | $ 0 | $ 10 |
Stock-Based Compensation- Emplo
Stock-Based Compensation- Employee Stock Purchase Plan (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Oct. 31, 2023 | Oct. 31, 2022 | Oct. 31, 2021 | Nov. 01, 2015 | |
Share-based compensation | ||||
Common stock, authorized (shares) | 9,600,000,000 | 9,600,000,000 | ||
Maximum contribution limit as percentage of base compensation (as a percent) | 15% | |||
Current offering period | 24 months | |||
Offering period | 6 months | |||
Share-Based Payment Arrangement, Expense, after Tax | $ 336 | $ 316 | $ 312 | |
Employee Stock Purchase Plan | ||||
Share-based compensation | ||||
Common stock, authorized (shares) | 80,000,000 | |||
Maximum contribution limit as percentage of base compensation (as a percent) | 10% | |||
Stock purchase price as a percentage of the fair market value on the purchase date | 95% | |||
Share-Based Payment Arrangement, Expense, after Tax | $ 0 |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Restricted Stock Activity (Details) - Restricted Stock Awards - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 12 Months Ended | ||
Oct. 31, 2023 | Oct. 31, 2022 | Oct. 31, 2021 | |
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |||
Outstanding at beginning of period (in shares) | 51,902 | ||
Granted and assumed through acquisition (in shares) | 30,088 | ||
Vested (in shares) | (24,473) | ||
Forfeited/canceled (in shares) | (3,128) | ||
Outstanding at end of period (in shares) | 54,389 | 51,902 | |
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | |||
Outstanding at beginning of period (in dollars per share) | $ 14 | ||
Granted and assumed through acquisition (in dollars per share) | 16 | ||
Vested (in dollars per share) | 14 | ||
Forfeited/canceled (in dollars per share) | 15 | ||
Outstanding at end of period (in dollars per share) | $ 15 | $ 14 | |
Total grant date fair value of restricted stock vested | $ 319 | $ 262 | $ 271 |
Unrecognized pre-tax stock-based compensation expense | $ 325 | ||
Remaining weighted-average vesting period over which pre-tax stock-based compensation expense is expected to be recognized | 1 year 3 months 18 days |
Taxes on Earnings - Provision (
Taxes on Earnings - Provision (Benefit) for Taxes (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2023 | Oct. 31, 2022 | Oct. 31, 2021 | |
Domestic and foreign components of earnings (loss) before taxes | |||
U.S. | $ (1,105) | $ (1,138) | $ (1,128) |
Non-U.S. | 3,335 | 2,014 | 4,715 |
Earnings before provision for taxes | 2,230 | 876 | 3,587 |
U.S. federal taxes: | |||
Current | 0 | 12 | 26 |
Deferred | (88) | (98) | (79) |
Non-U.S. taxes: | |||
Current | 256 | 288 | 305 |
Deferred | 23 | (143) | (116) |
State taxes: | |||
Current | 16 | (43) | (4) |
Deferred State and Local Income Tax Expense (Benefit) | (2) | (8) | 28 |
Provision for (benefit from) taxes on earnings | $ (205) | $ (8) | $ (160) |
Taxes on Earnings - Summary of
Taxes on Earnings - Summary of Differences Between the U.S. Federal Statutory Income Tax Rate and Effective Tax Rate (Details) | 12 Months Ended | ||
Oct. 31, 2023 | Oct. 31, 2022 | Oct. 31, 2021 | |
Differences between the U.S. federal statutory income tax rate and HP's effective tax rate | |||
U.S. federal statutory income tax rate | 21% | 21% | 21% |
State income taxes, net of federal tax benefit | 0.90% | 2.80% | 0.70% |
Lower rates in other jurisdictions, net | (4.40%) | (0.90%) | (7.60%) |
Valuation allowance | (2.80%) | (31.50%) | (10.00%) |
U.S. permanent differences | (1.50%) | 6% | 3.60% |
U.S. R&D credit | (2.10%) | (5.10%) | (1.30%) |
Uncertain tax positions | (2.00%) | (15.60%) | (0.90%) |
Goodwill impairment | 0% | 21.50% | 0% |
Tax law changes | 0% | 0% | (1.10%) |
Other, net | 0.10% | 2.70% | 0.10% |
Effective tax rate (as a percent) | 9.20% | 0.90% | 4.50% |
Taxes on Earnings - Narrative (
Taxes on Earnings - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Oct. 31, 2023 | Oct. 31, 2022 | Oct. 31, 2021 | |
Income Tax Examination [Line Items] | |||
Net income tax charges (benefits) | $ (131) | $ (454) | $ (294) |
Income tax benefits on restructuring charges, separation costs, transformation costs and acquisition and other related charges | 99 | 180 | |
Effective Income Tax Rate Reconciliation, Tax Expense (Benefit), Share-Based Payment Arrangement, Amount | 19 | ||
Change in enacted tax rate | (39) | ||
Effective income tax rate reconciliation, tax settlement, domestic, amount | (43) | ||
Income tax benefits, foreign tax audit matters | 42 | ||
Pre-Separation tax matters | 30 | 32 | |
Effective income tax rate reconciliation, utilization of capital losses, amount | (27) | ||
Effective income tax rate reconciliation, GILTI, amount | 12 | ||
Effective income tax rate reconciliation, tax settlement, foreign, amount | (11) | ||
Litigation settlement and early debt prepayment premium | (337) | ||
Income tax charges related to change in valuation allowance | 244 | ||
Tax expense due to litigation settlement | (93) | ||
Income tax benefits, reduced rates for subsidiaries in certain countries | $ 857 | $ 832 | $ 889 |
Income tax benefits, reduced rates for subsidiaries in certain countries (in dollars per share) | $ 0.65 | $ 0.63 | $ 0.67 |
Significant Change in Unrecognized Tax Benefits is Reasonably Possible, Amount of Unrecorded Benefit | $ 16 | ||
Undistributed earnings from non-U.S. operations | 9,400 | ||
Foreign | |||
Income Tax Examination [Line Items] | |||
Income tax benefits on restructuring charges, separation costs, transformation costs and acquisition and other related charges | $ 104 | ||
Change in enacted tax rate | $ (150) | $ (157) |
Taxes on Earnings - Uncertain T
Taxes on Earnings - Uncertain Tax Positions (Details) $ in Millions | 3 Months Ended | 12 Months Ended | |||
Nov. 21, 2023 USD ($) | Jan. 31, 2022 USD ($) | Oct. 31, 2023 USD ($) country | Oct. 31, 2022 USD ($) | Oct. 31, 2021 USD ($) | |
Reconciliation of unrecognized tax benefits | |||||
Unrecognized Tax Benefits, Beginning Balance | $ 2,131 | $ 674 | $ 2,131 | $ 2,159 | |
Increases: | |||||
For current year's tax positions | 67 | 81 | 24 | ||
For prior years' tax positions | 20 | 41 | 64 | ||
Decreases: | |||||
For prior years' tax positions | (2) | (48) | (31) | ||
Statute of limitations expiration | (4) | (12) | (44) | ||
Settlements with taxing authorities | $ (1,500) | (83) | (1,491) | (15) | |
Settlements related to joint and several positions indemnified by HP Inc. | 0 | (28) | (26) | ||
Unrecognized Tax Benefits, Ending Balance | 672 | 674 | 2,131 | ||
Unrecognized tax benefits that would affect effective tax rate if realized | 354 | 386 | 688 | ||
Income tax expense (interest) and penalties from uncertain tax positions | (25) | (55) | $ 17 | ||
Accrued income tax for interest and penalties | $ 56 | $ 81 | |||
Number of other countries in which HPE is subject to income taxes | country | 85 | ||||
Likelihood of conclusion period for certain federal, foreign and state tax issues | 12 months | ||||
Undistributed earnings from non-U.S. operations | $ 9,400 | ||||
Subsequent Event | |||||
Decreases: | |||||
Income Tax Examination, Estimate of Possible Loss | $ 904 |
Taxes on Earnings - Components
Taxes on Earnings - Components of Deferred Tax Assets and Deferred Tax Liabilities (Details) - USD ($) $ in Millions | Oct. 31, 2023 | Oct. 31, 2022 |
Deferred tax assets: | ||
Loss and credit carryforwards | $ 5,802 | $ 7,222 |
Inventory valuation | 90 | 87 |
Intercompany prepayments | 325 | 321 |
Warranty | 49 | 61 |
Employee and retiree benefits | 184 | 247 |
Restructuring | 52 | 55 |
Deferred revenue | 658 | 601 |
Intangible assets | 107 | 113 |
Capitalized R&D | 44 | 0 |
Lease liabilities | 209 | 185 |
Other | 196 | 269 |
Total deferred tax assets | 7,716 | 9,161 |
Valuation allowance | (5,294) | (6,817) |
Total deferred tax assets net of valuation allowance | 2,422 | 2,344 |
Deferred tax liabilities: | ||
Unremitted earnings of foreign subsidiaries | (190) | (170) |
ROU assets | (192) | (167) |
Fixed assets | (102) | (200) |
Total deferred tax liabilities | (484) | (537) |
Deferred tax assets net of deferred tax liabilities | $ 1,938 | $ 1,807 |
Taxes on Earnings - Deferred Ta
Taxes on Earnings - Deferred Tax Assets and Liabilities included in Condensed Consolidated Balance Sheets (Details) - USD ($) $ in Millions | Oct. 31, 2023 | Oct. 31, 2022 |
Significant components of deferred tax assets and deferred tax liabilities | ||
Deferred tax assets | $ 2,264 | $ 2,127 |
Deferred tax liabilities | (326) | (320) |
Deferred tax assets net of deferred tax liabilities | 1,938 | 1,807 |
Operating loss carryforwards | ||
Adjustment to reduce deferred tax asset | 52 | 55 |
Valuation allowance on deferred tax assets | 5,294 | $ 6,817 |
State | ||
Operating loss carryforwards | ||
Operating loss carryforwards | 3,100 | |
Capital loss carryforwards | 5,600 | |
State | Operating loss carryforwards | ||
Operating loss carryforwards | ||
Valuation allowance on deferred tax assets | 147 | |
State | Capital loss carryforwards | ||
Operating loss carryforwards | ||
Valuation allowance on deferred tax assets | 7 | |
Foreign | ||
Operating loss carryforwards | ||
Operating loss carryforwards | 20,200 | |
Capital loss carryforwards | 85 | |
Foreign | Operating loss carryforwards | ||
Operating loss carryforwards | ||
Valuation allowance on deferred tax assets | 3,900 | |
Foreign | Capital loss carryforwards | ||
Operating loss carryforwards | ||
Valuation allowance on deferred tax assets | 25 | |
Federal | ||
Operating loss carryforwards | ||
Operating loss carryforwards | 386 | |
Capital loss carryforwards | $ 13 |
Taxes on Earnings - Schedule of
Taxes on Earnings - Schedule of Tax Credit Carryforwards and Allowances (Details) $ in Millions | 12 Months Ended |
Oct. 31, 2023 USD ($) | |
Carryforward | |
U.S. foreign tax credits | $ 904 |
U.S. research and development and other credits | 215 |
Tax credits in state and foreign jurisdictions | 164 |
Balance at end of year | 1,283 |
Valuation Allowance | |
U.S. foreign tax credits | (875) |
U.S. research and development and other credits | 0 |
Tax credits in state and foreign jurisdictions | (114) |
Balance at end of year | (989) |
Decrease in valuation allowances | $ 1,500 |
Balance Sheet Details - Schedul
Balance Sheet Details - Schedule of Cash and Cash Equivalents (Details) - USD ($) $ in Millions | Oct. 31, 2023 | Oct. 31, 2022 | Oct. 31, 2021 | Oct. 31, 2020 |
Balance Sheet Related Disclosures [Abstract] | ||||
Cash and cash equivalents | $ 4,270 | $ 4,163 | ||
Restricted cash | 311 | 600 | ||
Total | $ 4,581 | $ 4,763 | $ 4,332 | $ 4,621 |
Balance Sheet Details - Account
Balance Sheet Details - Accounts Receivable, Net (Details) - USD ($) $ in Millions | Oct. 31, 2023 | Oct. 31, 2022 | Oct. 31, 2021 | Oct. 31, 2020 |
Balance Sheet Related Disclosures [Abstract] | ||||
Accounts receivable | $ 3,254 | $ 3,881 | ||
Unbilled receivable | 264 | 245 | ||
Allowances | (37) | (25) | $ (23) | $ (46) |
Total | $ 3,481 | $ 4,101 |
Balance Sheet Details - Allowan
Balance Sheet Details - Allowance for Doubtful Accounts (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2023 | Oct. 31, 2022 | Oct. 31, 2021 | |
Accounts Receivable, Allowance for Credit Loss | |||
Balance at beginning of year | $ 25 | $ 23 | $ 46 |
Provision for credit losses | 29 | 25 | 11 |
Adjustments to existing allowances, including write offs | (17) | (23) | (34) |
Balance at end of year | $ 37 | $ 25 | $ 23 |
Balance Sheet Details - Revolvi
Balance Sheet Details - Revolving Short-Term Financing Receivable (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Oct. 31, 2023 | Oct. 31, 2022 | Oct. 31, 2021 | ||
Receivables Sold but Not Collected from Third Party Roll Forward | ||||
Balance at beginning of period | [1] | $ 163 | $ 336 | $ 122 |
Trade receivables sold | 4,097 | 4,130 | 4,190 | |
Cash receipts | (4,185) | (4,292) | (3,975) | |
Foreign currency and other | 8 | (11) | (1) | |
Balance at end of period | [1] | $ 83 | $ 163 | $ 336 |
[1]Beginning and ending balances represent amounts for trade receivables sold but not yet collected. |
Balance Sheet Details - Invento
Balance Sheet Details - Inventory (Details) - USD ($) $ in Millions | Oct. 31, 2023 | Oct. 31, 2022 |
Balance Sheet Related Disclosures [Abstract] | ||
Purchased parts and fabricated assemblies | $ 2,940 | $ 2,974 |
Finished goods | 1,667 | 2,187 |
Total | $ 4,607 | $ 5,161 |
Balance Sheet Details - Propert
Balance Sheet Details - Property, Plant and Equipment (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Oct. 31, 2023 | Oct. 31, 2022 | Oct. 31, 2021 | ||
Property, Plant and Equipment, Net | ||||
Gross property, plant and equipment | $ 11,969 | $ 11,306 | ||
Accumulated depreciation | (5,980) | (5,522) | ||
Property, plant and equipment, net | [1] | 5,989 | 5,784 | |
Internal use software | 606 | 534 | ||
Depreciation expense | 2,300 | 2,200 | $ 2,200 | |
Land | ||||
Property, Plant and Equipment, Net | ||||
Gross property, plant and equipment | 66 | 74 | ||
Buildings and leasehold improvements | ||||
Property, Plant and Equipment, Net | ||||
Gross property, plant and equipment | 1,521 | 1,503 | ||
Machinery and equipment, including equipment held for lease | ||||
Property, Plant and Equipment, Net | ||||
Gross property, plant and equipment | $ 10,382 | $ 9,729 | ||
[1]This balance includes $606 million and $534 million of internal use software, net as of October 31, 2023 and 2022, respectively. |
Balance Sheet Details - Long-Te
Balance Sheet Details - Long-Term Financing Receivables and Other Assets (Details) - USD ($) $ in Millions | Oct. 31, 2023 | Oct. 31, 2022 |
Balance Sheet Related Disclosures [Abstract] | ||
Financing receivables, net | $ 5,028 | $ 4,512 |
Deferred tax assets | 2,264 | 2,127 |
Prepaid pension | 1,313 | 1,287 |
ROU Assets | 980 | 854 |
Other | 1,792 | 1,757 |
Total | $ 11,377 | $ 10,537 |
Balance Sheet Details - Other A
Balance Sheet Details - Other Accrued Liabilities (Details) - USD ($) $ in Millions | Oct. 31, 2023 | Oct. 31, 2022 |
Balance Sheet Related Disclosures [Abstract] | ||
Sales and marketing programs | $ 1,070 | $ 1,052 |
Value-added and property taxes | 786 | 902 |
Collateral payable | 207 | 508 |
Operating lease liabilities | 194 | 168 |
Warranty | 167 | 192 |
Contract manufacturer liabilities | 71 | 332 |
Other | 1,666 | 1,471 |
Total | $ 4,161 | $ 4,625 |
Balance Sheet Details - Other N
Balance Sheet Details - Other Non-Current Liabilities (Details) - USD ($) $ in Millions | Oct. 31, 2023 | Oct. 31, 2022 |
Balance Sheet Related Disclosures [Abstract] | ||
Deferred revenue | $ 3,281 | $ 2,955 |
Operating lease liabilities | 966 | 851 |
Pension, post-retirement, and post-employment | 841 | 944 |
Deferred tax liabilities | 326 | 320 |
Taxes on earnings | 233 | 271 |
Other | 899 | 846 |
Total | 6,546 | 6,187 |
Contract with customer, liability, current | $ 3,600 | $ 3,400 |
Balance Sheet Details - Narrati
Balance Sheet Details - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2023 | Oct. 31, 2022 | Oct. 31, 2021 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Deferred revenue | $ 3,658 | $ 3,451 | |
Deferred revenue | 3,281 | 2,955 | |
Unearned revenue recognized | 3,400 | ||
Contract liabilities | 6,900 | ||
Current portion of capitalized costs | 86 | 76 | |
Noncurrent portion of capitalized costs | 138 | 124 | |
Amortization of capitalized costs to obtain a contract | 94 | 83 | |
Notes payable and short-term borrowings | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Deferred revenue | $ 80 | $ 88 | $ 65 |
Balance Sheet Details - Remaini
Balance Sheet Details - Remaining Performance Obligation (Details) - Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-11-01 | Oct. 31, 2023 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Unsatisfied performance obligation expected to be recognized over the year | 49% |
Expected timing of satisfaction | 12 months |
Accounting for Leases as a Le_5
Accounting for Leases as a Lessee - Operating Lease Cost (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2023 | Oct. 31, 2022 | Oct. 31, 2021 | |
Leases [Abstract] | |||
Operating lease cost | $ 200 | $ 197 | $ 207 |
Finance lease cost | 4 | 5 | 5 |
Sublease rental income | (23) | (27) | (35) |
Total lease cost | $ 181 | $ 175 | $ 177 |
Accounting for Leases as a Le_6
Accounting for Leases as a Lessee - Leases Included in the Consolidated Balance Sheets (Details) - USD ($) $ in Millions | Oct. 31, 2023 | Oct. 31, 2022 |
Operating Leases | ||
ROU Assets | $ 980 | $ 854 |
Operating lease liabilities – current | 194 | 168 |
Operating lease liabilities – non-current | 966 | 851 |
Total operating lease liabilities | 1,160 | 1,019 |
Finance Leases | ||
Gross finance lease ROU assets | 26 | 32 |
Less: Accumulated depreciation | (14) | (11) |
Net finance lease ROU assets | 12 | 21 |
Finance lease liabilities – current | 5 | 5 |
Finance lease liabilities – non-current | 38 | 43 |
Total finance lease liabilities | 43 | 48 |
Total ROU assets | 992 | 875 |
Total lease liabilities | $ 1,203 | $ 1,067 |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Accounts payable | Accounts payable |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Other accrued liabilities | Other accrued liabilities |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Other non-current liabilities | Other non-current liabilities |
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Property, plant and equipment, net | Property, plant and equipment, net |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List] | Notes payable and short-term borrowings | Notes payable and short-term borrowings |
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Long-term debt | Long-term debt |
Accounting for Leases as a Le_7
Accounting for Leases as a Lessee - Additional Lease Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2023 | Oct. 31, 2022 | Oct. 31, 2021 | |
Operating Leases | |||
Weighted-average remaining lease term (in years) | 7 years 2 months 12 days | 7 years 9 months 18 days | |
Weighted-average discount rate | 3.80% | 3.20% | |
Finance Leases | |||
Weighted-average remaining lease term (in years) | 6 years 6 months | 7 years 6 months | |
Weighted-average discount rate | 3.50% | 3.50% | |
Cash Flow Statement Activity | |||
Cash outflows from operating leases | $ 219 | $ 214 | $ 220 |
ROU assets obtained in exchange for new operating lease liabilities | $ 251 | $ 195 | $ 248 |
Accounting for Leases as a Le_8
Accounting for Leases as a Lessee - Future Minimum Lease Commitments (Details) - USD ($) $ in Millions | Oct. 31, 2023 | Oct. 31, 2022 |
Operating Leases | ||
2024 | $ 234 | |
2025 | 215 | |
2026 | 191 | |
2027 | 176 | |
2028 | 151 | |
Thereafter | 365 | |
Total future lease payments | 1,332 | |
Less: imputed interest | (172) | |
Total operating lease liabilities | 1,160 | $ 1,019 |
Finance Leases | ||
2024 | 7 | |
2025 | 7 | |
2026 | 7 | |
2027 | 7 | |
2028 | 8 | |
Thereafter | 12 | |
Total future lease payments | 48 | |
Less: imputed interest | (5) | |
Total finance lease liabilities | $ 43 | $ 48 |
Accounting for Leases as a Le_9
Accounting for Leases as a Lessee - Narrative (Details) $ in Millions | 12 Months Ended |
Oct. 31, 2023 USD ($) | |
Lessee, Lease, Description [Line Items] | |
Net gain from sale and leaseback transaction | $ 85 |
Amount of operating leases that have not yet commenced | $ 516 |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Term of operating leases not yet commenced | 5 years |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Term of operating leases not yet commenced | 10 years |
Accounting for Leases as a L_10
Accounting for Leases as a Lessor - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | |
Oct. 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 | |
Sold | $ 237 | $ 183 |
Long-term financing receivables and other assets | ||
Lessor, Lease, Description [Line Items] | ||
Amount transferred via securitization | 800 | 1,600 |
Leased Equipment | ||
Lessor, Lease, Description [Line Items] | ||
Amount transferred via securitization | $ 700 | $ 1,200 |
Accounting for Leases as a L_11
Accounting for Leases as a Lessor - Components of Financing Receivables (Details) - USD ($) $ in Millions | Oct. 31, 2023 | Oct. 31, 2022 | Oct. 31, 2021 | Oct. 31, 2020 |
Leases [Abstract] | ||||
Minimum lease payments receivable | $ 9,363 | $ 8,686 | ||
Unguaranteed residual value | 438 | 380 | ||
Unearned income | (987) | (707) | ||
Financing receivables, gross | 8,814 | 8,359 | ||
Allowance for credit losses | (243) | (325) | $ (228) | $ (154) |
Financing receivables, net | 8,571 | 8,034 | ||
Less: current portion | (3,543) | (3,522) | ||
Amounts due after one year, net | $ 5,028 | $ 4,512 |
Accounting for Leases as a L_12
Accounting for Leases as a Lessor - Finance Lease Receivable Maturity (Details) - USD ($) $ in Millions | Oct. 31, 2023 | Oct. 31, 2022 |
Leases [Abstract] | ||
2024 | $ 4,058 | |
2025 | 2,512 | |
2026 | 1,612 | |
2027 | 819 | |
2028 | 278 | |
Thereafter | 84 | |
Total undiscounted cash flows | 9,363 | $ 8,686 |
Present value of lease payments (recognized as finance receivables) | 8,376 | |
Lease receivable, undiscounted excess amount | $ 987 |
Accounting for Leases as a L_13
Accounting for Leases as a Lessor - Credit Risk Profile of Financing Receivables (Details) - USD ($) $ in Millions | Oct. 31, 2023 | Oct. 31, 2022 |
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Financing receivables, gross | $ 8,814 | $ 8,359 |
Low | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Current fiscal year | 2,100 | 1,987 |
Year one | 1,681 | 1,338 |
Year two | 868 | 756 |
Year three | 336 | 328 |
Year four and prior | 155 | 143 |
Financing receivables, gross | 5,140 | 4,552 |
Moderate | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Current fiscal year | 1,196 | 1,277 |
Year one | 1,052 | 1,071 |
Year two | 645 | 571 |
Year three | 285 | 336 |
Year four and prior | 223 | 234 |
Financing receivables, gross | 3,401 | 3,489 |
High | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Current fiscal year | 31 | 44 |
Year one | 51 | 42 |
Year two | 57 | 67 |
Year three | 35 | 69 |
Year four and prior | 99 | 96 |
Financing receivables, gross | $ 273 | $ 318 |
Accounting for Leases as a L_14
Accounting for Leases as a Lessor - Allowance for Doubtful Accounts for Financing Receivables (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Oct. 31, 2023 | Oct. 31, 2022 | Oct. 31, 2021 | ||
Allowance for doubtful accounts | ||||
Financing receivable, allowance for credit loss, beginning balance | $ 325 | $ 228 | $ 154 | |
Provision for credit losses | 58 | 177 | [1] | 61 |
Adjustment to the existing allowance | 0 | (10) | 19 | |
Write-offs | (140) | (70) | (34) | |
Financing receivable, allowance for credit loss, ending balance | 243 | 325 | 228 | |
Russia and Belarus | ||||
Allowance for doubtful accounts | ||||
Provision for credit losses | 99 | |||
Cumulative Effect, Period of Adoption, Adjustment | ||||
Allowance for doubtful accounts | ||||
Financing receivable, allowance for credit loss, beginning balance | $ 0 | 0 | 28 | |
Financing receivable, allowance for credit loss, ending balance | $ 0 | $ 0 | ||
[1]Fiscal 2022 included a provision of $99 million related to expected credit losses due to the Company's exit from its Russia and Belarus businesses. |
Accounting for Leases as a L_15
Accounting for Leases as a Lessor - Summary of Aging and Non-accrual Status of Gross Financing Receivables (Details) - USD ($) $ in Millions | Oct. 31, 2023 | Oct. 31, 2022 | |
Financing Receivable, Past Due [Line Items] | |||
Total gross financing receivables | $ 8,814 | $ 8,359 | |
Gross financing receivables on non-accrual status | [1] | 227 | 290 |
Gross financing receivables 90 days past due and still accruing interest | [1] | 81 | 72 |
Billed Revenues | Current 1-30 days | |||
Financing Receivable, Past Due [Line Items] | |||
Total gross financing receivables | [2] | 320 | 372 |
Billed Revenues | Past due 31-60 days | |||
Financing Receivable, Past Due [Line Items] | |||
Total gross financing receivables | [2] | 30 | 32 |
Billed Revenues | Past due 61-90 days | |||
Financing Receivable, Past Due [Line Items] | |||
Total gross financing receivables | [2] | 13 | 19 |
Billed Revenues | Past due > 90 days | |||
Financing Receivable, Past Due [Line Items] | |||
Total gross financing receivables | [2] | 100 | 121 |
Unbilled Revenues | |||
Financing Receivable, Past Due [Line Items] | |||
Total gross financing receivables | $ 8,351 | $ 7,815 | |
[1] Includes billed operating lease receivables and billed and unbilled sales-type and direct-financing lease receivables. Includes billed operating lease receivables and billed sales-type and direct-financing lease receivables. |
Accounting for Leases as a L_16
Accounting for Leases as a Lessor - Operating Lease Assets Included in Machinery and Equipment (Details) - USD ($) $ in Millions | Oct. 31, 2023 | Oct. 31, 2022 |
Leases [Abstract] | ||
Equipment leased to customers | $ 7,019 | $ 6,879 |
Accumulated depreciation | (2,919) | (2,776) |
Total | $ 4,100 | $ 4,103 |
Accounting for Leases as a L_17
Accounting for Leases as a Lessor - Operating Lease Payments Maturity (Details) $ in Millions | Oct. 31, 2023 USD ($) |
Leases [Abstract] | |
2024 | $ 1,820 |
2025 | 1,174 |
2026 | 451 |
2027 | 59 |
2028 | 4 |
Thereafter | 0 |
Total | $ 3,508 |
Accounting for Leases as a L_18
Accounting for Leases as a Lessor - Lessor Activity Included in Income Statement (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2023 | Oct. 31, 2022 | Oct. 31, 2021 | |
Leases [Abstract] | |||
Interest income from sales-type leases and direct financing leases | $ 547 | $ 483 | $ 494 |
Lease income from operating leases | 2,407 | 2,296 | 2,383 |
Total lease income | $ 2,954 | $ 2,779 | $ 2,877 |
Operating Lease, Lease Income, Statement of Income or Comprehensive Income [Extensible Enumeration] | Revenues | Revenues | Revenues |
Accounting for Leases as a L_19
Accounting for Leases as a Lessor - Assets and Liabilities of VIE (Details) - Variable Interest Entity, Primary Beneficiary - USD ($) $ in Millions | Oct. 31, 2023 | Oct. 31, 2022 |
Variable Interest Entity [Line Items] | ||
Other current assets | $ 145 | $ 203 |
Financing receivables | ||
Short-term | 764 | 838 |
Long-term | 983 | 1,085 |
Property, plant and equipment, net | 1,214 | 1,323 |
Liabilities held by VIE: | ||
Notes payable and short-term borrowings, net of unamortized debt issuance costs | 1,392 | 1,510 |
Long-term debt, net of unamortized debt issuance costs | $ 1,082 | $ 1,415 |
Acquisitions - Aggregate Purcha
Acquisitions - Aggregate Purchase Price Allocation (Details) - USD ($) $ in Millions | Oct. 31, 2023 | Oct. 31, 2022 | Oct. 31, 2021 | |
Business Acquisition, Contingent Consideration [Line Items] | ||||
Goodwill | [1] | $ 17,988 | $ 17,403 | |
2021 Acquisitions | ||||
Business Acquisition, Contingent Consideration [Line Items] | ||||
Goodwill | $ 302 | |||
Net tangible liabilities assumed | 11 | |||
Total fair value consideration | 568 | |||
2021 Acquisitions | Intangible Assets | ||||
Business Acquisition, Contingent Consideration [Line Items] | ||||
Amortizable intangible assets | $ 277 | |||
Acquisitions in 2023 | ||||
Business Acquisition, Contingent Consideration [Line Items] | ||||
Goodwill | 585 | |||
Net tangible liabilities assumed | 46 | |||
Total fair value consideration | 840 | |||
Acquisitions in 2023 | Intangible Assets | ||||
Business Acquisition, Contingent Consideration [Line Items] | ||||
Amortizable intangible assets | $ 209 | |||
[1] Goodwill is net of accumulated impairment losses of $1.9 billion. Of this amount, $1.7 billion relates to HPC & AI of which $815 million was recorded during the fourth quarter of fiscal 2022. The Software reporting unit within Corporate Investments and Other, has an accumulated impairment loss of $90 million which was also recorded during the fourth quarter of fiscal 2022. |
Acquisitions - Narrative (Detai
Acquisitions - Narrative (Details) $ in Millions | 12 Months Ended | ||||||
May 02, 2023 USD ($) | Mar. 15, 2023 USD ($) | Aug. 31, 2021 USD ($) | Oct. 31, 2023 USD ($) businessAcquired | Oct. 31, 2021 businessAcquired | Oct. 31, 2022 USD ($) | ||
Acquisitions: | |||||||
Number of acquisitions | businessAcquired | 5 | 4 | |||||
Goodwill | [1] | $ 17,988 | $ 17,403 | ||||
OpsRamp | |||||||
Acquisitions: | |||||||
Total fair value of consideration | $ 307 | ||||||
Goodwill | 217 | ||||||
Amortizable intangible assets | $ 84 | ||||||
Weighted-average useful life | 5 years | ||||||
Axis Security | |||||||
Acquisitions: | |||||||
Total fair value of consideration | $ 412 | ||||||
Goodwill | 311 | ||||||
Amortizable intangible assets | $ 71 | ||||||
Weighted-average useful life | 5 years | ||||||
Zerto | |||||||
Acquisitions: | |||||||
Total fair value of consideration | $ 416 | ||||||
Goodwill | 214 | ||||||
Amortizable intangible assets | $ 212 | ||||||
Weighted-average useful life | 7 years | ||||||
[1] Goodwill is net of accumulated impairment losses of $1.9 billion. Of this amount, $1.7 billion relates to HPC & AI of which $815 million was recorded during the fourth quarter of fiscal 2022. The Software reporting unit within Corporate Investments and Other, has an accumulated impairment loss of $90 million which was also recorded during the fourth quarter of fiscal 2022. |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Carrying Value of Goodwill by Reportable Segment (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||||||
Nov. 01, 2022 | Oct. 31, 2022 | Oct. 31, 2023 | Oct. 31, 2022 | Oct. 31, 2021 | ||||
Goodwill | ||||||||
Balance at beginning of period | [1] | $ 17,403 | $ 17,403 | |||||
Impairment of goodwill | 0 | $ (905) | $ 0 | |||||
Goodwill from acquisitions | 585 | |||||||
Balance at end of period | [1] | $ 17,403 | 17,988 | 17,403 | ||||
Accumulated impairment loss | 1,900 | |||||||
Compute | ||||||||
Goodwill | ||||||||
Balance at beginning of period | [2] | 7,692 | 7,692 | |||||
Goodwill from acquisitions | 0 | |||||||
Balance at end of period | 7,692 | [2] | 7,692 | 7,692 | [2] | |||
Goodwill, transfers | 160 | |||||||
HPC & AI | ||||||||
Goodwill | ||||||||
Balance at beginning of period | [1] | 2,889 | 2,889 | |||||
Impairment of goodwill | (815) | |||||||
Goodwill from acquisitions | 15 | |||||||
Balance at end of period | [1] | 2,889 | 2,904 | 2,889 | ||||
Accumulated impairment loss | 1,700 | |||||||
Storage | ||||||||
Goodwill | ||||||||
Balance at beginning of period | [2] | 4,000 | 4,000 | |||||
Goodwill from acquisitions | 0 | |||||||
Balance at end of period | 4,000 | [2] | 4,000 | 4,000 | [2] | |||
Intelligent Edge | ||||||||
Goodwill | ||||||||
Balance at beginning of period | 2,555 | 2,555 | ||||||
Goodwill from acquisitions | 311 | |||||||
Balance at end of period | 2,555 | 2,866 | 2,555 | |||||
Financial Services | ||||||||
Goodwill | ||||||||
Balance at beginning of period | 144 | 144 | ||||||
Goodwill from acquisitions | 0 | |||||||
Balance at end of period | 144 | 144 | 144 | |||||
Corporate Investments and Other | ||||||||
Goodwill | ||||||||
Balance at beginning of period | [1] | $ 123 | 123 | |||||
Impairment of goodwill | (90) | |||||||
Goodwill from acquisitions | 259 | |||||||
Balance at end of period | [1] | $ 123 | $ 382 | $ 123 | ||||
[1] Goodwill is net of accumulated impairment losses of $1.9 billion. Of this amount, $1.7 billion relates to HPC & AI of which $815 million was recorded during the fourth quarter of fiscal 2022. The Software reporting unit within Corporate Investments and Other, has an accumulated impairment loss of $90 million which was also recorded during the fourth quarter of fiscal 2022. 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. |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Narrative (Details) $ in Millions | 3 Months Ended | 12 Months Ended | |||||
Oct. 31, 2022 USD ($) | Oct. 31, 2023 USD ($) segment | Oct. 31, 2022 USD ($) | Oct. 31, 2021 USD ($) | ||||
Goodwill | |||||||
Number of reporting units | segment | 5 | ||||||
Goodwill | [1] | $ 17,403 | $ 17,988 | $ 17,403 | |||
Impairment of goodwill | 0 | 905 | $ 0 | ||||
Finite-lived intangible assets, period decrease | 326 | ||||||
Finite-lived intangible assets acquired | 209 | ||||||
Acquisitions in 2023 | |||||||
Goodwill | |||||||
Goodwill | $ 585 | ||||||
Minimum | |||||||
Goodwill | |||||||
Percentage of fair value in excess of carrying amount | 5% | ||||||
Maximum | |||||||
Goodwill | |||||||
Percentage of fair value in excess of carrying amount | 218% | ||||||
Intangible Assets | Acquisitions in 2023 | |||||||
Goodwill | |||||||
Amortizable intangible assets | $ 209 | ||||||
Compute | |||||||
Goodwill | |||||||
Percentage of fair value in excess of carrying amount | 5% | ||||||
Goodwill | 7,692 | [2] | $ 7,692 | 7,692 | [2] | ||
HPC & AI | |||||||
Goodwill | |||||||
Percentage of fair value in excess of carrying amount | 12% | ||||||
Goodwill | [1] | 2,889 | $ 2,904 | 2,889 | |||
Impairment of goodwill | 815 | ||||||
Corporate Investments and Other | |||||||
Goodwill | |||||||
Goodwill | [1] | 123 | $ 382 | $ 123 | |||
Impairment of goodwill | $ 90 | ||||||
[1] Goodwill is net of accumulated impairment losses of $1.9 billion. Of this amount, $1.7 billion relates to HPC & AI of which $815 million was recorded during the fourth quarter of fiscal 2022. The Software reporting unit within Corporate Investments and Other, has an accumulated impairment loss of $90 million which was also recorded during the fourth quarter of fiscal 2022. 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"), $160 million of goodwill was reallocated from the Storage segment to the Compute segment as of the beginning of the period using a relative fair value approach. |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Intangible Assets (Details) - USD ($) $ in Millions | Oct. 31, 2023 | Oct. 31, 2022 |
Intangible assets | ||
Intangible assets, gross (excluding goodwill) | $ 1,665 | $ 1,782 |
Amortizable intangible assets, accumulated amortization | (1,011) | (1,049) |
Total | 654 | |
Intangible assets, net (excluding goodwill) | 654 | 733 |
Customer contracts, customer lists and distribution agreements | ||
Intangible assets | ||
Amortizable intangible assets, gross | 357 | 475 |
Amortizable intangible assets, accumulated amortization | (177) | (256) |
Total | $ 180 | 219 |
Finite-Lived Intangible Assets, Remaining Amortization Period | 5 years | |
Developed Technology Rights Patented And Unpatented Technology | ||
Intangible assets | ||
Amortizable intangible assets, gross | $ 1,162 | 1,163 |
Amortizable intangible assets, accumulated amortization | (711) | (695) |
Total | $ 451 | 468 |
Finite-Lived Intangible Assets, Remaining Amortization Period | 4 years | |
Trade name and trademarks | ||
Intangible assets | ||
Amortizable intangible assets, gross | $ 146 | 144 |
Amortizable intangible assets, accumulated amortization | (123) | (98) |
Total | $ 23 | $ 46 |
Finite-Lived Intangible Assets, Remaining Amortization Period | 1 year |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets - Estimated Future Amortization Expense of Intangible Assets (Details) $ in Millions | Oct. 31, 2023 USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2024 | $ 250 |
2025 | 137 |
2026 | 120 |
2027 | 86 |
2028 | 40 |
Thereafter | 21 |
Total | $ 654 |
Fair Value - Schedule of Assets
Fair Value - Schedule of Assets and Liabilities on a Recurring Basis (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Millions | Oct. 31, 2023 | Oct. 31, 2022 | |
Assets | |||
Assets, Fair Value Disclosure | $ 3,295 | $ 3,352 | |
Liabilities | |||
Liabilities, Fair Value Disclosure | 305 | 307 | |
Time deposits | |||
Assets | |||
Assets, Fair Value Disclosure | 905 | 1,516 | |
Money market funds | |||
Assets | |||
Assets, Fair Value Disclosure | 1,672 | 744 | |
Equity investments | |||
Assets | |||
Assets, Fair Value Disclosure | 135 | 126 | |
Foreign bonds | |||
Assets | |||
Assets, Fair Value Disclosure | 97 | 91 | |
Other debt securities(1) | |||
Assets | |||
Assets, Fair Value Disclosure | [1] | 22 | 33 |
Interest rate contracts | |||
Liabilities | |||
Liabilities, Fair Value Disclosure | 151 | 178 | |
Foreign exchange contracts | |||
Assets | |||
Assets, Fair Value Disclosure | 464 | 840 | |
Liabilities | |||
Liabilities, Fair Value Disclosure | 152 | 128 | |
Other derivatives | |||
Assets | |||
Assets, Fair Value Disclosure | 0 | 2 | |
Liabilities | |||
Liabilities, Fair Value Disclosure | 2 | 1 | |
Level 1 | |||
Assets | |||
Assets, Fair Value Disclosure | 1,673 | 744 | |
Liabilities | |||
Liabilities, Fair Value Disclosure | 0 | 0 | |
Level 1 | Time deposits | |||
Assets | |||
Assets, Fair Value Disclosure | 0 | 0 | |
Level 1 | Money market funds | |||
Assets | |||
Assets, Fair Value Disclosure | 1,672 | 744 | |
Level 1 | Equity investments | |||
Assets | |||
Assets, Fair Value Disclosure | 0 | 0 | |
Level 1 | Foreign bonds | |||
Assets | |||
Assets, Fair Value Disclosure | 1 | 0 | |
Level 1 | Other debt securities(1) | |||
Assets | |||
Assets, Fair Value Disclosure | 0 | 0 | |
Level 1 | Interest rate contracts | |||
Liabilities | |||
Liabilities, Fair Value Disclosure | 0 | 0 | |
Level 1 | Foreign exchange contracts | |||
Assets | |||
Assets, Fair Value Disclosure | 0 | 0 | |
Liabilities | |||
Liabilities, Fair Value Disclosure | 0 | 0 | |
Level 1 | Other derivatives | |||
Assets | |||
Assets, Fair Value Disclosure | 0 | 0 | |
Liabilities | |||
Liabilities, Fair Value Disclosure | 0 | 0 | |
Level 2 | |||
Assets | |||
Assets, Fair Value Disclosure | 1,464 | 2,449 | |
Liabilities | |||
Liabilities, Fair Value Disclosure | 305 | 307 | |
Level 2 | Time deposits | |||
Assets | |||
Assets, Fair Value Disclosure | 905 | 1,516 | |
Level 2 | Money market funds | |||
Assets | |||
Assets, Fair Value Disclosure | 0 | 0 | |
Level 2 | Equity investments | |||
Assets | |||
Assets, Fair Value Disclosure | 0 | 0 | |
Level 2 | Foreign bonds | |||
Assets | |||
Assets, Fair Value Disclosure | 95 | 91 | |
Level 2 | Other debt securities(1) | |||
Assets | |||
Assets, Fair Value Disclosure | 0 | 0 | |
Level 2 | Interest rate contracts | |||
Liabilities | |||
Liabilities, Fair Value Disclosure | 151 | 178 | |
Level 2 | Foreign exchange contracts | |||
Assets | |||
Assets, Fair Value Disclosure | 464 | 840 | |
Liabilities | |||
Liabilities, Fair Value Disclosure | 152 | 128 | |
Level 2 | Other derivatives | |||
Assets | |||
Assets, Fair Value Disclosure | 0 | 2 | |
Liabilities | |||
Liabilities, Fair Value Disclosure | 2 | 1 | |
Level 3 | |||
Assets | |||
Assets, Fair Value Disclosure | 158 | 159 | |
Liabilities | |||
Liabilities, Fair Value Disclosure | 0 | 0 | |
Level 3 | Time deposits | |||
Assets | |||
Assets, Fair Value Disclosure | 0 | 0 | |
Level 3 | Money market funds | |||
Assets | |||
Assets, Fair Value Disclosure | 0 | 0 | |
Level 3 | Equity investments | |||
Assets | |||
Assets, Fair Value Disclosure | 135 | 126 | |
Level 3 | Foreign bonds | |||
Assets | |||
Assets, Fair Value Disclosure | 1 | 0 | |
Level 3 | Other debt securities(1) | |||
Assets | |||
Assets, Fair Value Disclosure | 22 | 33 | |
Level 3 | Interest rate contracts | |||
Liabilities | |||
Liabilities, Fair Value Disclosure | 0 | 0 | |
Level 3 | Foreign exchange contracts | |||
Assets | |||
Assets, Fair Value Disclosure | 0 | 0 | |
Liabilities | |||
Liabilities, Fair Value Disclosure | 0 | 0 | |
Level 3 | Other derivatives | |||
Assets | |||
Assets, Fair Value Disclosure | 0 | 0 | |
Liabilities | |||
Liabilities, Fair Value Disclosure | $ 0 | $ 0 | |
[1] Available-for-sale debt securities with carrying values that approximate fair value. |
Fair Value - Narrative (Details
Fair Value - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Oct. 31, 2022 | Oct. 31, 2023 | Oct. 31, 2022 | Oct. 31, 2021 | |
Financial assets and liabilities measured at fair value on a recurring basis | ||||
Fair value, short- and long-term debt | $ 12,200 | $ 12,200 | $ 12,200 | |
Carrying value, short- and long-term debt | $ 12,500 | $ 12,400 | $ 12,500 | |
Investment, Type [Extensible Enumeration] | Equity Securities In Privately Held Companies | Equity Securities In Privately Held Companies | Equity Securities In Privately Held Companies | |
Impairment of goodwill | $ 0 | $ 905 | $ 0 | |
Alternative Investment, Measurement Alternative | ||||
Financial assets and liabilities measured at fair value on a recurring basis | ||||
Unrealized gains (losses) on equity securities | (45) | (17) | ||
Equity securities without readily determinable fair value, impairment loss, amount | 50 | 24 | 0 | |
Equity securities without readily determinable fair value, upward price adjustment, cumulative amount | 33 | |||
Equity securities without readily determinable fair value, downward price adjustment, cumulative amount | 72 | |||
Interest and other, net | ||||
Financial assets and liabilities measured at fair value on a recurring basis | ||||
Recognized gain from equity investments without readily determinable fair value | 64 | |||
HPC & AI & Software & Corporate Investments | ||||
Financial assets and liabilities measured at fair value on a recurring basis | ||||
Impairment of goodwill | $ 905 | |||
Level 3 | ||||
Financial assets and liabilities measured at fair value on a recurring basis | ||||
Impairment of assets under operating lease | $ 18 | $ 5 | $ 89 |
Financial Instruments - Cash Eq
Financial Instruments - Cash Equivalents and Available-for-Sale Investments (Details) - USD ($) $ in Millions | Oct. 31, 2023 | Oct. 31, 2022 |
Cost | ||
Cash and Cash Equivalents [Line Items] | ||
Cash Equivalents, at Carrying Value | $ 2,577 | $ 2,260 |
Cost | Time deposits | ||
Cash and Cash Equivalents [Line Items] | ||
Cash Equivalents, at Carrying Value | 905 | 1,516 |
Cost | Money market funds | ||
Cash and Cash Equivalents [Line Items] | ||
Cash Equivalents, at Carrying Value | 1,672 | 744 |
Fair Value | ||
Cash and Cash Equivalents [Line Items] | ||
Cash Equivalents, at Carrying Value | 2,577 | 2,260 |
Fair Value | Time deposits | ||
Cash and Cash Equivalents [Line Items] | ||
Cash Equivalents, at Carrying Value | 905 | 1,516 |
Fair Value | Money market funds | ||
Cash and Cash Equivalents [Line Items] | ||
Cash Equivalents, at Carrying Value | 1,672 | 744 |
Debt securities, amortized cost | 119 | 125 |
Gross Unrealized Gains/(Losses) | 0 | (1) |
Debt Securities, Available-for-Sale, Total | 119 | 124 |
Total cash equivalents and available-for sale investments, cost basis | 2,696 | 2,385 |
Cash Equivalents and Available For Sale Securities, Fair Value | 2,696 | 2,384 |
Foreign bonds | ||
Cash and Cash Equivalents [Line Items] | ||
Debt securities, amortized cost | 100 | 93 |
Gross Unrealized Gains/(Losses) | (3) | (2) |
Debt Securities, Available-for-Sale, Total | 97 | 91 |
Other debt securities(1) | ||
Cash and Cash Equivalents [Line Items] | ||
Debt securities, amortized cost | 19 | 32 |
Gross Unrealized Gains/(Losses) | 3 | 1 |
Debt Securities, Available-for-Sale, Total | $ 22 | $ 33 |
Financial Instruments - Narrati
Financial Instruments - Narrative (Details) $ in Millions | 12 Months Ended | ||
Oct. 31, 2023 USD ($) businessDay | Oct. 31, 2022 USD ($) businessDay | Oct. 31, 2021 USD ($) | |
Investments, All Other Investments [Abstract] | |||
Interest income | $ 127 | $ 39 | $ 18 |
Summary of Investment Holdings [Line Items] | |||
Interest income | $ 127 | $ 39 | 18 |
Investment, Type [Extensible Enumeration] | Equity Securities In Privately Held Companies | Equity Securities In Privately Held Companies | |
Proceeds from maturities and sales of investments | $ 9 | $ 262 | 15 |
General collateral posting period | businessDay | 2 | 2 | |
Collateralized arrangements in net liability position | $ 108 | $ 106 | |
Expected amount of AOCI to be reclassified in the next 12 months | 71 | ||
Interest and other, net | |||
Summary of Investment Holdings [Line Items] | |||
Recognized gain from equity investments without readily determinable fair value | 64 | ||
Alternative Investment, Measurement Alternative | |||
Summary of Investment Holdings [Line Items] | |||
Investment amount | 145 | 175 | |
Unrealized gains (losses) on equity securities | 45 | 17 | |
Equity securities without readily determinable fair value, impairment loss, amount | 50 | 24 | $ 0 |
Alternative Investment, Fair Value Measurement | |||
Summary of Investment Holdings [Line Items] | |||
Investment amount | 135 | 126 | |
Unrealized gains (losses) on equity securities | $ 9 | 86 | |
Proceeds from maturities and sales of investments | $ 165 | ||
Cash flow hedges: | |||
Summary of Investment Holdings [Line Items] | |||
Maturity period of foreign currency cash flow hedges | 12 months | ||
Cash flow hedges: | Maximum | |||
Summary of Investment Holdings [Line Items] | |||
Duration of lease term for which lease-related forward contracts and intercompany lease loan forward contracts can be extended | 5 years |
Financial Instruments - Contrac
Financial Instruments - Contractual Maturities of Investments in Available-for-Sale Debt Securities (Details) - USD ($) $ in Millions | Oct. 31, 2023 | Oct. 31, 2022 |
Amortized Cost | ||
Due in one year | $ 3 | |
Due in one to five years | 5 | |
Due in more than five years | 111 | |
Debt securities, amortized cost | 119 | $ 125 |
Fair Value | ||
Due in one year | 3 | |
Due in one to five years | 5 | |
Due in more than five years | 111 | |
Debt Securities, Available-for-Sale, Total | $ 119 | $ 124 |
Financial Instruments - Gross N
Financial Instruments - Gross Notional and Fair Value of Instruments in the Balance Sheets (Details) - USD ($) $ in Millions | Oct. 31, 2023 | Oct. 31, 2022 |
Derivatives, Fair Value | ||
Derivative, Notional Amount | $ 19,605 | $ 19,920 |
Other Current Assets | ||
Derivatives, Fair Value | ||
Derivative asset, fair value | 311 | 518 |
Long-Term Financing Receivables and Other Assets | ||
Derivatives, Fair Value | ||
Derivative asset, fair value | 153 | 324 |
Other Accrued Liabilities | ||
Derivatives, Fair Value | ||
Derivative liability, fair value | 92 | 91 |
Long-Term Other Liabilities | ||
Derivatives, Fair Value | ||
Derivative liability, fair value | 213 | 216 |
Derivatives designated as hedging instruments | ||
Derivatives, Fair Value | ||
Derivative, Notional Amount | 12,719 | 12,045 |
Derivatives designated as hedging instruments | Other Current Assets | ||
Derivatives, Fair Value | ||
Derivative asset, fair value | 291 | 480 |
Derivatives designated as hedging instruments | Long-Term Financing Receivables and Other Assets | ||
Derivatives, Fair Value | ||
Derivative asset, fair value | 150 | 320 |
Derivatives designated as hedging instruments | Other Accrued Liabilities | ||
Derivatives, Fair Value | ||
Derivative liability, fair value | 67 | 37 |
Derivatives designated as hedging instruments | Long-Term Other Liabilities | ||
Derivatives, Fair Value | ||
Derivative liability, fair value | 197 | 204 |
Derivatives designated as hedging instruments | Fair value hedges: | Interest rate contracts | ||
Derivatives, Fair Value | ||
Derivative, Notional Amount | 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 | 151 | 178 |
Derivatives designated as hedging instruments | Cash flow hedges: | Foreign exchange contracts | ||
Derivatives, Fair Value | ||
Derivative, Notional Amount | 8,247 | 7,662 |
Derivatives designated as hedging instruments | Cash flow hedges: | Foreign exchange contracts | Other Current Assets | ||
Derivatives, Fair Value | ||
Derivative asset, fair value | 252 | 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 | 104 | 246 |
Derivatives designated as hedging instruments | Cash flow hedges: | Foreign exchange contracts | Other Accrued Liabilities | ||
Derivatives, Fair Value | ||
Derivative liability, fair value | 33 | 25 |
Derivatives designated as hedging instruments | Cash flow hedges: | Foreign exchange contracts | Long-Term Other Liabilities | ||
Derivatives, Fair Value | ||
Derivative liability, fair value | 23 | 13 |
Derivatives designated as hedging instruments | Net Investment Hedging [Member] | Foreign exchange contracts | ||
Derivatives, Fair Value | ||
Derivative, Notional Amount | 1,972 | 1,883 |
Derivatives designated as hedging instruments | Net Investment Hedging [Member] | Foreign exchange contracts | Other Current Assets | ||
Derivatives, Fair Value | ||
Derivative asset, fair value | 39 | 60 |
Derivatives designated as hedging instruments | Net Investment Hedging [Member] | Foreign exchange contracts | Long-Term Financing Receivables and Other Assets | ||
Derivatives, Fair Value | ||
Derivative asset, fair value | 46 | 74 |
Derivatives designated as hedging instruments | Net Investment Hedging [Member] | Foreign exchange contracts | Other Accrued Liabilities | ||
Derivatives, Fair Value | ||
Derivative liability, fair value | 34 | 12 |
Derivatives designated as hedging instruments | Net Investment Hedging [Member] | Foreign exchange contracts | Long-Term Other Liabilities | ||
Derivatives, Fair Value | ||
Derivative liability, fair value | 23 | 13 |
Derivatives not designated as hedging instruments | ||
Derivatives, Fair Value | ||
Derivative, Notional Amount | 6,886 | 7,875 |
Derivatives not designated as hedging instruments | Other Current Assets | ||
Derivatives, Fair Value | ||
Derivative asset, fair value | 20 | 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 | 25 | 54 |
Derivatives not designated as hedging instruments | Long-Term Other Liabilities | ||
Derivatives, Fair Value | ||
Derivative liability, fair value | 16 | 12 |
Derivatives not designated as hedging instruments | Foreign exchange contracts | ||
Derivatives, Fair Value | ||
Derivative, Notional Amount | 6,786 | 7,780 |
Derivatives not designated as hedging instruments | Foreign exchange contracts | Other Current Assets | ||
Derivatives, Fair Value | ||
Derivative asset, fair value | 20 | 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 | 23 | 53 |
Derivatives not designated as hedging instruments | Foreign exchange contracts | Long-Term Other Liabilities | ||
Derivatives, Fair Value | ||
Derivative liability, fair value | 16 | 12 |
Derivatives not designated as hedging instruments | Other derivatives | ||
Derivatives, Fair Value | ||
Derivative, Notional Amount | 100 | 95 |
Derivatives not designated as hedging instruments | Other derivatives | Other Current Assets | ||
Derivatives, Fair Value | ||
Derivative asset, fair value | 0 | 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 | 2 | 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 | Oct. 31, 2023 USD ($) businessDay | Oct. 31, 2022 USD ($) businessDay | |
Derivative assets | |||
Gross Amount Recognized | $ 464 | $ 842 | |
Gross Amount Offset | 0 | 0 | |
Net Amount Presented | 464 | 842 | |
Derivative Fair Value of Derivative Asset Gross Amounts not Offset [Abstract] | |||
Derivative Asset, Subject to Master Netting Arrangement, Liability Offset | 196 | 199 | |
Derivative Asset, Subject to Master Netting Arrangement, Collateral, Obligation to Return Cash Not Offset | [1] | 207 | 508 |
Derivative Asset, Including Not Subject to Master Netting Arrangement, after Offset and Deduction, Total | 61 | 135 | |
Derivative liabilities | |||
Gross Amount Recognized | 305 | 307 | |
Gross Amount Offset | 0 | 0 | |
Net Amount Presented | 305 | 307 | |
Derivative Fair Value of Derivative Liabilities Gross Amounts not Offset [Abstract] | |||
Derivative Liability, Subject to Master Netting Arrangement, Asset Offset | 196 | 199 | |
Derivative Liability, Subject to Master Netting Arrangement, Collateral, Right to Reclaim Cash Not Offset | [2] | 103 | $ 113 |
Derivative Liability, Including Not Subject to Master Netting Arrangement, after Offset and Deduction | $ 6 | ||
Business days prior to respective reporting date | businessDay | 2 | 2 | |
Cash collateral posted | $ 56 | ||
Counterparty collateral | $ 47 | $ 113 | |
Derivative Liability, Statement of Financial Position [Extensible Enumeration] | Other non-current liabilities | Other non-current liabilities | |
Derivative Asset, Statement of Financial Position [Extensible Enumeration] | Other current assets | Other current assets | |
[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. |
Financial Instruments - Amounts
Financial Instruments - Amounts Recorded in the Balance Sheets (Details) - Long-term debt - USD ($) $ in Millions | Oct. 31, 2023 | Oct. 31, 2022 |
Derivatives, Fair Value | ||
Carrying amount of the hedged assets/ (liabilities) | $ (2,345) | $ (2,317) |
Cumulative amount of fair value hedging adjustment included in the carrying amount of the hedged assets/ (liabilities) | $ 151 | $ 178 |
Financial Instruments - Pre-tax
Financial Instruments - Pre-tax Effect of Derivative Instruments in Hedging Relationships on OCI (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2023 | Oct. 31, 2022 | Oct. 31, 2021 | |
Derivative Instruments, Gain (Loss) | |||
Net unrealized (losses) gains arising during the period | $ (177) | $ 1,025 | $ (50) |
Total | (253) | 1,124 | (83) |
Foreign exchange contracts | |||
Derivative Instruments, Gain (Loss) | |||
Net unrealized (losses) gains arising during the period | (177) | 1,025 | (50) |
Gains (Losses) Recognized in OCI on Derivatives in Net Investment Hedging Relationship | $ (76) | $ 99 | $ (33) |
Financial Instruments - Pre-t_2
Financial Instruments - Pre-tax Effect of Derivative Instruments on Statement of Earnings (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2023 | Oct. 31, 2022 | Oct. 31, 2021 | |
Derivative Instruments, Gain (Loss) | |||
Net revenue | $ 29,135 | $ 28,496 | $ 27,784 |
Other Nonoperating Income (Expense) | (156) | (188) | (211) |
Revenues [Member] | |||
Derivative Instruments, Gain (Loss) | |||
Derivative, Gain (Loss) on Derivative, Net, Total | $ 28 | $ 388 | $ (81) |
Derivative, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Net revenue | Net revenue | Net revenue |
Nonoperating Income (Expense) [Member] | |||
Derivative Instruments, Gain (Loss) | |||
Derivative, Gain (Loss) on Derivative, Net, Total | $ (249) | $ 874 | $ (137) |
Derivative, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Other Nonoperating Income (Expense) | Other Nonoperating Income (Expense) | Other Nonoperating Income (Expense) |
Interest rate contracts | Revenues [Member] | |||
Derivative Instruments, Gain (Loss) | |||
Gain (Loss) on Fair Value Hedges Recognized in Earnings | $ 0 | $ 0 | $ 0 |
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), Reclassification, before Tax | 0 | 0 | 0 |
Interest rate contracts | Revenues [Member] | Derivatives designated as hedging instruments | |||
Derivative Instruments, Gain (Loss) | |||
Gain (Loss) on Fair Value Hedges Recognized in Earnings | 0 | 0 | 0 |
Interest rate contracts | Nonoperating Income (Expense) [Member] | |||
Derivative Instruments, Gain (Loss) | |||
Gain (Loss) on Fair Value Hedges Recognized in Earnings | (27) | 273 | 125 |
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), Reclassification, before Tax | 0 | 0 | (2) |
Interest rate contracts | Nonoperating Income (Expense) [Member] | Derivatives designated as hedging instruments | |||
Derivative Instruments, Gain (Loss) | |||
Gain (Loss) on Fair Value Hedges Recognized in Earnings | 27 | (273) | (125) |
Foreign exchange contracts | Revenues [Member] | |||
Derivative Instruments, Gain (Loss) | |||
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), Reclassification, before Tax | 28 | 388 | (81) |
Derivative Instruments Not Designated as Hedging Instruments, Gain (Loss), Net | 0 | 0 | 0 |
Foreign exchange contracts | Nonoperating Income (Expense) [Member] | |||
Derivative Instruments, Gain (Loss) | |||
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), Reclassification, before Tax | (144) | 590 | (73) |
Derivative Instruments Not Designated as Hedging Instruments, Gain (Loss), Net | (97) | 287 | (68) |
Other derivatives | Revenues [Member] | |||
Derivative Instruments, Gain (Loss) | |||
Derivative Instruments Not Designated as Hedging Instruments, Gain (Loss), Net | 0 | 0 | 0 |
Other derivatives | Nonoperating Income (Expense) [Member] | |||
Derivative Instruments, Gain (Loss) | |||
Derivative Instruments Not Designated as Hedging Instruments, Gain (Loss), Net | $ (8) | $ (3) | $ 6 |
Borrowings - Notes Payable and
Borrowings - Notes Payable and Short-Term Borrowings (Details) - USD ($) | Oct. 31, 2023 | Oct. 31, 2022 | |
Notes Payable and Short-Term Borrowings | |||
Current portion of long-term debt | $ 4,022,000,000 | [1] | $ 3,876,000,000 |
Total notes payable and short-term borrowings | $ 4,868,000,000 | $ 4,612,000,000 | |
Current portion of long-term debt, weighted average interest rate (as a percent) | 4.80% | 3.60% | |
Asset-backed Securities | |||
Notes Payable and Short-Term Borrowings | |||
Current portion of long-term debt | $ 1,400,000,000 | ||
Commercial paper | |||
Notes Payable and Short-Term Borrowings | |||
Commercial paper | 679,000,000 | $ 542,000,000 | |
Total notes payable and short-term borrowings | $ 0 | $ 0 | |
Weighted-average interest rate | 4.10% | 0.60% | |
Notes payable to banks, lines of credit and other | |||
Notes Payable and Short-Term Borrowings | |||
Notes payable to banks, lines of credit and other | $ 167,000,000 | $ 194,000,000 | |
Weighted-average interest rate | 4.60% | 2.70% | |
[1] As of October 31, 2023, the Current portion of long-term debt, net of discount and issuance costs, included $1.4 billion associated with the current portion of the Company issued asset-backed debt securities. |
Borrowings - Long-Term Debt (De
Borrowings - Long-Term Debt (Details) $ in Millions | 12 Months Ended | |||
Oct. 31, 2023 USD ($) tranche | Oct. 31, 2022 USD ($) tranche | Oct. 31, 2021 USD ($) | ||
Long-term debt | ||||
Fair value adjustment related to hedged debt | $ 151 | $ (178) | ||
Unamortized debt issuance costs | (30) | (31) | ||
Less: current portion | (4,022) | (3,876) | ||
Total long-term debt | $ 7,487 | $ 7,853 | ||
Weighted average interest rate (as a percent) | 4.80% | 3.60% | ||
Interest expense on borrowings recognized in Combined Statements of Earnings | ||||
Financing cost | $ 383 | $ 211 | $ 212 | |
Interest expense | 326 | 260 | 289 | |
Total interest expense | 709 | 471 | $ 501 | |
Asset-backed Securities | $612 issued in September 2023, in six tranches at a weighted average price of 99.99% and a weighted average interest rate of 6.40%, payable monthly from October 2023 with a stated final maturity of July 2031 | ||||
Long-term debt | ||||
Secured debt | 596 | 0 | ||
Face amount of debt instrument | $ 612 | $ 612 | ||
Discount to par (as a percent) | 99.99% | 99.99% | ||
Number of tranches | tranche | 6 | 6 | ||
Weighted average interest rate (as a percent) | 6.40% | 6.40% | ||
Asset-backed Securities | $643 issued in March 2023 and April 2023, in five tranches at a weighted average price of 99.99% and a weighted average interest rate of 5.59%, payable monthly from April 2023 with a stated final maturity of April 2028 | ||||
Long-term debt | ||||
Secured debt | $ 483 | $ 0 | ||
Face amount of debt instrument | $ 643 | $ 643 | ||
Discount to par (as a percent) | 99.99% | 99.99% | ||
Number of tranches | tranche | 5 | 5 | ||
Weighted average interest rate (as a percent) | 5.59% | 5.59% | ||
Asset-backed Securities | $651 issued in October 2022, in five tranches at a weighted average price of 99.99% and a weighted average interest rate of 5.55%, payable monthly from November 2022 with a stated final maturity date of August 2029 | ||||
Long-term debt | ||||
Secured debt | $ 393 | $ 651 | ||
Face amount of debt instrument | $ 651 | $ 651 | ||
Discount to par (as a percent) | 99.99% | 99.99% | ||
Number of tranches | tranche | 5 | 5 | ||
Weighted average interest rate (as a percent) | 5.55% | 5.55% | ||
Asset-backed Securities | $747 issued in May 2022, in six tranches at a weighted average price of 99.99% and a weighted average interest rate of 3.68%, payable monthly from July 2022 with a stated final maturity date of March 2030 | ||||
Long-term debt | ||||
Secured debt | $ 367 | $ 614 | ||
Face amount of debt instrument | $ 747 | $ 747 | ||
Discount to par (as a percent) | 99.99% | 99.99% | ||
Number of tranches | tranche | 6 | 6 | ||
Weighted average interest rate (as a percent) | 3.68% | 3.68% | ||
Asset-backed Securities | $1,000 issued in January 2022, in six tranches at a weighted average price of 99.99% and a weighted average interest rate of 1.51%, payable monthly from March 2022 with a stated final maturity date of November 2029 | ||||
Long-term debt | ||||
Secured debt | $ 391 | $ 712 | ||
Face amount of debt instrument | $ 1,000 | $ 1,000 | ||
Discount to par (as a percent) | 99.99% | 99.99% | ||
Number of tranches | tranche | 6 | 6 | ||
Weighted average interest rate (as a percent) | 1.51% | 1.51% | ||
Asset-backed Securities | $753 issued in June 2021, in six tranches at a weighted average price of 99.99% and a weighted average interest rate of 0.58%, payable monthly from August 2021 with a stated final maturity date of March 2029 | ||||
Long-term debt | ||||
Secured debt | $ 147 | $ 362 | ||
Face amount of debt instrument | $ 753 | $ 753 | ||
Discount to par (as a percent) | 99.99% | 99.99% | ||
Number of tranches | tranche | 6 | 6 | ||
Weighted average interest rate (as a percent) | 0.58% | 0.58% | ||
Asset-backed Securities | $1,000 issued in March 2021, in six tranches at a weighted average price of 99.99% and a weighted average interest rate of 0.49%, payable monthly from April 2021 with a stated final maturity date of March 2031 | ||||
Long-term debt | ||||
Secured debt | $ 102 | $ 354 | ||
Face amount of debt instrument | $ 1,000 | $ 1,000 | ||
Discount to par (as a percent) | 99.99% | 99.99% | ||
Number of tranches | tranche | 6 | 6 | ||
Weighted average interest rate (as a percent) | 0.49% | 0.49% | ||
Asset-backed Securities | $1,000 issued in June 2020, in six tranches at a weighted average price of 99.99% and a weighted average interest rate of 1.19%, payable monthly from August 2020 with a stated final maturity date of July 2030 | ||||
Long-term debt | ||||
Secured debt | $ 0 | $ 151 | ||
Face amount of debt instrument | $ 1,000 | $ 1,000 | ||
Discount to par (as a percent) | 99.99% | 99.99% | ||
Number of tranches | tranche | 6 | 6 | ||
Weighted average interest rate (as a percent) | 1.19% | 1.19% | ||
Asset-backed Securities | $755 issued in February 2020 of in six tranches at a weighted average price of 99.99% and a weighted average interest rate of 1.87%, payable monthly from April 2020 with a stated final maturity date of February 2030 | ||||
Long-term debt | ||||
Secured debt | $ 0 | $ 88 | ||
Face amount of debt instrument | $ 755 | $ 755 | ||
Discount to par (as a percent) | 99.99% | 99.99% | ||
Number of tranches | tranche | 6 | 6 | ||
Weighted average interest rate (as a percent) | 1.87% | 1.87% | ||
Senior Notes | $250 issued at premium to par at a price of 100.452% in June 2023 at 5.90%, due October 1, 2024, interest payable semi-annually on April 1 and October 1 of each year | ||||
Long-term debt | ||||
Unsecured notes | $ 251 | $ 0 | ||
Face amount of debt instrument | $ 250 | $ 250 | ||
Discount to par (as a percent) | 100.452% | 100.452% | ||
Interest rate | 5.90% | 5.90% | ||
Senior Notes | $550 issued at discount to par at a price of 99.887% in June 2023 at 5.25%, due July 1, 2028, interest payable semi-annually on January 1 and July 1 of each year | ||||
Long-term debt | ||||
Unsecured notes | $ 549 | $ 0 | ||
Face amount of debt instrument | $ 550 | $ 550 | ||
Discount to par (as a percent) | 99.887% | 99.887% | ||
Interest rate | 5.25% | 5.25% | ||
Senior Notes | $400 issued at discount to par at a price of 99.997% in March 2023 at 6.102%, due April 1, 2026, interest payable semi-annually on April 1 and October 1 of each year | ||||
Long-term debt | ||||
Unsecured notes | $ 400 | $ 0 | ||
Face amount of debt instrument | $ 400 | $ 400 | ||
Discount to par (as a percent) | 99.997% | 99.997% | ||
Interest rate | 6.102% | 6.102% | ||
Senior Notes | $1,300 issued at discount to par at a price of 99.934% in March 2023 at 5.90%, due October 1, 2024, interest payable semi-annually on April 1 and October 1 of each year | ||||
Long-term debt | ||||
Unsecured notes | $ 1,299 | $ 0 | ||
Face amount of debt instrument | $ 1,300 | $ 1,300 | ||
Discount to par (as a percent) | 99.934% | 99.934% | ||
Interest rate | 5.90% | 5.90% | ||
Senior Notes | $1,000 issued at discount to par at a price of 99.883% in July 2020 at 1.45%, due April 1, 2024, interest payable semi-annually on April 1 and October 1 of each year | ||||
Long-term debt | ||||
Unsecured notes | $ 1,000 | $ 1,000 | ||
Face amount of debt instrument | $ 1,000 | $ 1,000 | ||
Discount to par (as a percent) | 99.883% | 99.883% | ||
Interest rate | 1.45% | 1.45% | ||
Senior Notes | $750 issued at discount to par at a price of 99.820% in July 2020 at 1.75%, due April 1, 2026, interest payable semi-annually on April 1 and October 1 of each year | ||||
Long-term debt | ||||
Unsecured notes | $ 749 | $ 749 | ||
Face amount of debt instrument | $ 750 | $ 750 | ||
Discount to par (as a percent) | 99.82% | 99.82% | ||
Interest rate | 1.75% | 1.75% | ||
Senior Notes | $1,250 issued at discount to par at a price of 99.956% in April 2020 at 4.45%, due October 2, 2023, interest payable semi-annually on April 2 and October 2 of each year | ||||
Long-term debt | ||||
Unsecured notes | $ 0 | $ 1,250 | ||
Face amount of debt instrument | $ 1,250 | $ 1,250 | ||
Discount to par (as a percent) | 99.956% | 99.956% | ||
Interest rate | 4.45% | 4.45% | ||
Senior Notes | $1,000 issued at discount to par at a price of 99.979% in September 2019 at 2.25%, due April 1, 2023, interest payable semi-annually on April 1 and October 1 of each year | ||||
Long-term debt | ||||
Unsecured notes | $ 0 | $ 1,000 | ||
Face amount of debt instrument | $ 1,000 | $ 1,000 | ||
Discount to par (as a percent) | 99.979% | 99.979% | ||
Interest rate | 2.25% | 2.25% | ||
Senior Notes | $2,500 issued at discount to par at a price of 99.725% in October 2015 at 4.90%, due October 15, 2025, interest payable semi-annually on April 15 and October 15 of each year | ||||
Long-term debt | ||||
Unsecured notes | $ 2,499 | $ 2,497 | ||
Face amount of debt instrument | $ 2,500 | $ 2,500 | ||
Discount to par (as a percent) | 99.725% | 99.725% | ||
Interest rate | 4.90% | 4.90% | ||
Senior Notes | $750 issued at discount to par at a price of 99.942% in October 2015 at 6.20%, due October 15, 2035, interest payable semi-annually on April 15 and October 15 of each year | ||||
Long-term debt | ||||
Unsecured notes | $ 750 | $ 750 | ||
Face amount of debt instrument | $ 750 | $ 750 | ||
Discount to par (as a percent) | 99.942% | 99.942% | ||
Interest rate | 6.20% | 6.20% | ||
Senior Notes | $1,500 issued at discount to par at a price of 99.932% in October 2015 at 6.35%, due October 15, 2045, interest payable semi-annually on April 15 and October 15 of each year | ||||
Long-term debt | ||||
Unsecured notes | $ 1,499 | $ 1,499 | ||
Face amount of debt instrument | $ 1,500 | $ 1,500 | ||
Discount to par (as a percent) | 99.932% | 99.932% | ||
Interest rate | 6.35% | 6.35% | ||
Other, including capital lease obligations, at 1.1%-9.0%, due in calendar years 2021-2030 | ||||
Long-term debt | ||||
Other, including capital lease obligations, at 1.1%-9.0%, due in calendar years 2021-2030 | [1] | $ 215 | $ 261 | |
Other, including capital lease obligations, at 1.1%-9.0%, due in calendar years 2021-2030 | Financial Services | ||||
Long-term debt | ||||
Other, including capital lease obligations | $ 36 | $ 86 | ||
Other, including capital lease obligations, at 1.1%-9.0%, due in calendar years 2021-2030 | Minimum | ||||
Long-term debt | ||||
Interest rate | 1.10% | 1.10% | ||
Other, including capital lease obligations, at 1.1%-9.0%, due in calendar years 2021-2030 | Maximum | ||||
Long-term debt | ||||
Interest rate | 6.30% | 6.30% | ||
[1] Other, including finance lease obligations included $36 million and $86 million as of October 31, 2023 and 2022, respectively, of borrowing- and funding-related activity associated with FS and its subsidiaries that are collateralized by receivables and underlying assets associated with the related finance and operating leases. For both the periods presented, the carrying amount of the assets approximated the carrying amount of the borrowings. |
Borrowings - Narrative (Details
Borrowings - Narrative (Details) | 12 Months Ended | ||
Sep. 21, 2023 USD ($) | Oct. 31, 2023 USD ($) commercialPaperProgram | Oct. 31, 2022 USD ($) | |
Debt instruments | |||
Current portion of long-term debt, weighted average interest rate (as a percent) | 4.80% | 3.60% | |
Amount outstanding | $ 4,868,000,000 | $ 4,612,000,000 | |
Fair value adjustment related to hedged debt | 151,000,000 | (178,000,000) | |
Discount on debt issuance | 4,000,000 | ||
Unsecured revolving credit facility | |||
Debt instruments | |||
Amount available under credit facility | $ 4,750,000,000 | ||
Term of credit facility | 5 years | ||
Borrowings outstanding | $ 0 | 0 | |
Commercial paper | |||
Debt instruments | |||
Number of commercial paper programs | commercialPaperProgram | 2 | ||
Maximum borrowing capacity under credit facility | $ 4,750,000,000 | ||
Amount outstanding | 0 | 0 | |
Commercial paper | U.S. program | |||
Debt instruments | |||
Maximum borrowing capacity under credit facility | 4,750,000,000 | ||
Commercial paper | Euro program | |||
Debt instruments | |||
Maximum borrowing capacity under credit facility | 3,000,000,000 | ||
Hewlett Packard Enterprise | Commercial paper | Euro program | |||
Debt instruments | |||
Amount outstanding | 679,000,000 | $ 542,000,000 | |
Hewlett-Packard International Bank PLC | Commercial paper | Euro Commercial Paper/Certificate of Deposit Programme | |||
Debt instruments | |||
Maximum borrowing capacity under credit facility | $ 1,000,000,000 | ||
$1,250 issued at discount to par at a price of 99.956% in April 2020 at 4.45%, due October 2, 2023, interest payable semi-annually on April 2 and October 2 of each year | Senior Notes | |||
Debt instruments | |||
Interest rate | 4.45% | 4.45% | |
Face amount of debt instrument | $ 1,250,000,000 | $ 1,250,000,000 | |
Discount to par (as a percent) | 99.956% | 99.956% | |
Uncommitted credit facility | Revolving Credit Facility | |||
Debt instruments | |||
Maximum borrowing capacity under credit facility | $ 500,000,000 | ||
Term of credit facility | 5 years | ||
Borrowings outstanding | $ 0 |
Borrowings - Future Maturities
Borrowings - Future Maturities of Long Term Debt (Details) $ in Millions | Oct. 31, 2023 USD ($) |
Debt Disclosure [Abstract] | |
2024 | $ 4,030 |
2025 | 3,486 |
2026 | 1,351 |
2027 | 9 |
2028 | 557 |
Thereafter | 2,261 |
Total | $ 11,694 |
Stockholders' Equity - Componen
Stockholders' Equity - Components of AOCI (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2023 | Oct. 31, 2022 | Oct. 31, 2021 | |
Components of accumulated other comprehensive income, net of taxes | |||
Balance | $ 19,909 | $ 20,017 | $ 16,096 |
Balance | 21,238 | 19,909 | 20,017 |
Net unrealized gains (losses) on available-for-sale securities | |||
Components of accumulated other comprehensive income, net of taxes | |||
Balance | (1) | 15 | 18 |
Other comprehensive income (loss) before reclassifications | 1 | (16) | (3) |
Reclassifications of losses into earnings | 0 | 0 | 0 |
Tax (provision) benefit | 0 | 0 | 0 |
Balance | 0 | (1) | 15 |
Net unrealized gains (losses) on cash flow hedges | |||
Components of accumulated other comprehensive income, net of taxes | |||
Balance | 109 | 81 | (7) |
Other comprehensive income (loss) before reclassifications | (177) | 1,025 | (50) |
Reclassifications of losses into earnings | (116) | 978 | (156) |
Tax (provision) benefit | 13 | 19 | 18 |
Balance | 61 | 109 | 81 |
Unrealized components of defined benefit plans | |||
Components of accumulated other comprehensive income, net of taxes | |||
Balance | (2,596) | (2,545) | (3,473) |
Other comprehensive income (loss) before reclassifications | (99) | (315) | 763 |
Reclassifications of losses into earnings | (147) | (160) | (285) |
Tax (provision) benefit | 41 | (104) | 120 |
Balance | (2,507) | (2,596) | (2,545) |
Cumulative translation adjustment | |||
Components of accumulated other comprehensive income, net of taxes | |||
Balance | (610) | (466) | (477) |
Other comprehensive income (loss) before reclassifications | (32) | (146) | 16 |
Reclassifications of losses into earnings | 0 | 0 | 0 |
Tax (provision) benefit | 4 | (2) | 5 |
Balance | (638) | (610) | (466) |
Accumulated Other Comprehensive Loss | |||
Components of accumulated other comprehensive income, net of taxes | |||
Balance | (3,098) | (2,915) | (3,939) |
Other comprehensive income (loss) before reclassifications | (307) | 548 | 726 |
Reclassifications of losses into earnings | (263) | 818 | (441) |
Tax (provision) benefit | 58 | (87) | 143 |
Balance | $ (3,084) | $ (3,098) | $ (2,915) |
Stockholders' Equity - Narrativ
Stockholders' Equity - Narrative (Details) - USD ($) $ / shares in Units, shares in Millions | 12 Months Ended | |||||||
Nov. 28, 2023 | Oct. 31, 2023 | Oct. 31, 2022 | Oct. 31, 2021 | Feb. 21, 2018 | Oct. 16, 2017 | May 24, 2016 | Oct. 13, 2015 | |
Equity, Class of Treasury Stock [Line Items] | ||||||||
Cash dividends declared per share (in dollars per share) | $ 0.48 | $ 0.48 | $ 0.48 | |||||
Stock repurchase program authorized amount | $ 3,000,000,000 | |||||||
Remaining authorization | $ 1,000,000,000 | |||||||
Subsequent Event | ||||||||
Equity, Class of Treasury Stock [Line Items] | ||||||||
Cash dividends declared per share (in dollars per share) | $ 0.13 | |||||||
Share Repurchase Program | ||||||||
Equity, Class of Treasury Stock [Line Items] | ||||||||
Stock repurchase program authorized amount | $ 2,500,000,000 | $ 5,000,000,000 | $ 3,000,000,000 | |||||
Retired (shares) | 27.2 | 35.4 | ||||||
Open market repurchases (shares) | 0.2 | 0.3 | 0.8 | |||||
Accelerated Share Repurchase Agreement | ||||||||
Equity, Class of Treasury Stock [Line Items] | ||||||||
Repurchased | $ 400,000,000 | $ 500,000,000 |
Net Earnings Per Share (Details
Net Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 12 Months Ended | |||
Oct. 31, 2023 | Oct. 31, 2022 | Oct. 31, 2021 | ||
Numerator: | ||||
Net earnings | $ 2,025 | $ 868 | $ 3,427 | |
Denominator: | ||||
Weighted-average shares used to compute basic net EPS (in shares) | 1,299,000 | 1,303,000 | 1,309,000 | |
Dilutive effect of employee stock plans (in shares) | 17,000 | 19,000 | 21,000 | |
Weighted-average shares used to compute diluted net EPS (in shares) | 1,316,000 | 1,322,000 | 1,330,000 | |
Net earnings per share: | ||||
Basic (in dollars per share) | $ 1.56 | $ 0.67 | $ 2.62 | |
Diluted (in dollars per share) | $ 1.54 | $ 0.66 | $ 2.58 | |
Anti-dilutive weighted average stock awards (in shares) | [1] | 0 | 2,000 | 6,000 |
[1] The Company excludes shares potentially issuable under employee stock plans that could dilute basic net EPS in the future from the calculation of diluted net earnings per share, as their effect, if included, would have been anti-dilutive for the periods presented. |
Litigation and Contingencies (D
Litigation and Contingencies (Details) $ in Millions | 1 Months Ended | 24 Months Ended | |||||||
Jun. 15, 2022 USD ($) | Sep. 22, 2020 patent | Aug. 18, 2012 | May 10, 2010 USD ($) employee | Sep. 30, 2011 | Jul. 31, 2011 | Oct. 31, 2008 contract | Apr. 20, 2012 USD ($) | Apr. 11, 2012 USD ($) | |
Litigation and Contingencies | |||||||||
Damages sought | $ 370 | ||||||||
Bid and contract term | 5 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 | ||||||||
Bangalore Commissioner of Customs | |||||||||
Litigation and Contingencies | |||||||||
Duties and penalties under show cause notices | $ 17 | $ 386 | |||||||
ECT Proceedings | |||||||||
Litigation and Contingencies | |||||||||
Number of ECT contracts related to alleged improprieties | contract | 3 | ||||||||
ECT Proceedings | Minimum | |||||||||
Litigation and Contingencies | |||||||||
Length of sanctions | 2 years | ||||||||
ECT Proceedings | Maximum | |||||||||
Litigation and Contingencies | |||||||||
Length of sanctions | 5 years | ||||||||
Forsyth, et al. vs HP Inc. and Hewlett Packard Enterprise | Minimum | |||||||||
Litigation and Contingencies | |||||||||
Age of terminated employees | 40 years | ||||||||
Terix Copyright Matter | Settled Litigation | |||||||||
Litigation and Contingencies | |||||||||
Amount awarded to other party | $ 30 | ||||||||
Q3 Networking Litigation | |||||||||
Litigation and Contingencies | |||||||||
Number of patents allegedly infringed | patent | 4 |
Guarantees, Indemnifications _3
Guarantees, Indemnifications and Warranties - Indemnified Litigation matters and Other Contingencies (Details) - USD ($) $ in Millions | Oct. 31, 2023 | Oct. 31, 2022 | |
Other Commitments [Line Items] | |||
Other assets, noncurrent | $ 11,377 | $ 10,537 | |
Payable | 6,546 | 6,187 | |
Net indemnification receivable - long-term | 3,047 | 3,559 | |
Tax Indemnification | |||
Other Commitments [Line Items] | |||
Other assets, noncurrent | [1] | 31 | 7 |
Net indemnification receivable - long-term | [1] | 11 | 11 |
Litigation Matters and Other Contingencies | Litigation Matters and Other Contingencies | |||
Other Commitments [Line Items] | |||
Other assets, noncurrent | 42 | 47 | |
Payable | $ 48 | $ 50 | |
[1] The actual amount that the Company may receive or pay could vary depending upon the outcome of certain unresolved tax matters, which may not be resolved for several years. |
Guarantees, Indemnifications _4
Guarantees, Indemnifications and Warranties - Changes in Aggregate Product Warranty Liabilities and Changes (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Oct. 31, 2023 | Oct. 31, 2022 | |||
Changes in aggregated product warranty liabilities | ||||
Balance at beginning of balance | $ 360 | [1] | $ 327 | |
Charges | 184 | 238 | ||
Adjustments related to pre-existing warranties | (18) | (2) | ||
Settlements made | (208) | (203) | ||
Balance at end of year | [1] | $ 318 | $ 360 | |
[1] The Company included the current portion in Other accrued liabilities, and amounts due after one year in Other non-current liabilities in the accompanying Consolidated Balance Sheets. |
Commitments (Details)
Commitments (Details) $ in Millions | Oct. 31, 2023 USD ($) |
Unconditional purchase obligations details | |
Recorded unconditional purchase obligation, total | $ 1,600 |
Recorded Unconditional Purchase Obligation, to be Paid, Year One | 580 |
Recorded Unconditional Purchase Obligation, to be Paid, Year Two | 293 |
Recorded Unconditional Purchase Obligation, to be Paid, Year Three | 317 |
Recorded Unconditional Purchase Obligation, to be Paid, Year Four | 310 |
Recorded Unconditional Purchase Obligation, to be Paid, Year Five | 46 |
Recorded Unconditional Purchase Obligation, to be Paid, after Year Five | $ 5 |
Equity Method Investments - Nar
Equity Method Investments - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Oct. 31, 2023 | Oct. 31, 2022 | Oct. 31, 2021 | May 26, 2023 | |
Schedule of Equity Method Investments [Line Items] | ||||
Investments in equity interests | $ 2,197 | $ 2,160 | ||
Basis difference | 1,677 | |||
Equity method investment, other than temporary impairment | 0 | 0 | ||
Earnings (loss) from equity interests | 245 | 215 | $ 180 | |
Accounts payable | 7,136 | 8,717 | ||
Accounts receivable, net of allowances | 3,481 | 4,101 | ||
Equity Method Investee | H3C | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Revenues | 383 | 848 | 794 | |
Purchases from related party | 125 | 148 | $ 150 | |
Accounts payable | 10 | 22 | ||
Accounts receivable, net of allowances | 12 | 18 | ||
H3C | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Investments in equity interests | $ 2,200 | $ 2,200 | ||
Ownership | 49% | 49% | ||
Put share purchase agreement | $ 3,500 | |||
Basis difference | $ 2,534 | |||
Weighted-average useful life | 5 years | |||
Cash dividend | $ 200 | $ 197 |
Equity Method Investments - All
Equity Method Investments - Allocation of Proportionate Share of Net Assets (Details) $ in Millions | Oct. 31, 2023 USD ($) |
Schedule of Equity Method Investments [Line Items] | |
Basis difference | $ 1,677 |
H3C | |
Schedule of Equity Method Investments [Line Items] | |
Equity method goodwill | 1,674 |
Intangible assets | 749 |
In-process research and development | 188 |
Deferred tax liabilities | (152) |
Other | 75 |
Basis difference | $ 2,534 |
Equity Method Investments - Ear
Equity Method Investments - Earnings from Equity Interest (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Oct. 31, 2023 | Oct. 31, 2022 | Oct. 31, 2021 | ||
Schedule of Equity Method Investments [Line Items] | ||||
Earnings from equity interests, net of taxes | [1] | $ 242 | $ 270 | $ 292 |
Basis difference amortization | (9) | (45) | (109) | |
Adjustment of profit on intra-entity sales | 12 | (10) | (3) | |
Earnings from equity interests | 245 | 215 | 180 | |
Intangible asset impairment | 0 | (905) | 0 | |
H3C | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Earnings from equity interests, net of taxes | 244 | 275 | 260 | |
Intangible asset impairment | (8) | |||
Other Venture Investments | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Earnings from equity interests, net of taxes | $ (2) | $ (5) | $ 32 | |
[1]For fiscal 2023, earnings (loss) from equity interests, net of taxes include $244 million, which reflected the Company’s portion of intangible asset impairment charges of $(8) million, from H3C and $(2) million from other venture investments. For fiscal 2022, and 2021 earnings (loss) from equity interests, net of taxes included $275 million and $260 million from H3C and $(5) million and $32 million from other venture investments, respectively. |
Equity Method Investments - Fin
Equity Method Investments - Financial Presentation of Equity Interest (Details) - USD ($) $ in Millions | 12 Months Ended | |||||
Oct. 31, 2023 | Sep. 30, 2023 | Oct. 31, 2022 | Sep. 30, 2022 | Oct. 31, 2021 | Sep. 30, 2021 | |
Schedule of Equity Method Investments [Line Items] | ||||||
Net revenue | $ 29,135 | $ 28,496 | $ 27,784 | |||
Net income | 2,036 | 873 | $ 3,436 | |||
Current assets | 18,948 | 20,506 | ||||
Current liabilities | $ 21,882 | $ 23,174 | ||||
H3C | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Net revenue | $ 7,161 | $ 7,633 | $ 6,377 | |||
Gross profit | 1,790 | 2,014 | 1,676 | |||
Net income | 498 | 561 | $ 530 | |||
Current assets | 5,073 | 4,341 | ||||
Non-current assets | 677 | 631 | ||||
Current liabilities | 4,052 | 3,299 | ||||
Non-current liabilities | $ 489 | $ 203 |