Document and Entity Information
Document and Entity Information | 6 Months Ended |
Apr. 30, 2019shares | |
Document and Entity Information | |
Entity Registrant Name | HP Inc. |
Entity Central Index Key | 0000047217 |
Document Type | 10-Q |
Document Period End Date | Apr. 30, 2019 |
Amendment Flag | false |
Current Fiscal Year End Date | --10-31 |
Entity Filer Category | Large Accelerated Filer |
Entity Emerging Growth Company | false |
Entity Small Business | false |
Entity Common Stock, Shares Outstanding | 1,506,291,734 |
Document Fiscal Year Focus | 2019 |
Document Fiscal Period Focus | Q2 |
Consolidated Condensed Statemen
Consolidated Condensed Statements of Earnings (Unaudited) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Apr. 30, 2019 | Apr. 30, 2018 | Apr. 30, 2019 | Apr. 30, 2018 | |
Income Statement [Abstract] | ||||
Net revenue | $ 14,036 | $ 14,003 | $ 28,746 | $ 28,520 |
Costs and expenses: | ||||
Cost of revenue | 11,307 | 11,301 | 23,405 | 23,236 |
Research and development | 353 | 356 | 697 | 703 |
Selling, general and administrative | 1,339 | 1,318 | 2,587 | 2,547 |
Restructuring and other charges | 69 | 57 | 124 | 88 |
Acquisition-related charges | 11 | 45 | 21 | 87 |
Amortization of intangible assets | 29 | 20 | 58 | 40 |
Total costs and expenses | 13,108 | 13,097 | 26,892 | 26,701 |
Earnings from operations | 928 | 906 | 1,854 | 1,819 |
Interest and other, net | (45) | (823) | (71) | (831) |
Earnings before taxes | 883 | 83 | 1,783 | 988 |
(Provision for) benefit from taxes | (101) | 975 | (198) | 2,008 |
Net earnings | $ 782 | $ 1,058 | $ 1,585 | $ 2,996 |
Net earnings per share: | ||||
Basic (usd per share) | $ 0.51 | $ 0.65 | $ 1.03 | $ 1.83 |
Diluted (usd per share) | 0.51 | 0.64 | 1.02 | 1.81 |
Cash dividends declared per share (usd per share) | $ 0 | $ 0 | $ 0.32 | $ 0.28 |
Weighted-average shares used to compute net earnings per share: | ||||
Basic (shares) | 1,529 | 1,630 | 1,543 | 1,640 |
Diluted (shares) | 1,536 | 1,646 | 1,551 | 1,658 |
Consolidated Condensed Statem_2
Consolidated Condensed Statements of Comprehensive Income (Unaudited) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Apr. 30, 2019 | Apr. 30, 2018 | Apr. 30, 2019 | Apr. 30, 2018 | |
Statement of Comprehensive Income [Abstract] | ||||
Net earnings | $ 782 | $ 1,058 | $ 1,585 | $ 2,996 |
Change in unrealized components of available-for-sale debt securities: | ||||
Unrealized losses arising during the period | 0 | (2) | 0 | (5) |
Losses (gains) reclassified into earnings | 3 | 0 | 3 | (5) |
Change in unrealized components of available-for-sale securities | 3 | (2) | 3 | (10) |
Change in unrealized components of cash flow hedges: | ||||
Unrealized gains (losses) arising during the period | 198 | 297 | 91 | (254) |
Losses (gains) reclassified into earnings | 6 | 276 | (173) | 346 |
Change in unrealized components of cash flow hedges | 204 | 573 | (82) | 92 |
Change in unrealized components of defined benefit plans: | ||||
Losses arising during the period | (4) | 0 | (4) | 0 |
Amortization of actuarial loss and prior service benefit | 12 | 13 | 23 | 25 |
Settlements and other | 1 | 0 | (1) | 1 |
Change in unrealized components of defined benefit plans | 9 | 13 | 18 | 26 |
Change in cumulative translation adjustment | 13 | 0 | 8 | 0 |
Other comprehensive income (loss) before taxes | 229 | 584 | (53) | 108 |
Provision for taxes | (42) | (69) | (2) | (4) |
Other comprehensive income (loss), net of taxes | 187 | 515 | (55) | 104 |
Comprehensive income | $ 969 | $ 1,573 | $ 1,530 | $ 3,100 |
Consolidated Condensed Balance
Consolidated Condensed Balance Sheets (Unaudited) - USD ($) $ in Millions | Apr. 30, 2019 | Oct. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 3,556 | $ 5,166 |
Accounts receivable, net | 5,414 | 5,113 |
Inventory | 5,394 | 6,062 |
Other current assets | 3,921 | 5,046 |
Total current assets | 18,285 | 21,387 |
Property, plant and equipment, net | 2,412 | 2,198 |
Goodwill | 6,349 | 5,968 |
Other non-current assets | 4,900 | 5,069 |
Total assets | 31,946 | 34,622 |
Current liabilities: | ||
Notes payable and short-term borrowings | 290 | 1,463 |
Accounts payable | 13,839 | 14,816 |
Employee compensation and benefits | 826 | 1,136 |
Taxes on earnings | 206 | 340 |
Other accrued liabilities | 8,042 | 7,376 |
Total current liabilities | 23,203 | 25,131 |
Long-term debt | 4,749 | 4,524 |
Other non-current liabilities | 5,481 | 5,606 |
Stockholders’ deficit: | ||
Preferred stock, $0.01 par value (300 shares authorized; none issued) | 0 | 0 |
Common stock, $0.01 par value (9,600 shares authorized; 1,506 and 1,560 shares issued and outstanding at April 30, 2019 and October 31, 2018, respectively) | 15 | 16 |
Additional paid-in capital | 723 | 663 |
Accumulated deficit | (1,325) | (473) |
Accumulated other comprehensive loss | (900) | (845) |
Total stockholders’ deficit | (1,487) | (639) |
Total liabilities and stockholders’ deficit | $ 31,946 | $ 34,622 |
Consolidated Condensed Balanc_2
Consolidated Condensed Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Apr. 30, 2019 | Oct. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (usd per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 300,000,000 | 300,000,000 |
Preferred stock, shares issued | 0 | 0 |
Common stock, par value (usd per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 9,600,000,000 | 9,600,000,000 |
Common stock, shares issued | 1,506,000,000 | 1,560,000,000 |
Common stock, shares outstanding | 1,506,000,000 | 1,560,000,000 |
Consolidated Condensed Statem_3
Consolidated Condensed Statements of Cash Flows (Unaudited) - USD ($) $ in Millions | 6 Months Ended | |
Apr. 30, 2019 | Apr. 30, 2018 | |
Cash flows from operating activities: | ||
Net earnings | $ 1,585 | $ 2,996 |
Adjustments to reconcile net earnings to net cash provided by operating activities: | ||
Depreciation and amortization | 349 | 256 |
Stock-based compensation expense | 173 | 148 |
Restructuring and other charges | 124 | 88 |
Deferred taxes on earnings | 118 | (3,316) |
Other, net | 113 | 198 |
Changes in operating assets and liabilities, net of acquisitions: | ||
Accounts receivable | (103) | 38 |
Inventory | 362 | 450 |
Accounts payable | (963) | (277) |
Taxes on earnings | 0 | 935 |
Restructuring and other | (79) | (177) |
Other assets and liabilities | 44 | 707 |
Net cash provided by operating activities | 1,723 | 2,046 |
Cash flows from investing activities: | ||
Investment in property, plant and equipment | (303) | (242) |
Proceeds from sale of property, plant and equipment | 0 | 110 |
Purchases of available-for-sale securities and other investments | (69) | (304) |
Maturities and sales of available-for-sale securities and other investments | 754 | 345 |
Collateral posted for derivative instruments | (32) | (901) |
Collateral returned for derivative instruments | 32 | 910 |
Payment made in connection with business acquisitions, net of cash acquired | (404) | (1,020) |
Net cash used in investing activities | (22) | (1,102) |
Cash flows from financing activities: | ||
(Payments of) Proceeds from short-term borrowings with original maturities less than 90 days, net | (856) | 837 |
Proceeds from short-term borrowings with original maturities greater than 90 days | 0 | 300 |
Proceeds from debt, net of issuance costs | 64 | 0 |
Payment of short-term borrowings with original maturities greater than 90 days | 0 | (1,087) |
Payment of debt | (538) | (2,026) |
Stock-based award activities | (76) | 2 |
Repurchase of common stock | (1,411) | (1,263) |
Cash dividends paid | (494) | (457) |
Net cash used in financing activities | (3,311) | (3,694) |
Decrease in cash and cash equivalents | (1,610) | (2,750) |
Cash and cash equivalents at beginning of period | 5,166 | 6,997 |
Cash and cash equivalents at end of period | 3,556 | 4,247 |
Supplemental schedule of non-cash activities: | ||
Purchase of assets under capital leases | $ 165 | $ 129 |
Consolidated Condensed Statem_4
Consolidated Condensed Statements of Stockholders’ Deficit (Unaudited) - USD ($) shares in Thousands, $ in Millions | Total | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated other comprehensive loss |
Balance (in shares) at Oct. 31, 2017 | 1,649,580 | ||||
Balance at Oct. 31, 2017 | $ (3,408) | $ 16 | $ 380 | $ (2,386) | $ (1,418) |
Increase (Decrease) in Stockholders' Equity | |||||
Net earnings | 2,996 | 2,996 | |||
Other comprehensive income, net of taxes | 104 | 104 | |||
Comprehensive income | 3,100 | ||||
Issuance of common stock in connection with employee stock plans and other (in shares) | 16,681 | ||||
Issuance of common stock in connection with employee stock plans and other | $ (4) | (4) | |||
Repurchases of common stock (in shares) | (56,000) | (55,749) | |||
Repurchases of common stock | $ (1,242) | (14) | (1,228) | ||
Cash dividends | (457) | (457) | |||
Stock-based compensation expense | 148 | 148 | |||
Balance (in shares) at Apr. 30, 2018 | 1,610,512 | ||||
Balance at Apr. 30, 2018 | (1,863) | $ 16 | 510 | (1,075) | (1,314) |
Balance (in shares) at Jan. 31, 2018 | 1,641,374 | ||||
Balance at Jan. 31, 2018 | (2,742) | $ 16 | 417 | (1,346) | (1,829) |
Increase (Decrease) in Stockholders' Equity | |||||
Net earnings | 1,058 | 1,058 | |||
Other comprehensive income, net of taxes | 515 | 515 | |||
Comprehensive income | 1,573 | ||||
Issuance of common stock in connection with employee stock plans and other (in shares) | 4,527 | ||||
Issuance of common stock in connection with employee stock plans and other | $ 39 | 39 | |||
Repurchases of common stock (in shares) | (35,000) | (35,389) | |||
Repurchases of common stock | $ (798) | (9) | (789) | ||
Cash dividends | 2 | 2 | |||
Stock-based compensation expense | 63 | 63 | |||
Balance (in shares) at Apr. 30, 2018 | 1,610,512 | ||||
Balance at Apr. 30, 2018 | $ (1,863) | $ 16 | 510 | (1,075) | (1,314) |
Balance (in shares) at Oct. 31, 2018 | 1,560,000 | 1,560,270 | |||
Balance at Oct. 31, 2018 | $ (639) | $ 16 | 663 | (473) | (845) |
Increase (Decrease) in Stockholders' Equity | |||||
Net earnings | 1,585 | 1,585 | |||
Other comprehensive income, net of taxes | (55) | (55) | |||
Comprehensive income | 1,530 | ||||
Issuance of common stock in connection with employee stock plans and other (in shares) | 12,144 | ||||
Issuance of common stock in connection with employee stock plans and other | $ (86) | (86) | |||
Repurchases of common stock (in shares) | (66,000) | (66,122) | |||
Repurchases of common stock | $ (1,409) | $ (1) | (27) | (1,381) | |
Cash dividends | (493) | (493) | |||
Stock-based compensation expense | $ 173 | 173 | |||
Balance (in shares) at Apr. 30, 2019 | 1,506,000 | 1,506,292 | |||
Balance at Apr. 30, 2019 | $ (1,487) | $ 15 | 723 | (1,325) | (900) |
Balance (in shares) at Jan. 31, 2019 | 1,539,372 | ||||
Balance at Jan. 31, 2019 | (1,837) | $ 15 | 666 | (1,431) | (1,087) |
Increase (Decrease) in Stockholders' Equity | |||||
Net earnings | 782 | 782 | |||
Other comprehensive income, net of taxes | 187 | 187 | |||
Comprehensive income | 969 | ||||
Issuance of common stock in connection with employee stock plans and other (in shares) | 765 | ||||
Issuance of common stock in connection with employee stock plans and other | $ 5 | 5 | |||
Repurchases of common stock (in shares) | (34,000) | (33,845) | |||
Repurchases of common stock | $ (693) | (14) | (679) | ||
Cash dividends | 3 | 3 | |||
Stock-based compensation expense | $ 66 | 66 | |||
Balance (in shares) at Apr. 30, 2019 | 1,506,000 | 1,506,292 | |||
Balance at Apr. 30, 2019 | $ (1,487) | $ 15 | $ 723 | $ (1,325) | $ (900) |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Apr. 30, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentati on Basis of Presentation The accompanying Consolidated Condensed Financial Statements of HP and its wholly-owned subsidiaries are prepared in conformity with United States (“U.S.”) generally accepted accounting principles (“GAAP”). The interim financial information is unaudited but reflects all normal adjustments that are necessary to provide a fair statement of results for the interim periods presented. This interim information should be read in conjunction with the Consolidated Financial Statements for the fiscal year ended October 31, 2018 in the Annual Report on Form 10-K, filed on December 13, 2018 . The Consolidated Condensed Balance Sheet for October 31, 2018 was derived from audited financial statements. Principles of Consolidation The Consolidated Condensed Financial Statements include the accounts of HP and its subsidiaries and affiliates in which HP has a controlling financial interest or is the primary beneficiary. All intercompany balances and transactions have been eliminated. Reclassifications Effective at the beginning of its first quarter of fiscal year 2019, HP implemented an organizational change to align its business unit financial reporting more closely with its current business structure. HP reflected this change to its business unit information in prior reporting periods on an as-if basis. The reporting change had no impact to previously reported segment net revenue, consolidated net revenue, earnings from operations, net earnings or net earnings per share (“EPS”). HP has reclassified certain prior-year amounts to conform to the current-year presentation as a result of the adoption of Accounting Standards Update (“ASU”) 2017-07, “Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Post-retirement Benefit Cost”. This adoption had no impact on previously reported consolidated net revenue, net earnings or net EPS. For detailed discussion, see Note 2, “Segment Information”. Use of Estimates The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in HP’s Consolidated Condensed Financial Statements and accompanying notes. Actual results could differ materially from those estimates. Separation Transaction On November 1, 2015, Hewlett-Packard Company completed the separation of Hewlett Packard Enterprise Company (“Hewlett Packard Enterprise”), Hewlett-Packard Company’s former enterprise technology infrastructure, software, services and financing businesses (the “Separation”). In connection with the Separation, HP entered into a separation and distribution agreement, a tax matters agreement, an employee matters agreement and various other agreements with Hewlett Packard Enterprise that provide a framework for the relationships between the parties. For more information on the impacts of these agreements, see Note 6, “Supplementary Financial Information”, Note 12, “Litigation and Contingencies” and Note 13, “Guarantees, Indemnifications and Warranties”. Recently Adopted Accounting Pronouncements In March 2017, the Financial Accounting Standards Board (“FASB”) issued guidance, which addresses the improvement of the presentation of net periodic pension and net periodic post-retirement benefit cost. The guidance requires entities to present the service cost component of net periodic benefit cost in the same income statement line item as other compensation costs arising from services rendered during the period. Additionally, the guidance requires that companies present the other components of the net periodic benefit cost separately from the line item that includes service cost and any other subtotal of income from operations. The amendments in this guidance are to be applied retrospectively for presentation in the Consolidated Condensed Statements of Earnings. A practical expedient allows companies to use the amount disclosed in its pension and other post-retirement plan note for the prior comparative periods as the estimation basis for applying the retrospective presentation requirements. HP adopted this guidance in the first quarter of fiscal year 2019 and elected to use the practical expedient. The adoption of this guidance has no impact on net earnings. The reclassification resulted in an increase in Selling, general and administrative expenses and a reduction in interest and other, net of $58 million and $118 million for the three and six months ended April 30, 2018, respectively. In November 2016, the FASB issued guidance, which addresses the presentation of restricted cash in the statement of cash flows. The guidance requires entities to present the changes in the total of cash, cash equivalents, restricted cash, and restricted cash equivalents in the statement of cash flows. As a result, entities will no longer present transfers between cash and cash equivalents and restricted cash and restricted cash equivalents in the statement of cash flows. HP adopted this guidance in the first quarter of fiscal year 2019. The implementation of this guidance did not have any impact on its Consolidated Condensed Financial Statements. In October 2016, the FASB issued guidance, which amends the existing accounting for Intra-Entity Transfers of Assets Other Than Inventory. The guidance (Topic 740) requires an entity to recognize the income tax consequences of intra-entity transfers, other than inventory, when the transfer occurs. It also requires modified retrospective transition with a cumulative catch-up adjustment to opening retained earnings in the period of adoption. HP adopted this guidance in the first quarter of fiscal year 2019. The implementation of this guidance resulted in $353 million of net reduction to its prepaid tax asset adjusted through accumulated deficit. In August 2016, the FASB issued guidance, which amends the existing accounting standards for the classification of certain cash receipts and cash payments on the statement of cash flows. HP adopted this guidance in the first quarter of fiscal year 2019. The implementation of this guidance did not have any impact on its Consolidated Condensed Financial Statements. In January 2016, the FASB issued guidance, which amends the existing accounting standards for the recognition and measurement of financial assets and financial liabilities. The guidance (Topic 825-10) primarily addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. The amendments should be applied by means of a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption, with other amendments related specifically to equity securities without readily determinable fair values applied prospectively. HP adopted this guidance in the first quarter of fiscal year 2019. The implementation of this guidance did not have a material impact on its Consolidated Condensed Financial Statements. In May 2014, the FASB issued guidance, which amends the existing accounting standards for revenue recognition. The amendments (Topic 606) are based on the principle that revenue should be recognized to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. HP adopted the new revenue standard in the first quarter of fiscal year 2019 using the modified retrospective method applied to contracts that were not completed as of November 1, 2018. HP recognized the net impact of adoption as an increase to accumulated deficit by $212 million , net of tax on November 1, 2018. The primary changes that impact the Consolidated Condensed Financial Statements are as below: Variable consideration - HP estimates the transaction price for elements of consideration which are variable in nature. Certain distributor programs and incentive offerings which were recorded at the date the sales incentives were offered, will now be recorded at the time of revenue recognition based on estimates. Costs to obtain a contract - The incremental costs to obtain a contract are primarily comprised of eligible sales commissions which were previously expensed as incurred. HP will capitalize the eligible sales commission costs for contracts with terms of more than one year and will amortize these costs over the expected period of the benefit. The adoption has led to certain balance sheet reclassifications pertaining to return asset and liability and repurchase reserves which impacts accounts receivable, net, inventory, other current assets and other accrued liabilities balances. Revenue Recognition General HP recognizes revenues at a point in time or over time depicting the transfer of promised goods or services to customers in an amount that reflects the consideration to which HP expects to be entitled in exchange for those goods or services. HP follows the five-step model for revenue recognition as summarized below: 1. Identify the contract with a customer - A contract with customer exists when (i) it is approved and signed by all parties, (ii) each party’s rights and obligations can be identified, (iii) payment terms are defined, (iv) it has commercial substance and (v) the customer has the ability and intent to pay. HP evaluates customers’ ability to pay based on various factors like historical payment experience, financial metrics and customer credit scores. 2. Identify the performance obligations in the contract - HP evaluates each performance obligation in an arrangement to determine whether it represents a separate unit of accounting, such as hardware and/or service. A performance obligation constitutes a separate unit of accounting when the customer can benefit from the goods or services either on its own or together with other resources that are readily available to the customer and the performance obligation is distinct within the context of the contract. 3. Determine the transaction price - Transaction price is the amount of consideration to which HP expects to be entitled in exchange for transferring goods or services to the customer. If the transaction price includes a variable amount, HP estimates the amount it expects to be entitled to using either the expected value or most likely amount method. HP reduces the transaction price at the time of revenue recognition for customer and distributor programs and incentive offerings, rebates, promotions, other volume-based incentives and expected returns. HP uses estimates to determine the expected variable consideration for such programs based on factors like historical experience, expected consumer behavior and market conditions. HP has elected the practical expedient of not accounting for significant financing components if the period between revenue recognition and when the customer pays for the product or service is one year or less. 4. Allocate the transaction price to performance obligations in the contract - When a sales arrangement contains multiple performance obligations, such as hardware and/or services, HP allocates revenue to each performance obligation in proportion to their selling price. The selling price for each performance obligation is based on its standalone selling price (“SSP”). HP establishes SSP using the price charged for a performance obligation when sold separately (“observable price”) and, in some instances, using the price established by management having the relevant authority. When observable price is not available, HP establishes SSP based on management judgment considering internal factors such as margin objectives, pricing practices and controls, customer segment pricing strategies and the product life-cycle. Consideration is also given to market conditions such as competitor pricing strategies and technology industry life cycles. 5. Recognize revenue when (or as) the performance obligation is satisfied - Revenue is recognized when, or as, a performance obligation is satisfied by transferring control of a promised good or service to a customer. HP generally invoices the customer upon delivery of the goods or services and the payments are due as per contract terms. For fixed price support or maintenance contracts that are in the nature of stand-ready obligations, payments are generally received in advance from customers and revenue is recognized on a straight-line basis over time for the duration of the contract. HP reports revenue net of any taxes collected from customers and remitted to government authorities, and the collected taxes are recorded as other accrued liabilities until remitted to the relevant government authority. HP includes costs related to shipping and handling in cost of revenue. HP records revenue on a gross basis when HP is a principal in the transaction and on a net basis when HP is acting as an agent between the customer and the vendor. HP considers several factors to determine whether it is acting as a principal or an agent, most notably whether HP is the primary obligor to the customer, has established its own pricing and has inventory and credit risks. Hardware HP transfers control of the products to the customer at the time the product is delivered to the customer and recognizes revenue accordingly, unless customer acceptance is uncertain or significant obligations to the customer remain unfulfilled. Services HP recognizes revenue from fixed-price support, maintenance and other service contracts over time depicting the pattern of service delivery and recognizes the costs associated with these contracts as incurred. Contract Assets and Liabilities Contract assets are rights to consideration in exchange for goods or services that HP has transferred to a customer when such right is conditional on something other than the passage of time. Such contract assets are insignificant to HP’s Consolidated Condensed Financial Statements. Contract liabilities are recorded as deferred revenues when amounts invoiced to customers are more than the revenues recognized or when payments are received in advance for fixed price support or maintenance contracts. The short-term and long-term deferred revenues are reported within the other accrued liabilities and other non-current liabilities respectively. Cost to obtain a contract and fulfillment cost Incremental direct costs of obtaining a contract primarily consist of sales commissions. HP has elected the practical expedient to expense as incurred the costs to obtain a contract with a benefit period equal to or less than one year. For contracts with a period of benefit greater than one year, HP capitalizes incremental costs of obtaining a contract with a customer and amortizes these costs over their expected period of benefit provided such costs are recoverable. Fulfillment costs consist of set-up and transition costs related to other service contracts. These costs generate or enhance resources of HP that will be used in satisfying the performance obligation in the future and are capitalized and amortized over the expected period of the benefit, provided such costs are recoverable. See Note 6, “Supplementary Financial Information” for details on cost to obtain a contract and fulfillment cost, contract liabilities and value of remaining performance obligations. Transition disclosure In accordance with the modified retrospective method transition requirements, HP has presented the financial statement line items impacted and adjusted to compare to presentation under the prior GAAP for the Consolidated Condensed Balance Sheet as of April 30, 2019 and for Consolidated Condensed Statement of Earnings for three months and six months ended April 30, 2019. As of April 30, 2019 CONSOLIDATED CONDENSED BALANCE SHEET ITEMS As Reported Effect of Adoption Balances Without Adoption of Topic 606 In millions ASSETS Accounts receivable, net $ 5,414 $ (168 ) $ 5,246 Inventory 5,394 170 5,564 Other current assets 3,921 (170 ) 3,751 Other non-current assets $ 4,900 $ (30 ) $ 4,870 LIABILITIES AND STOCKHOLDERS' DEFICIT Taxes on earnings $ 206 $ 33 $ 239 Other accrued liabilities 8,042 (404 ) 7,638 Accumulated deficit $ (1,325 ) $ 173 $ (1,152 ) Three months ended April 30, 2019 Six months ended April 30, 2019 CONSOLIDATED CONDENSED STATEMENT OF EARNINGS ITEMS As Reported Effect of Adoption Balances Without Adoption of Topic 606 As Reported Effect of Adoption Balances Without Adoption of Topic 606 In millions Net revenue $ 14,036 $ (12 ) $ 14,024 $ 28,746 $ (48 ) $ 28,698 Earnings from operations 928 (12 ) 916 1,854 (48 ) 1,806 Earnings before taxes 883 (12 ) 871 1,783 (48 ) 1,735 Provision for taxes (101 ) 2 (99 ) (198 ) 9 (189 ) Net earnings $ 782 $ (10 ) $ 772 $ 1,585 $ (39 ) $ 1,546 Opening Balance Sheet Adjustments: The following table presents the adoption impact of the new accounting standards to HP’s previously reported financial statements: As Reported on Adjustments under Topic 606 Other (1) As Restated on In millions ASSETS Accounts receivable, net $ 5,113 $ 213 $ — $ 5,326 Inventory 6,062 (203 ) — 5,859 Other current assets 5,046 203 (90 ) 5,159 Other non-current assets $ 5,069 $ 33 $ (263 ) $ 4,839 LIABILITIES AND STOCKHOLDERS' DEFICIT Taxes on earnings $ 340 $ (39 ) $ — $ 301 Other accrued liabilities 7,376 497 — 7,873 Accumulated other comprehensive loss (845 ) — (2 ) (847 ) Accumulated deficit $ (473 ) $ (212 ) $ (351 ) $ (1,036 ) (1) Other includes $353 million adjustment related to Topic 740. Recently Issued Accounting Pronouncements Not Yet Adopted In February 2018, the FASB issued guidance, which eliminates the stranded tax effects in other comprehensive income resulting from the Tax Cuts and Jobs Act (the “TCJA”). Because the amendments only relate to the reclassification of the income tax effects of the TCJA, the underlying guidance that requires that the effect of a change in tax laws or rates be included in income from operations is not affected. HP is required to adopt the guidance in the first quarter of fiscal year 2020. Earlier adoption is permitted. Based on the current assessment, HP expects the adoption of this guidance will have a material impact on its Consolidated Condensed Financial Statements. In August 2017, the FASB issued guidance, which amends the existing accounting standards for derivatives and hedging. The amendment improves the financial reporting of hedging relationships to better represent the economic results of an entity’s risk management activities in its financial statements and made certain targeted improvements to simplify the application of the hedge accounting guidance in current U.S. GAAP. HP is required to adopt the guidance in the first quarter of fiscal year 2020. Earlier adoption is permitted. Based on the current assessment, HP expects that the implementation of this guidance will not have a material impact on its Consolidated Condensed Financial Statements. In June 2016, the FASB issued guidance, which requires credit losses on financial assets measured at amortized cost basis to be presented at the net amount expected to be collected, not based on incurred losses. Further, credit losses on available-for-sale debt securities should be recorded through an allowance for credit losses limited to the amount by which fair value is below amortized cost. HP is required to adopt the guidance in the first quarter of fiscal year 2021. Earlier adoption is permitted. HP is currently evaluating the timing and the impact of this guidance on the Consolidated Condensed Financial Statements. In February 2016, the FASB issued guidance, which amends the existing accounting standards for leases. Consistent with current guidance, the recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee primarily will depend on its classification. Under the new guidance, a lessee will be required to recognize assets and liabilities for all leases with lease terms of more than twelve months. HP will adopt this guidance in the first quarter of fiscal year 2020 and will apply the modified retrospective transition option made available in July 2018 by the FASB, whereby comparative periods will not be retrospectively presented in the Consolidated Condensed Financial Statements. HP is in the process of completing the evaluation of the impacts from the new lease accounting standard. Based on the current assessment, HP expects the adoption of this standard to have a material impact on the Consolidated Condensed Balance Sheet. |
Segment Information
Segment Information | 6 Months Ended |
Apr. 30, 2019 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information HP is a leading global provider of personal computing and other access devices, imaging and printing products, and related technologies, solutions and services. HP sells to individual consumers, small- and medium-sized businesses (“SMBs”) and large enterprises, including customers in the government, health and education sectors. HP’s operations are organized into three reportable segments: Personal Systems, Printing and Corporate Investments. HP’s organizational structure is based on many factors that the chief operating decision maker (“CODM”) uses to evaluate, view and run its business operations, which include, but are not limited to, customer base and homogeneity of products and technology. The segments are based on this organizational structure and information reviewed by HP’s CODM to evaluate segment results. The CODM uses several metrics to evaluate the performance of the overall business, including earnings from operations, and uses these results to allocate resources to each of the segments. A summary description of each segment is as follows: Personal Systems offers Commercial and Consumer desktop and notebook personal computers (“PCs”), Workstations, thin clients, Commercial mobility devices, retail point-of-sale (“POS”) systems, displays and other related accessories, software, support and services. HP groups Commercial notebooks, Commercial desktops, Commercial services, Commercial mobility devices, Commercial detachables and convertibles, Workstations, retail POS systems and thin clients into Commercial PCs and Consumer notebooks, Consumer desktops, Consumer services and Consumer detachables into Consumer PCs when describing performance in these markets. Described below are HP’s global business capabilities within Personal Systems: • Commercial PCs are optimized for use by customers, including enterprise, public sector and SMB customers, with a focus on robust designs, security, serviceability, connectivity, reliability and manageability in networked and cloud-based environments. Additionally, HP offers a range of services and solutions to enterprise, public sector and SMB customers to help them manage the lifecycle of their PC and mobility installed base. • Consumer PCs are optimized for consumer usage, focusing on gaming, consuming multi-media for entertainment, personal life activities, staying connected, sharing information, getting things done for work including creating content, staying informed and security. Personal Systems groups its global business capabilities into the following business units when reporting business performance: • Notebooks consists of Consumer notebooks, Commercial notebooks, Mobile workstations and Commercial mobility devices; • Desktops includes Consumer desktops, Commercial desktops, thin clients, and retail POS systems; • Workstations consists of desktop workstations and accessories; and • Other consists of Consumer and Commercial services as well as other Personal Systems capabilities. Printing provides Consumer and Commercial printer hardware, Supplies, solutions and services, as well as scanning devices. Printing is also focused on imaging solutions in the commercial and industrial markets. Described below are HP’s global business capabilities within Printing. • Office Printing Solutions delivers HP’s office printers, services and solutions to SMBs and large enterprises. It also includes some Samsung-branded and OEM hardware and solutions. HP goes to market through its extensive channel network and directly with HP sales. Ongoing key initiatives include the shift to contractual through our Managed Print Service (“MPS”) and solutions offerings for the A3 copier and multifunction printer market, printer security solutions, PageWide solutions and award-winning JetIntelligence LaserJet products. • Home Printing Solutions delivers innovative printing products and solutions for the home, home business and micro business customers utilizing both HP’s Ink and Laser technologies (including laser technology from some Samsung-branded products). Initiatives such as Instant Ink and Continuous Ink Supply System provide business model innovation to benefit and expand HP’s existing customer base, while new technologies like Photo Lifestyle and HP Smart App drive print relevance for a mobile generation. • Graphics Solutions delivers large-format, commercial and industrial solutions to print service providers and packaging converters through a wide portfolio of printers and presses (HP DesignJet, HP Latex, HP Stitch, HP Scitex, HP Indigo and HP PageWide Web Presses). Ongoing key initiatives include accelerating transformation of industrial prints from analog to digital. • 3D Printing delivers the HP Multi-Jet Fusion 3D Printing Solution designed for prototyping and production of functional parts and functioning on an open platform facilitating the development of new 3D printing materials. Printing groups its global business capabilities into the following business units when reporting business performance: • Commercial Hardware consists of Office Printing Solutions, Graphics Solutions and 3D Printing, excluding Supplies; • Consumer Hardware consists of Home Printing Solutions, excluding Supplies; and • Supplies comprises a set of highly innovative consumable products, ranging from Ink and Laser cartridges to media, graphics supplies and 3D printing supplies, for recurring use in Consumer and Commercial Hardware. Corporate Investments includes HP Labs and certain business incubation projects. The accounting policies HP uses to derive segment results are substantially the same as those used by HP in preparing these financial statements. HP derives the results of the business segments directly from its internal management reporting system. HP does not allocate certain operating expenses, which it manages at the corporate level, to its segments. These unallocated amounts include certain corporate governance costs and infrastructure investments, stock-based compensation expense, restructuring and other charges, acquisition-related charges and amortization of intangible assets. Pursuant to the adoption of ASU 2017-07 in the first quarter of fiscal year 2019, HP now reclassifies market-related retirement credits and all other components (excluding the service cost component) of net periodic benefit cost to Interest and other, net in Consolidated Condensed Statement of Earnings. HP reflected this change in prior reporting periods on an as-if basis. This adoption did not have a material impact to previously reported segment earnings from operations. Realignment Effective at the beginning of its first quarter of fiscal year 2019, HP implemented an organizational change to align its business unit financial reporting more closely with its current business structure. The organizational change resulted in the transfer of certain Samsung-branded product categories from Commercial to Consumer within the Printing segment. HP reflected this change to its business unit information in prior reporting periods on an as-if basis. The reporting change had no impact to previously reported segment net revenue, consolidated net revenue, earnings from operations, net earnings or net EPS. Segment Operating Results from Operations and the reconciliation to HP consolidated results were as follows: Three months ended April 30 Six months ended April 30 2019 2018 2019 2018 In millions Net Revenue: Personal Systems $ 8,921 $ 8,762 $ 18,578 $ 18,202 Printing 5,116 5,241 10,172 10,317 Corporate Investments — 1 1 2 Total segments $ 14,037 $ 14,004 $ 28,751 $ 28,521 Other (1 ) (1 ) (5 ) (1 ) Total net revenue $ 14,036 $ 14,003 $ 28,746 $ 28,520 Earnings before taxes: Personal Systems $ 385 $ 329 $ 795 $ 664 Printing 839 837 1,660 1,636 Corporate Investments (24 ) (21 ) (48 ) (40 ) Total segment earnings from operations $ 1,200 $ 1,145 $ 2,407 $ 2,260 Corporate and unallocated costs and other (97 ) (54 ) (177 ) (78 ) Stock-based compensation expense (66 ) (63 ) (173 ) (148 ) Restructuring and other charges (69 ) (57 ) (124 ) (88 ) Acquisition-related charges (11 ) (45 ) (21 ) (87 ) Amortization of intangible assets (29 ) (20 ) (58 ) (40 ) Interest and other, net (45 ) (823 ) (71 ) (831 ) Total earnings before taxes $ 883 $ 83 $ 1,783 $ 988 Net revenue by segment and business unit was as follows: Three months ended April 30 Six months ended April 30 2019 2018 2019 2018 In millions Notebooks $ 5,099 $ 5,153 $ 11,018 $ 10,748 Desktops 2,940 2,752 5,797 5,707 Workstations 569 538 1,131 1,081 Other 313 319 632 666 Personal Systems 8,921 8,762 18,578 18,202 Supplies 3,331 3,434 6,598 6,785 Commercial Hardware 1,179 1,145 2,269 2,182 Consumer Hardware 606 662 1,305 1,350 Printing 5,116 5,241 10,172 10,317 Corporate Investments — 1 1 2 Total segment net revenue 14,037 14,004 28,751 28,521 Other (1 ) (1 ) (5 ) (1 ) Total net revenue $ 14,036 $ 14,003 $ 28,746 $ 28,520 |
Restructuring and Other Charges
Restructuring and Other Charges | 6 Months Ended |
Apr. 30, 2019 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Other Charges | Restructuring and Other Charges Summary of Restructuring Plans HP’s restructuring activities for the six months ended April 30, 2019 and 2018 summarized by plan were as follows: Fiscal 2017 Plan Severance Infrastructure and other Other prior-year plans (1) Total In millions Accrued balance as of October 31, 2018 $ 50 $ — $ 9 $ 59 Charges 97 19 — 116 Cash payments (61 ) (8 ) (3 ) (72 ) Non-cash and other adjustments (3 ) (11 ) — (14 ) Accrued balance as of April 30, 2019 $ 83 $ — $ 6 $ 89 Total costs incurred to date as of April 30, 2019 $ 350 $ 100 $ 1,317 $ 1,767 Reflected in Consolidated Condensed Balance Sheets Other accrued liabilities 83 — 5 88 Other non-current liabilities — — 1 1 Accrued balance as of October 31, 2017 76 19 13 108 Charges 52 12 — 64 Cash payments (86 ) (31 ) (3 ) (120 ) Non-cash and other adjustments — — 1 1 Accrued balance as of April 30, 2018 $ 42 $ — $ 11 $ 53 HP’s restructuring charges for the three months ended April 30, 2019 summarized by the plans outlined below were as follows: Fiscal 2017 Plan Severance Infrastructure and other Other prior-year plans (1) Total In millions For the three months ended April 30, 2019 $ 50 $ 13 $ — $ 63 (1) Includes prior-year plans which are considered substantially complete. HP does not expect any further material activity associated with these plans. Fiscal 2017 Plan On October 10, 2016, HP’s Board of Directors approved a restructuring plan (the “Fiscal 2017 Plan”), which HP expected would be implemented through fiscal year 2019. On May 26, 2018, HP’s Board of Directors approved amending the Fiscal 2017 Plan. HP expects approximately 4,500 to 5,000 employees to exit by the end of fiscal year 2019. HP estimates that it will incur aggregate pre-tax charges of approximately $700 million relating to labor and non-labor actions. HP estimates that approximately half of the expected cumulative pre-tax costs will relate to severance and the remaining costs will relate to infrastructure, non-labor actions and other charges. Other Charges Other charges include non-recurring costs, including those as a result of Separation, and are distinct from ongoing operational costs. These costs primarily relate to information technology costs such as advisory, consulting and non-recurring labor costs. For the three and six months ended April 30, 2019 , HP incurred $6 million and $8 million of other charges, respectively. For the three and six months ended April 30, 2018, HP incurred $11 million and $24 million of other charges, respectively. |
Retirement and Post-Retirement
Retirement and Post-Retirement Benefit Plans | 6 Months Ended |
Apr. 30, 2019 | |
Retirement Benefits [Abstract] | |
Retirement and Post-Retirement Benefit Plans | Retirement and Post-Retirement Benefit Plans The components of HP’s pension and post-retirement (credit) benefit cost recognized in the Consolidated Condensed Statements of Earnings were as follows: Three months ended April 30 U.S. Defined Benefit Plans Non-U.S. Defined Benefit Plans Post-Retirement Benefit Plans 2019 2018 2019 2018 2019 2018 In millions Service cost $ — $ — $ 15 $ 14 $ — $ — Interest cost 123 113 6 6 4 4 Expected return on plan assets (146 ) (179 ) (9 ) (10 ) (5 ) (6 ) Amortization and deferrals: Actuarial loss (gain) 15 16 8 7 (8 ) (4 ) Prior service benefit — — — (1 ) (3 ) (5 ) Net periodic (credit) benefit cost (8 ) (50 ) 20 16 (12 ) (11 ) Settlement loss 1 — — — — — Total periodic (credit) benefit cost $ (7 ) $ (50 ) $ 20 $ 16 $ (12 ) $ (11 ) Six months ended April 30 U.S. Defined Benefit Plans Non-U.S. Defined Benefit Plans Post- Retirement Benefit Plans 2019 2018 2019 2018 2019 2018 In millions Service cost $ — $ — $ 29 $ 28 $ — $ — Interest cost 246 226 12 12 8 8 Expected return on plan assets (291 ) (360 ) (19 ) (20 ) (10 ) (12 ) Amortization and deferrals: Actuarial loss (gain) 30 31 16 14 (16 ) (8 ) Prior service benefit — — (1 ) (2 ) (6 ) (10 ) Net periodic (credit) benefit cost (15 ) (103 ) 37 32 (24 ) (22 ) Settlement loss 1 1 — — — — Total periodic (credit) benefit cost (14 ) (102 ) 37 32 (24 ) (22 ) Employer Contributions and Funding Policy HP’s policy is to fund its pension plans so that it makes at least the minimum contribution required by local government, funding and taxing authorities. During fiscal year 2019 , HP anticipates making contributions of approximately $46 million to its non-U.S. pension plans, approximately $32 million to its U.S. non-qualified plan participants and approximately $6 million to cover benefit claims under HP’s post-retirement benefit plans. During the six months ended April 30, 2019 , HP contributed $15 million to its non-U.S. pension plans, paid $17 million to cover benefit payments to U.S. non-qualified plan participants. HP’s pension and other post-retirement benefit costs and obligations depend on various assumptions. Differences between expected and actual returns on investments and changes in discount rates and other actuarial assumptions are reflected as unrecognized gains or losses, and such gains or losses are amortized to earnings in future periods. A deterioration in the funded status of a plan could result in a need for additional company contributions or an increase in net pension and post-retirement benefit costs in future periods. Actuarial gains or losses are determined at the measurement date and amortized over the remaining service life for active plans or the life expectancy of plan participants for frozen plans. |
Taxes on Earnings
Taxes on Earnings | 6 Months Ended |
Apr. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Taxes on Earnings | Taxes on Earnings Provision for Taxes On December 22, 2017, the TCJA was enacted into law. Given the significance of the legislation, the SEC staff issued Staff Accounting Bulletin No. 118 (SAB 118) in December 2017, which allows registrants to record provisional amounts during a one year “measurement period”. As of January 31, 2019 , HP had completed its accounting for the tax effects of the TCJA with no material changes to the provisional amounts recorded during the measurement period. In January 2018, the FASB released guidance on the accounting for tax on the Global Minimum Tax provisions of TCJA. The Global Minimum Tax provisions impose a tax on foreign income in excess of a deemed return on tangible assets of foreign corporations. The guidance indicates that either accounting for deferred taxes related to Global Minimum Tax inclusions or to treat any taxes on Global Minimum Tax inclusions as period cost are both acceptable methods subject to an accounting policy election. HP has elected to treat the Global Minimum Tax inclusions as period costs. HP’s effective tax rate was 11.4% and (1,162)% for the three months ended April 30, 2019 and 2018 , respectively, and 11.1% and (203)% for the six months ended April 30, 2019 and 2018 , respectively. The difference between the U.S. federal statutory tax rate of 21% and HP’s effective tax rate for the three and six months ended April 30, 2019 is primarily due to favorable tax rates associated with certain earnings from HP’s operations in lower-tax jurisdictions throughout the world. For the three and six months ended April 30, 2018 HP’s effective tax rate generally differs from the U.S. federal statutory rate of 23% due to the transitional impacts of U.S. tax reform and resolution of various audits and tax litigation, partially offset by favorable tax rates associated with certain earnings from HP’s operations in lower-tax jurisdictions throughout the world. During the three and six months ended April 30, 2019, HP recorded $40 million and $49 million , respectively, of net tax benefits related to discrete items in the provision for taxes. These amounts included tax benefits of $42 million and $48 million related to one-time items for the three and six months ended April 30, 2019, respectively, and $14 million and $26 million related to restructuring charges for the three and six months ended April 30, 2019, respectively. These benefits were partially offset by uncertain tax position charges of $12 million and $32 million for the three and six months ended April 30, 2019, respectively, and other charges of $4 million and $14 million for the three and six months ended April 30, 2019, respectively. The six months ended April 30, 2019 also included a tax benefit of $21 million related to final tax reform adjustments. In addition to the discrete items mentioned above, HP recorded $20 million of excess tax benefits associated with stock options, restricted stock units and performance-adjusted restricted stock units for the six months ended April 30, 2019. During the three and six months ended April 30, 2018 , HP recorded $1.1 billion and $2.2 billion , respectively, of net tax benefits related to discrete items in the provision for taxes. As of April 30, 2018, HP had not yet completed its analysis of the full impact of TCJA. However, for the three months ended January 31, 2018, HP recorded a provisional tax benefit of $1.1 billion related to $5.5 billion net benefit for the decrease in our deferred tax liability on unremitted foreign earnings, partially offset by $3.2 billion net expense for the deemed repatriation tax payable in installments over eight years and $1.2 billion net expense for remeasurement of its deferred tax assets and liabilities for the revaluation of its deferred assets and liabilities to the new U.S. statutory tax rate. In addition, for the three months ended April 30, 2018, HP recorded provisional tax expense of $379 million related to remeasurement of its U.S. deferred tax assets that were expected to be realized at a lower rate and a $43 million tax benefit as an adjustment to the provisional deemed repatriation tax amount due to further analysis and additional guidance. This amount also included tax benefits related to audit settlements of $1.4 billion and $1.5 billion for the three and six months ended April 30, 2018, respectively, and loss on extinguishment of debt of $33 million for the three and six months ended April 30, 2018. These tax benefits were offset by uncertain tax position charges of $8 million and $51 million for the three and six months ended April 30, 2018, respectively. During the three and six months ended April 30, 2018, in addition to the discrete items mentioned above, HP recorded excess tax benefits of $6 million and $34 million , respectively, on stock options, restricted stock units and performance-adjusted restricted stock units. Uncertain Tax Positions As of April 30, 2019 , the amount of gross unrecognized tax benefits was $7.8 billion , of which up to $1.5 billion would affect HP’s effective tax rate if and when realized. There were no material changes to the amount of gross unrecognized tax benefits for the six months ended April 30, 2019 . HP recognizes interest income from favorable settlements and interest expense and penalties accrued on unrecognized tax benefits in the provision for taxes in the Consolidated Condensed Statements of Earnings. As of April 30, 2019 and 2018, HP had accrued $193 million and $141 million , respectively, for interest and penalties. HP engages in continuous discussions and negotiations with taxing authorities regarding tax matters in various jurisdictions. HP expects to complete resolution of certain tax years with various tax authorities within the next 12 months . It is also possible that other federal, foreign and state tax issues may be concluded within the next 12 months . HP believes it is reasonably possible that its existing gross unrecognized tax benefits may be reduced by up to $6.4 billion within the next 12 months of which up to $706 million would affect HP’s effective tax rate if and when realized. HP is subject to income tax in the United States and approximately 60 other countries and is subject to routine corporate income tax audits in many of these jurisdictions. In addition, HP is subject to numerous ongoing audits by federal, state and foreign tax authorities. The U.S. Internal Revenue Service is conducting an audit of HP’s 2013 through 2016 income tax returns. |
Supplementary Financial Informa
Supplementary Financial Information | 6 Months Ended |
Apr. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Supplementary Financial Information | Supplementary Financial Information Accounts Receivable, net As of April 30, 2019 October 31, 2018 In millions Accounts receivable $ 5,526 $ 5,242 Allowance for doubtful accounts (112 ) (129 ) $ 5,414 $ 5,113 The allowance for doubtful accounts related to accounts receivable and changes were as follows: Six months ended April 30, 2019 In millions Balance at beginning of period $ 129 Provision for doubtful accounts 24 Deductions, net of recoveries (41 ) Balance at end of period $ 112 HP has third-party arrangements, consisting of revolving short-term financing, which provide liquidity to certain partners in order to facilitate their working capital requirements. These financing arrangements, which in certain circumstances may contain partial recourse, result in a transfer of HP’s receivables and risk to the third party. As these transfers qualify as true sales under the applicable accounting guidance, the receivables are de-recognized from the Consolidated Condensed Balance Sheets upon transfer, and HP receives a payment for the receivables from the third party within a mutually agreed upon time period. For arrangements involving an element of recourse, the recourse obligation is measured using market data from the similar transactions and reported as a current liability in the Consolidated Condensed Balance Sheets. The recourse obligations as of April 30, 2019 and October 31, 2018 were not material. The costs associated with the sales of trade receivables for the three months ended April 30, 2019 and 2018 were not material. The following is a summary of the activity under these arrangements: Three months ended April 30 Six months ended April 30 2019 2018 2019 2018 In millions Balance at beginning of period (1) $ 194 $ 172 $ 165 $ 147 Trade receivables sold 2,490 2,434 5,525 5,370 Cash receipts (2,498 ) (2,430 ) (5,507 ) (5,351 ) Foreign currency and other (4 ) (5 ) (1 ) 5 Balance at end of period (1) $ 182 $ 171 $ 182 $ 171 (1) Amounts outstanding from third parties reported in Accounts Receivable, net in the Consolidated Condensed Balance Sheets. Inventory As of April 30, 2019 October 31, 2018 In millions Finished goods $ 3,544 $ 4,019 Purchased parts and fabricated assemblies 1,850 2,043 $ 5,394 $ 6,062 Other Current Assets As of April 30, 2019 October 31, 2018 In millions Supplier and other receivables $ 1,822 $ 2,025 Prepaid and other current assets 1,216 1,445 Value-added taxes receivable 866 865 Available-for-sale investments (1) 17 711 $ 3,921 $ 5,046 (1) See Note 8, “Financial Instruments” for detailed information. Property, Plant and Equipment, net As of April 30, 2019 October 31, 2018 In millions Land, buildings and leasehold improvements $ 1,965 $ 1,893 Machinery and equipment, including equipment held for lease 4,540 4,216 6,505 6,109 Accumulated depreciation (4,093 ) (3,911 ) $ 2,412 $ 2,198 Other Non-Current Assets As of April 30, 2019 October 31, 2018 In millions Deferred tax assets $ 2,288 $ 2,431 Tax indemnifications receivable 868 953 Intangible assets (1) 701 453 Other (2) 1,043 1,232 $ 4,900 $ 5,069 (1) See Note 15, “Intangible Assets” for detailed information. (2) Includes marketable equity securities and mutual funds classified as available-for-sale investments of $54 million and $53 million as of April 30, 2019 and October 31, 2018, respectively. See Note 8, “Financial Instruments” for detailed information Other Accrued Liabilities As of April 30, 2019 October 31, 2018 In millions Sales and marketing programs $ 3,104 $ 2,758 Deferred revenue 1,138 1,095 Other accrued taxes 916 982 Warranty 657 673 Other 2,227 1,868 $ 8,042 $ 7,376 Other Non-Current Liabilities As of April 30, 2019 October 31, 2018 In millions Tax liability $ 1,978 $ 2,063 Pension, post-retirement, and post-employment liabilities 1,586 1,645 Deferred revenue 1,026 1,005 Deferred tax liability 52 100 Other 839 793 $ 5,481 $ 5,606 Interest and Other, net Three months ended April 30 Six months ended April 30 2019 2018 2019 2018 In millions Tax indemnifications (1) $ 5 $ (671 ) $ 15 $ (673 ) Loss on extinguishment of debt — (126 ) — (126 ) Interest expense on borrowings (61 ) (88 ) (125 ) (175 ) Other, net 11 62 39 143 $ (45 ) $ (823 ) $ (71 ) $ (831 ) (1) For the three and six months ended April 30, 2018, includes an adjustment of $671 million of indemnification receivable, pursuant to resolution of various income tax audit settlements. See Note 13, “Guarantees, Indemnifications and Warranties” for further information. Net revenue by region Three months ended April 30 Six months ended April 30 2019 2018 2019 2018 In millions Americas $ 5,785 $ 5,929 $ 11,817 $ 12,164 Europe, Middle East and Africa 5,110 5,139 10,468 10,360 Asia-Pacific and Japan 3,141 2,935 6,461 5,996 Total net revenue $ 14,036 $ 14,003 $ 28,746 $ 28,520 Value of Remaining Performance Obligations As of April 30, 2019, the estimated value of transaction price allocated to remaining performance obligations was $4.4 billion . HP expects to recognize approximately $1.8 billion of the unearned amount in next 12 months and $2.6 billion thereafter. HP has elected the practical expedients and accordingly does not disclose the aggregate amount of the transaction price allocated to remaining performance obligations if: • the contract has an original expected duration of one year or less; or • the revenue from the performance obligation is recognized over time on an as-invoiced basis when the amount corresponds directly with the value to the customer; or • the portion of the transaction price that is variable in nature is allocated entirely to a wholly unsatisfied performance obligation. The remaining performance obligations are subject to change and may be affected by various factors, such as termination of contracts, contract modifications and adjustment for currency. Costs of Obtaining Contracts As of April 30, 2019, deferred contract fulfillment and acquisition costs balances were $40 million and $35 million , included in Other Current Assets and Other Non-Current Assets, respectively, in the Consolidated Condensed Balance Sheet. During the six months ended April 30, 2019, the Company amortized $43 million of these costs. Contract Liabilities As of April 30, 2019 and October 31, 2018, HP’s contract liabilities balances were $2.0 billion and $1.9 billion , included in Other Current Liabilities and Other Non-Current Liabilities, respectively, in the Consolidated Condensed Balance Sheet. The increase in the contract liabilities balance for the six months ended April 30, 2019 is primarily driven by sales of fixed price support and maintenance services, partially offset by $526 million of revenue recognized that were included in the opening contract liabilities balance as of November 1, 2018. |
Fair Value
Fair Value | 6 Months Ended |
Apr. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value | Fair Value Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date. Fair Value Hierarchy HP uses valuation techniques that are based upon observable and unobservable inputs. Observable inputs are developed using market data such as publicly available information and reflect the assumptions market participants would use, while unobservable inputs are developed using the best information available about the assumptions market participants would use. Assets and liabilities are classified in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement: Level 1—Quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2—Quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability and market-corroborated inputs. Level 3—Unobservable inputs for the asset or liability. The fair value hierarchy gives the highest priority to observable inputs and lowest priority to unobservable inputs. The following table presents HP’s assets and liabilities that are measured at fair value on a recurring basis: As of April 30, 2019 As of October 31, 2018 Fair Value Measured Using Fair Value Measured Using Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total In millions Assets: Cash Equivalents: Corporate debt $ — $ 1,272 $ — $ 1,272 $ — $ 1,620 $ — $ 1,620 Financial institution instruments — — — — — 9 — 9 Government debt (1) 1,231 9 — 1,240 2,217 150 — 2,367 Available-for-Sale Investments: Corporate debt — 12 — 12 — 366 — 366 Financial institution instruments — — — — — 32 — 32 Government debt (1) — 5 — 5 — 313 — 313 Mutual funds 48 — — 48 47 — — 47 Marketable equity securities 6 — — 6 6 — — 6 Derivative Instruments: Foreign currency contracts — 429 — 429 — 508 7 515 Other derivatives — 2 — 2 — — — — Total Assets $ 1,285 $ 1,729 $ — $ 3,014 $ 2,270 $ 2,998 $ 7 $ 5,275 Liabilities: Derivative Instruments: Interest rate contracts $ — $ 8 $ — $ 8 $ — $ 23 $ — $ 23 Foreign currency contracts — 146 — 146 — 164 — 164 Other derivatives — — — — — 8 — 8 Total Liabilities $ — $ 154 $ — $ 154 $ — $ 195 $ — $ 195 (1) Government debt includes instruments such as U.S. treasury notes, U.S agency securities and non-U.S. government bonds. Money market funds invested in government debt and traded in active markets are included in Level 1. There were no transfers between levels within the fair value hierarchy during the six months ended April 30, 2019 . Valuation Techniques Cash Equivalents and Investments: HP holds time deposits, money market funds, mutual funds, other debt securities primarily consisting of corporate and government notes and bonds, and common stock and equivalents. HP values cash equivalents and equity investments using quoted market prices, alternative pricing sources, including net asset value, or models utilizing market observable inputs. The fair value of debt investments 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. Derivative Instruments: From time to time, HP uses forward contracts, interest rate and total return swaps and, in the past, option contracts to hedge certain foreign currency interest rate and return on certain investment exposures. HP uses industry standard valuation models to measure fair value. Where applicable, these models project future cash flows and discount the future amounts to present value using market-based observable inputs, including interest rate curves, HP and counterparty credit risk, foreign exchange rates, and forward and spot prices for currencies and interest rates. See Note 8, “Financial Instruments” for a further discussion of HP’s use of derivative instruments. Other Fair Value Disclosures Short- and Long-Term Debt: HP estimates the fair value of its debt primarily using an expected present value technique, which is based on observable market inputs using interest rates currently available to companies of similar credit standing for similar terms and remaining maturities and considering its own credit risk. The portion of HP’s debt that is hedged is reflected in the Consolidated Condensed Balance Sheets as an amount equal to the debt’s carrying amount and a fair value adjustment representing changes in the fair value of the hedged debt obligations arising from movements in benchmark interest rates. The fair value of HP’s short- and long-term debt was $5.2 billion as of April 30, 2019 , compared to its carrying amount of $5.0 billion at that date. The fair value of HP’s short- and long-term debt was $6.0 billion as of October 31, 2018, compared to its carrying value of $6.0 billion at that date. If measured at fair value in the Consolidated Condensed Balance Sheets, short- and long-term debt would be classified in Level 2 of the fair value hierarchy. Other Financial Instruments: For the balance of HP’s financial instruments, primarily accounts receivable, accounts payable and financial liabilities included in Other accrued liabilities on the Consolidated Condensed Balance Sheets, the carrying amounts approximate fair value due to their short maturities. If measured at fair value in the Consolidated Condensed Balance Sheets, these other financial instruments would be classified in Level 2 or Level 3 of the fair value hierarchy. Non-Marketable Equity Investments and Non-Financial Assets: HP’s non-marketable equity investments are measured at cost less impairment, adjusted for observable price changes . HP’s non-financial assets, such as intangible assets, goodwill and property, plant and equipment, are recorded at fair value in the period an impairment charge is recognized. If measured at fair value in the Consolidated Condensed Balance Sheets these would generally be classified within Level 3 of the fair value hierarchy. |
Financial Instruments
Financial Instruments | 6 Months Ended |
Apr. 30, 2019 | |
Investments, All Other Investments [Abstract] | |
Financial Instruments | Financial Instruments Cash Equivalents and Available-for-Sale Investments As of April 30, 2019 As of October 31, 2018 Cost Gross Unrealized Gain Gross Unrealized Loss Fair Value Cost Gross Unrealized Gain Gross Unrealized Loss Fair Value In millions Cash Equivalents: Corporate debt $ 1,272 $ — $ — $ 1,272 $ 1,620 $ — $ — $ 1,620 Financial institution instruments — — — — 9 — — 9 Government debt 1,240 — — 1,240 2,367 — — 2,367 Total cash equivalents 2,512 — — 2,512 3,996 — — 3,996 Available-for-Sale Investments: Corporate debt (1) 12 — — 12 368 — (2 ) 366 Financial institution instruments (1) — — — — 32 — — 32 Government debt (1) 5 — — 5 314 — (1 ) 313 Marketable equity securities 4 2 — 6 4 2 — 6 Mutual funds 39 9 — 48 38 9 — 47 Total available-for-sale investments 60 11 — 71 756 11 (3 ) 764 Total cash equivalents and available-for-sale investments $ 2,572 $ 11 $ — $ 2,583 $ 4,752 $ 11 $ (3 ) $ 4,760 (1) HP classifies its marketable debt securities as available-for-sale investments within Other current assets on the Consolidated Condensed Balance Sheets, including those with maturity dates beyond one year, based on their highly liquid nature and availability for use in current operations. All highly liquid investments with original maturities of three months or less at the date of acquisition are considered cash equivalents. As of April 30, 2019 and October 31, 2018 , the carrying amount of cash equivalents approximated fair value due to the short period of time to maturity. The estimated fair value of the available-for-sale investments may not be representative of values that will be realized in the future. Contractual maturities of investments in available-for-sale debt securities were as follows: As of April 30, 2019 Amortized Fair Value In millions Due in one year or less $ 17 $ 17 Equity securities in privately held companies are included in Other non-current assets on the Consolidated Condensed Balance Sheets. These amounted to $49 million and $36 million as of April 30, 2019 and October 31, 2018, respectively. Derivative Instruments HP uses derivatives to offset business exposure to foreign currency and interest rate risk on expected future cash flows and on certain existing assets and liabilities. As part of its risk management strategy, HP uses derivative instruments, primarily forward contracts, interest rate swaps, total return swaps and, at times, option contracts to hedge certain foreign currency, interest rate and, return on certain investment exposures. HP may designate its derivative contracts as fair value hedges or cash flow hedges and classifies the cash flows with the activities that correspond to the underlying hedged items. Additionally, for derivatives not designated as hedging instruments, HP categorizes those economic hedges as other derivatives. HP recognizes all derivative instruments at fair value in the Consolidated Condensed Balance Sheets. As a result of its use of derivative instruments, HP is exposed to the risk that its counterparties will fail to meet their contractual obligations. Master netting agreements mitigate credit exposure to counterparties by permitting HP to net amounts due from HP to counterparty against amounts due to HP from the same counterparty under certain conditions. To further limit credit risk, HP has collateral security agreements that allow HP’s custodian to hold collateral from, or require HP to post collateral to, counterparties when aggregate derivative fair values exceed contractually established thresholds which are generally based on the credit ratings of HP and its counterparties. If HP’s or the counterparty’s credit rating falls below a specified credit rating, either party has the right to request full collateralization of the derivatives’ net liability position. The fair value of derivatives with credit contingent features in a net liability position was $56 million and $68 million as of April 30, 2019 and as of October 31, 2018 , respectively, all of which were fully collateralized within two business days. Under HP’s derivative contracts, the counterparty can terminate all outstanding trades following a covered change of control event affecting HP that results in the surviving entity being rated below a specified credit rating. This credit contingent provision did not affect HP’s financial position or cash flows as of April 30, 2019 and October 31, 2018 . Fair Value Hedges HP enters into fair value hedges, such as interest rate swaps, to reduce the exposure of its debt portfolio to changes in fair value resulting from changes in interest rates by achieving a primarily U.S. dollar London Interbank Offered Rate (“LIBOR”)-based floating interest expense. For derivative instruments that are designated and qualify as fair value hedges, HP recognizes the change in fair value of the derivative instrument, as well as the offsetting change in the fair value of the hedged item, in Interest and other, net on the Consolidated Condensed Statements of Earnings in the period of change. Cash Flow Hedges HP uses forward contracts and at times, option 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 revenue, operating expenses, and intercompany loans denominated in currencies other than the U.S. dollar. HP’s foreign currency cash flow hedges mature predominantly within twelve months . However, hedges related to longer-term procurement arrangements extend several years and forward contracts associated with intercompany loans extend for the duration of the loan term, which typically range from two to five years. For derivative instruments that are designated and qualify as cash flow hedges, HP initially records changes in fair value for the effective portion of the derivative instrument in accumulated other comprehensive loss as a separate component of stockholders’ deficit on the Consolidated Condensed Balance Sheets and subsequently reclassifies these amounts into earnings in the period during which the hedged transaction is recognized in earnings. HP reports the effective portion of its cash flow hedges in the same financial statement line item as changes in the fair value of the hedged item. Other Derivatives Other derivatives not designated as hedging instruments consist primarily of forward contracts used to hedge foreign currency-denominated balance sheet exposures. HP uses total return swaps to hedge its executive deferred compensation plan liability. For derivative instruments not designated as hedging instruments, HP recognizes changes in fair value of the derivative instrument, as well as the offsetting change in the fair value of the hedged item, in Interest and other, net in the Consolidated Condensed Statements of Earnings in the period of change. Hedge Effectiveness For interest rate swaps designated as fair value hedges, HP measures hedge effectiveness by offsetting the change in fair value of the hedged item with the change in fair value of the derivative. For foreign currency options and forward contracts designated as cash flow hedges, HP measures hedge effectiveness by comparing the cumulative change in fair value of the hedge contract with the cumulative change in fair value of the hedged item, both of which are based on forward rates. HP recognizes any ineffective portion of the hedge in the Consolidated Condensed Statements of Earnings in the same period in which ineffectiveness occurs. Amounts excluded from the assessment of effectiveness are recognized in the Consolidated Condensed Statements of Earnings in the period they arise. As of April 30, 2019 and 2018, no portion of the hedging instruments’ gain or loss was excluded from the assessment of effectiveness for fair value and cash flow hedges. Hedge ineffectiveness for fair value and cash flow hedges recognized in earnings were not material for the three and six months ended April 30, 2019 and 2018. Fair Value of Derivative Instruments in the Consolidated Condensed Balance Sheets The gross notional and fair value of derivative instruments in the Consolidated Condensed Balance Sheets were as follows: As of April 30, 2019 As of October 31, 2018 Outstanding Gross Notional Other Current Assets Other Non-Current Assets Other Accrued Liabilities Other Non-Current Liabilities Outstanding Gross Notional Other Current Assets Other Non-Current Assets Other Accrued Liabilities Other Non-Current Liabilities In millions Derivatives designated as hedging instruments Fair value hedges: Interest rate contracts $ 750 $ — $ — $ — $ 8 $ 1,000 $ — $ — $ — $ 23 Cash flow hedges: Foreign currency contracts 16,182 283 129 99 42 17,147 386 107 86 52 Total derivatives designated as hedging instruments 16,932 283 129 99 50 18,147 386 107 86 75 Derivatives not designated as hedging instruments Foreign currency contracts 5,764 17 — 5 — 5,437 22 — 26 — Other derivatives 127 2 — — — 122 — — 8 — Total derivatives not designated as hedging instruments 5,891 19 — 5 — 5,559 22 — 34 — Total derivatives $ 22,823 $ 302 $ 129 $ 104 $ 50 $ 23,706 $ 408 $ 107 $ 120 $ 75 Offsetting of Derivative Instruments HP recognizes all derivative instruments on a gross basis in the Consolidated Condensed Balance Sheets. HP does not offset the fair value of its derivative instruments against the fair value of cash collateral posted under its collateral security agreements. As of April 30, 2019 and October 31, 2018 , information related to the potential effect of HP’s master netting agreements and collateral security agreements was as follows: In the Consolidated Condensed Balance Sheets Gross Amounts Not Offset Gross Amount Recognized (i) Gross Amount Offset (ii) Net Amount Presented (iii) = (i)–(ii) Derivatives (iv) Financial Collateral (v) Net Amount (vi) = (iii)–(iv)–(v) In millions As of April 30, 2019 Derivative assets $ 431 $ — $ 431 $ 97 $ 312 (1) $ 22 Derivative liabilities $ 154 $ — $ 154 $ 97 $ 52 (2) $ 5 As of October 31, 2018 Derivative assets $ 515 $ — $ 515 $ 112 $ 299 (1) $ 104 Derivative liabilities $ 195 $ — $ 195 $ 112 $ 69 (2) $ 14 (1) Represents the cash collateral posted by counterparties as of the respective reporting date for HP’s asset position, net of derivative amounts that could be offset, as of, generally, two business days prior to the respective reporting date. (2) Represents the collateral posted by HP through re-use of counterparty cash collateral as of the respective reporting date for HP’s liability position, net of derivative amounts that could be offset, as of, generally, two business days prior to the respective reporting date. Effect of Derivative Instruments in the Consolidated Condensed Statements of Earnings Interest rate swaps agreements are designated as hedge relationships with gains or losses on the derivative recognized in interest and other financial charges offsetting the gains and losses on the underlying debt being hedged. Gain on interest rate swap agreements recognized in earnings was $4 million for the three months ended April 30, 2019 and $29 million for the three months ended April 30, 2018. Gain on interest rate swap agreements recognized in earnings was $16 million for the six months ended April 30, 2019 and loss of $11 million for the six months ended April 30, 2018. Gains and losses are fully offset by changes in the fair value of the debt being hedged. The pre-tax effect of derivative instruments in cash flow hedging relationships for the three and six months ended April 30, 2019 was as follows: Gain Recognized in Other Comprehensive Income ("OCI") on Derivatives (Effective Portion) (Loss) Gain Reclassified from Accumulated OCI Into Three months ended April 30, 2019 Six months ended April 30, 2019 Location Three months ended April 30, 2019 Six months ended April 30, 2019 In millions In millions Cash flow hedges: Foreign currency contracts $ 198 $ 91 Net revenue $ — $ 191 Cost of revenue (6 ) (16 ) Operating expenses — (2 ) Total $ 198 $ 91 $ (6 ) $ 173 The pre-tax effect of derivative instruments in cash flow hedging relationships for the three and six months ended April 30, 2018 was as follows: Gain (Loss) Recognized in Other Comprehensive Income ("OCI") on Derivatives (Effective Portion) (Loss) Gain Reclassified from Accumulated OCI Into Three months ended April 30, 2018 Six months ended April 30, 2018 Location Three months ended April 30, 2018 Six months ended April 30, 2018 In millions In millions Cash flow hedges: Foreign currency contracts $ 297 $ (254 ) Net revenue $ (277 ) $ (329 ) Cost of revenue — (18 ) Operating expenses 1 1 Total $ 297 $ (254 ) $ (276 ) $ (346 ) As of April 30, 2019, HP expects to reclassify an estimated accumulated other comprehensive gain of $141 million , net of taxes, to earnings within the next twelve months associated with cash flow hedges along with the earnings effects of the related forecasted transactions. The amounts ultimately reclassified into earnings could be different from the amounts previously included in accumulated OCI based on the change of market rate, and therefore could have a different impact on earnings. The pre-tax effect of derivative instruments not designated as hedging instruments recognized in Interest and Other, net in the Consolidated Condensed Statements of Earnings for the three and six months ended April 30, 2019 and 2018 was as follows: Three months ended April 30 Six months ended April 30 2019 2018 2019 2018 In millions Foreign currency contracts $ (18 ) $ 8 $ (58 ) $ (9 ) Other derivatives 5 (2 ) 19 — Total $ (13 ) $ 6 $ (39 ) $ (9 ) |
Borrowings
Borrowings | 6 Months Ended |
Apr. 30, 2019 | |
Debt Disclosure [Abstract] | |
Borrowings | Borrowings Notes Payable and Short-Term Borrowings As of April 30, 2019 As of October 31, 2018 Amount Weighted-Average Amount Weighted-Average In millions In millions Commercial paper $ — — % $ 854 2.5 % Current portion of long-term debt 252 3.7 % 565 3.1 % Notes payable to banks, lines of credit and other 38 1.9 % 44 1.7 % $ 290 $ 1,463 Long-Term Debt As of April 30, 2019 October 31, 2018 In millions U.S. Dollar Global Notes (1) 2009 Shelf Registration Statement: $1,350 issued at discount to par at a price of 99.827% in December 2010 at 3.75%, due December 2020 $ 648 $ 648 $1,250 issued at discount to par at a price of 99.799% in May 2011 at 4.3%, due June 2021 667 667 $1,000 issued at discount to par at a price of 99.816% in September 2011 at 4.375%, due September 2021 538 538 $1,500 issued at discount to par at a price of 99.707% in December 2011 at 4.65%, due December 2021 695 694 $500 issued at discount to par at a price of 99.771% in March 2012 at 4.05%, due September 2022 499 499 $1,200 issued at discount to par at a price of 99.863% in September 2011 at 6.0%, due September 2041 1,199 1,199 2012 Shelf Registration Statement: $750 issued at par in January 2014 at three-month USD LIBOR plus 0.94%, due January 2019 — 102 $1,250 issued at discount to par at a price of 99.954% in January 2014 at 2.75%, due January 2019 — 300 4,246 4,647 Other, including capital lease obligations, at 0.51%-8.47%, due in calendar years 2019-2029 782 487 Fair value adjustment related to hedged debt (11 ) (28 ) Unamortized debt issuance cost (16 ) (17 ) Current portion of long-term debt (252 ) (565 ) Total long-term debt $ 4,749 $ 4,524 (1) HP may redeem some or all of the fixed-rate U.S. Dollar Global Notes at any time in accordance with the terms thereof. The U.S. Dollar Global Notes are senior unsecured debt. In December 2016, HP filed a shelf registration statement (the “2016 Shelf Registration Statement”) with the SEC to enable the company to offer for sale, from time to time, in one or more offerings, an unspecified amount of debt securities, common stock, preferred stock, depositary shares and warrants. As disclosed in Note 8, “Financial Instruments”, HP uses interest rate swaps to mitigate some of the exposure of its debt portfolio to changes in fair value resulting from changes in interest rates by achieving a primarily U.S. dollar LIBOR-based floating interest expense. Interest rates shown in the table of long-term debt have not been adjusted to reflect the impact of any interest rate swaps. Commercial Paper As of April 30, 2019 , HP maintained two commercial paper programs. HP’s U.S. program provides for the issuance of U.S. dollar-denominated commercial paper up to a maximum aggregate principal amount of $6.0 billion . HP’s euro commercial paper program provides for the issuance of commercial paper outside of the United States denominated in U.S. dollars, euros or British pounds up to a maximum aggregate principal amount of $6.0 billion or the equivalent in those alternative currencies. The combined aggregate principal amount of commercial paper outstanding under those programs at any one time cannot exceed the $6.0 billion authorized by HP’s Board of Directors. Credit Facility As of April 30, 2019 , HP maintained a $4.0 billion , senior unsecured committed revolving credit facility to support the issuance of commercial paper or for general corporate purposes. Commitments under the revolving credit facility will be available until March 30, 2023. Commitment fees, interest rates and other terms of borrowing under the credit facility vary based on HP’s external credit ratings. As of April 30, 2019 , HP was in compliance with the financial covenants in the credit agreement governing the revolving credit facility. Available Borrowing Resources As of April 30, 2019 , HP and its subsidiaries had available borrowing resources of $730 million from uncommitted lines of credit in addition to the commercial paper and revolving credit facility discussed above. |
Stockholders' Deficit
Stockholders' Deficit | 6 Months Ended |
Apr. 30, 2019 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Deficit | Stockholders’ Deficit Share Repurchase Program HP’s share repurchase program authorizes both open market and private repurchase transactions. During the three and six months ended April 30, 2019 , HP executed share repurchases of 34 million shares and 66 million shares and settled total shares for $0.7 billion and $1.4 billion , respectively. During the three and six months ended April 30, 2018 , HP executed share repurchases of 35 million shares and 56 million shares and settled total shares for $0.8 billion and $1.3 billion , respectively. The shares repurchased during the six months ended April 30, 2019 and 2018 were all open market repurchase transactions. On June 19, 2018, HP’s Board of Directors authorized an additional $4.0 billion for future repurchases of its outstanding shares of common stock. As of April 30, 2019 , HP had approximately $2.5 billion remaining under the share repurchase authorizations approved by HP’s Board of Directors. Tax effects related to Other Comprehensive Income (Loss) Three months ended April 30 Six months ended April 30 2019 2018 2019 2018 In millions Tax effect on change in unrealized components of available-for-sale debt securities: Tax benefit on unrealized losses arising during the period $ — $ — $ — $ 1 — — — 1 Tax effect on change in unrealized components of cash flow hedges: Tax (provision) benefit on unrealized gains (losses) arising during the period (36 ) (37 ) (16 ) 33 Tax (benefit) provision on losses (gains) reclassified into earnings (2 ) (29 ) 20 (32 ) (38 ) (66 ) 4 1 Tax effect on change in unrealized components of defined benefit plans: Tax benefit on losses arising during the period 1 — 1 — Tax provision on amortization of actuarial loss and prior service benefit (3 ) (3 ) (6 ) (6 ) Tax benefit on settlements and other — — 1 — (2 ) (3 ) (4 ) (6 ) Tax effect on change in cumulative translation adjustment (2 ) — (2 ) — Tax provision on other comprehensive income (loss) $ (42 ) $ (69 ) $ (2 ) $ (4 ) Changes and reclassifications related to Other Comprehensive Income (Loss), net of taxes Three months ended April 30 Six months ended April 30 2019 2018 2019 2018 In millions Other comprehensive income (loss), net of taxes: Change in unrealized components of available-for-sale debt securities: Unrealized losses arising during the period $ — $ (2 ) $ — $ (4 ) Losses (gains) reclassified into earnings 3 — 3 (5 ) 3 (2 ) 3 (9 ) Change in unrealized components of cash flow hedges: Unrealized gains (losses) arising during the period 162 260 75 (221 ) Losses (gains) reclassified into earnings 4 247 (153 ) 314 166 507 (78 ) 93 Change in unrealized components of defined benefit plans: Losses arising during the period (3 ) — (3 ) — Amortization of actuarial loss and prior service benefit (1) 9 10 17 19 Settlements and other 1 — — 1 7 10 14 20 Change in cumulative translation adjustment 11 — 6 — Other comprehensive income (loss), net of taxes $ 187 $ 515 $ (55 ) $ 104 (1) These components are included in the computation of net pension and post-retirement benefit (credit) charges in Note 4, “Retirement and Post-Retirement Benefit Plans”. The components of accumulated other comprehensive income (loss), net of taxes and changes were as follows: Six months ended April 30, 2019 Net unrealized Net unrealized Unrealized Change in cumulative Accumulated In millions Balance at beginning of period $ 5 $ 291 $ (1,141 ) $ — $ (845 ) Other comprehensive income (loss) before reclassifications — 75 (3 ) (5 ) 67 Reclassifications of losses (gains) into earnings 3 (153 ) 17 11 (122 ) Balance at end of period $ 8 $ 213 $ (1,127 ) $ 6 $ (900 ) |
Net Earnings Per Share
Net Earnings Per Share | 6 Months Ended |
Apr. 30, 2019 | |
Earnings Per Share [Abstract] | |
Net Earnings Per Share | Net Earnings Per Share HP calculates basic net EPS using net earnings and the weighted-average number of shares outstanding during the reporting period. Diluted net EPS includes any dilutive effect of restricted stock units, stock options, performance-based awards and shares purchased under the 2011 employee stock purchase plan. A reconciliation of the number of shares used for basic and diluted net EPS calculations is as follows: Three months ended April 30 Six months ended April 30 2019 2018 2019 2018 In millions, except per share amounts Numerator: Net earnings $ 782 $ 1,058 $ 1,585 $ 2,996 Denominator: Weighted-average shares used to compute basic net EPS 1,529 1,630 1,543 1,640 Dilutive effect of employee stock plans 7 16 8 18 Weighted-average shares used to compute diluted net EPS 1,536 1,646 1,551 1,658 Net earnings per share: Basic $ 0.51 $ 0.65 $ 1.03 $ 1.83 Diluted $ 0.51 $ 0.64 $ 1.02 $ 1.81 Anti-dilutive weighted-average stock-based compensation awards (1) 8 — 6 — (1) HP excludes from the calculation of diluted net EPS stock options and restricted stock units where the assumed proceeds exceed the average market price, because their effect would be anti-dilutive. The assumed proceeds of a stock option include the sum of its exercise price, and average unrecognized compensation cost. The assumed proceeds of a restricted stock unit represent unrecognized compensation cost. |
Litigation and Contingencies
Litigation and Contingencies | 6 Months Ended |
Apr. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Litigation and Contingencies | Litigation and Contingencies HP is involved in lawsuits, claims, investigations and proceedings, including those identified below, consisting of IP, commercial, securities, employment, employee benefits and environmental matters that arise in the ordinary course of business. HP accrues a liability when management believes that it is both probable that a liability has been incurred and the amount of loss can be reasonably estimated. HP believes it has recorded adequate provisions for any such matters and, as of April 30, 2019, it was not reasonably possible that a material loss had been incurred in excess of the amounts recognized in HP’s financial statements. HP reviews these matters at least quarterly and adjusts its accruals to reflect the impact of negotiations, settlements, rulings, advice of legal counsel, and other information and events pertaining to a particular case. Pursuant to the separation and distribution agreement, HP shares responsibility with Hewlett Packard Enterprise for certain matters, as indicated below, and Hewlett Packard Enterprise has agreed to indemnify HP in whole or in part with respect to certain matters. Based on its experience, HP believes that any damage amounts claimed in the specific matters discussed below are not a meaningful indicator of HP’s potential liability. Litigation is inherently unpredictable. However, HP believes it has valid defenses with respect to legal matters pending against it. Nevertheless, cash flows or results of operations could be materially affected in any particular period by the resolution of one or more of these contingencies. Litigation, Proceedings and Investigations Copyright Levies . Proceedings are ongoing or have been concluded involving HP in certain European countries, including litigation in Belgium and other countries, seeking to impose or modify levies upon IT equipment (such as multifunction devices (“MFDs”) and PCs), alleging that these devices enable the production of private copies of copyrighted materials. The levies are generally based upon the number of products sold and the per-product amounts of the levies, which vary. Some European countries that do not yet have levies on digital devices are expected to implement similar legislation to enable them to extend existing levy schemes, while other European countries have phased out levies or are expected to limit the scope of levy schemes and applicability in the digital hardware environment, particularly with respect to sales to business users. HP, other companies and various industry associations have opposed the extension of levies to the digital environment and have advocated alternative models of compensation to rights holders. Reprobel, a collecting society administering the remuneration for reprography to Belgian copyright holders, requested by extrajudicial means that HP amend certain copyright levy declarations submitted for inkjet MFDs sold in Belgium from January 2005 to December 2009 to enable it to collect copyright levies calculated based on the generally higher copying speed when the MFDs are operated in draft print mode rather than when operated in normal print mode. In March 2010, HP filed a lawsuit against Reprobel in the Court of First Instance of Brussels seeking a declaratory judgment that no copyright levies are payable on sales of MFDs in Belgium or, alternatively, that payments already made by HP are sufficient to comply with its obligations. The Court of Appeal in Brussels (the “Court of Appeal”) stayed the proceedings and referred several questions to the Court of Justice of the European Union (“CJEU”). On November 12, 2015, the CJEU published its judgment providing that a national legislation such as the Belgian one at issue in the main proceedings is incompatible with EU law on multiple legal points, as argued by HP, and returned the proceedings to the referring court. On May 12, 2017, the Court of Appeal held that (1) reprographic copyright levies are due notwithstanding the lack of conformity of the Belgian system with EU law in certain aspects and (2) the applicable levies are to be calculated based on the objective speed of each MFD as established by an expert appointed by the Court of Appeal. HP appealed this decision before the Belgian Supreme Court on January 18, 2018. Based on industry opposition to the extension of levies to digital products, HP’s assessments of the merits of various proceedings and HP’s estimates of the number of units impacted and the amounts of the levies, HP has accrued amounts that it believes are adequate to address the ongoing disputes. Hewlett-Packard Company v. Oracle Corporation . On June 15, 2011, HP filed suit against Oracle Corporation (“Oracle”) in California Superior Court in Santa Clara County in connection with Oracle’s March 2011 announcement that it was discontinuing software support for HP’s Itanium-based line of mission-critical servers. HP asserted, among other things, that Oracle’s actions breached the contract that was signed by the parties as part of the settlement of the litigation relating to Oracle’s hiring of Mark Hurd. The matter eventually progressed to trial, which was bifurcated into two phases. HP prevailed in the first phase of the trial, in which the court ruled that the contract at issue required Oracle to continue to offer its software products on HP’s Itanium-based servers for as long as HP decided to sell such servers. The second phase of the trial was then postponed by Oracle’s appeal of the trial court’s denial of Oracle’s “anti-SLAPP” motion, in which Oracle argued that HP’s damages claim infringed on Oracle’s First Amendment rights. On August 27, 2015, the California Court of Appeals rejected Oracle’s appeal. The matter was remanded to the trial court for the second phase of the trial, which began on May 23, 2016 and was submitted to the jury on June 29, 2016. On June 30, 2016, the jury returned a verdict in favor of HP, awarding HP approximately $3.0 billion in damages, which included approximately $1.7 billion for past lost profits and $1.3 billion for future lost profits. On October 20, 2016, the court entered judgment for HP for this amount with interest accruing until the judgment is paid. Oracle’s motion for a new trial was denied on December 19, 2016, and Oracle filed its notice of appeal from the trial court’s judgment on January 17, 2017. On February 2, 2017, HP filed a notice of cross-appeal challenging the trial court’s denial of prejudgment interest. Oracle’s opening brief was filed on March 7, 2019. HP’s respondent’s/cross-opening brief is due 75 days after Oracle’s brief unless an extension of time is granted; Oracle’s reply/cross-respondent’s brief is due 75 days after HP’s respondent’s/cross-opening brief is filed; and HP’s cross-reply brief is due 50 days after Oracle’s reply/cross-respondent’s brief is filed. The Court of Appeal will schedule oral argument after the case is fully briefed. HP expects that the appeals process could take several years to complete. Litigation is unpredictable, and there can be no assurance that HP will recover damages, or that any award of damages will be for the amount awarded by the jury’s verdict. The amount ultimately awarded, if any, would be recorded in the period received. No adjustment has been recorded in the financial statements in relation to this potential award. Pursuant to the terms of the separation and distribution agreement, HP and Hewlett Packard Enterprise will share equally in any recovery from Oracle once Hewlett Packard Enterprise has been reimbursed for all costs incurred in the prosecution of the action prior to the Separation. Forsyth, et al. v. HP Inc. and Hewlett Packard Enterprise . This is a purported class and collective action filed on August 18, 2016 in the United States District Court, Northern District of California, against HP and Hewlett Packard Enterprise alleging the 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 originally sought to certify a nationwide collective class action under the ADEA comprised of all U.S. residents employed by defendants who had their employment terminated pursuant to a workforce reduction (“WFR”) plan on or after May 23, 2012 and who were 40 years of age or older. Plaintiffs also originally sought to represent a Rule 23 class under California law comprised of all persons 40 years or older employed by defendants in the state of California and terminated pursuant to a WFR plan on or after May 23, 2012. Following a partial motion to dismiss, a motion to strike and a motion to compel arbitration that the defendants filed in November 2016, the plaintiffs amended their complaint. New plaintiffs were added, but the plaintiffs agreed that the class period for the putative nationwide ADEA collective action should be shortened and now starts, at the earliest, on December 9, 2014. The plaintiffs also agreed that the class period for the putative California state law class action should be shortened and now starts on August 18, 2012. On January 30, 2017, the defendants filed another partial motion to dismiss and motions to compel arbitration as to several of the plaintiffs. On March 20, 2017, the defendants filed additional motions to compel arbitration as to a number of the opt-in plaintiffs. On September 20, 2017, the Court granted the motions to compel arbitration as to the plaintiffs and opt-ins who signed WFR release agreements, denied the pending motion to dismiss without prejudice, stayed the action and administratively closed the case pending the completion of the compelled arbitrations. On November 30, 2017, three named plaintiffs and twelve opt-in plaintiffs filed a single arbitration demand. An additional arbitration claimant was added later by stipulation. On December 22, 2017, the defendants filed a motion to: (1) stay the claims of individuals not subject to arbitration and (2) enjoin the demanded arbitration and require each plaintiff to file a separate arbitration demand. On February 6, 2018, the Court granted the motion to stay and denied the motion to enjoin. Pre-arbitration mediation proceedings took place on October 4 and 5, 2018, and the claims of all 16 arbitration claimants were resolved. Between November 2018 and April 2019, an additional 154 individuals filed consents to opt‐in to the action as party‐plaintiffs. Of the new opt-ins, 143 signed separation agreements that include class waivers and mandatory arbitration provisions. The addition of these opt-ins brings the total number of named and opt-in plaintiffs to 193 . The stay of the litigation remains in place. Jackson, et al. v. HP Inc. and Hewlett Packard Enterprise. This putative nationwide class action was filed on July 24, 2017 in federal district court in San Jose, California. The plaintiffs purport to bring the lawsuit on behalf of themselves and other similarly situated African-Americans and individuals over the age of forty . The plaintiffs allege that the defendants engaged in a pattern and practice of racial and age discrimination in lay-offs and promotions. The plaintiffs filed an amended complaint on September 29, 2017. On January 12, 2018, the defendants moved to transfer the matter to the federal district court in the Northern District of Georgia. The defendants also moved to dismiss the claims on various grounds and to strike certain aspects of the proposed class definition. The Court dismissed the action on the basis of improper venue. On July 23, 2018, the plaintiffs refiled the case in the Northern District of Georgia. On August 9, 2018, the plaintiffs also filed a notice of appeal of the dismissal order with the United States Court of Appeals for the Ninth Circuit. On October 1, 2018, the Georgia court granted the plaintiffs’ unopposed motion to stay and administratively close the Georgia action until the Ninth Circuit appeal is decided. India Directorate of Revenue Intelligence Proceedings . On April 30 and May 10, 2010, the India Directorate of Revenue Intelligence (the “DRI”) issued show cause notices to Hewlett-Packard India Sales Private Limited (“HP India”), a subsidiary of HP, seven HP India employees and one former HP India employee alleging that HP India underpaid customs duties while importing products and spare parts into India and seeking to recover an aggregate of approximately $370 million , plus penalties. Prior to the issuance of the show cause notices, HP India deposited approximately $16 million with the DRI and agreed to post a provisional bond in exchange for the DRI’s agreement to not seize HP India products and spare parts and to not interrupt the transaction of business by HP India. On April 11, 2012, the Bangalore Commissioner of Customs issued an order on the products-related show cause notice affirming certain duties and penalties against HP India and the named individuals of approximately $386 million , of which HP India had already deposited $9 million . On December 11, 2012, HP India voluntarily deposited an additional $10 million in connection with the products-related show cause notice. The differential duty demand is subject to interest. On April 20, 2012, the Commissioner issued an order on the parts-related show cause notice affirming certain duties and penalties against HP India and certain of the named individuals of approximately $17 million , of which HP India had already deposited $7 million . After the order, HP India deposited an additional $3 million in connection with the parts-related show cause notice so as to avoid certain penalties. HP India filed appeals of the Commissioner’s orders before the Customs Tribunal along with applications for waiver of the pre-deposit of remaining demand amounts as a condition for hearing the appeals. The Customs Department has also filed cross-appeals before the Customs Tribunal. On January 24, 2013, the Customs Tribunal ordered HP India to deposit an additional $24 million against the products order, which HP India deposited in March 2013. The Customs Tribunal did not order any additional deposit to be made under the parts order. In December 2013, HP India filed applications before the Customs Tribunal seeking early hearing of the appeals as well as an extension of the stay of deposit as to HP India and the individuals already granted until final disposition of the appeals. On February 7, 2014, the application for extension of the stay of deposit was granted by the Customs Tribunal until disposal of the appeals. On October 27, 2014, the Customs Tribunal commenced hearings on the cross-appeals of the Commissioner’s orders. The Customs Tribunal rejected HP India’s request to remand the matter to the Commissioner on procedural grounds. The hearings scheduled to reconvene on April 6, 2015 and again on November 3, 2015 and April 11, 2016 were canceled at the request of the Customs Tribunal. A hearing on the merits of the appeal scheduled for January 15, 2019 has been cancelled. Pursuant to the separation and distribution agreement, Hewlett Packard Enterprise has agreed to indemnify HP in part, based on the extent to which any liability arises from the products and spare parts of Hewlett Packard Enterprise’s businesses. Class Actions re Authentication of Supplies . Five purported consumer class actions were filed against HP, arising out of the supplies authentication protocol in certain OfficeJet printers. This authentication protocol rejects some third-party ink cartridges that use non-HP security chips. Two of the cases were dismissed, and the remaining cases were consolidated in the United States District Court for the Northern District of California, captioned In re HP Printer Firmware Update Litigation . The remaining plaintiffs’ consolidated amended complaint was filed on February 15, 2018, alleging eleven causes of action: (1) unfair and unlawful business practices in violation of the Unfair Competition Law, Cal. Bus. & Prof. Code § 17200, et seq.; (2) fraudulent business practices in violation of the Unfair Competition Law, Cal. Bus. & Prof. Code § 17200, et seq.; (3) violations of the False Advertising Law, Cal. Bus. & Prof. Code § 17500, et seq.; (4) violations of the Consumer Legal Remedies Act, Cal. Civ. Code § 1750, et seq.; (5) violations of the Texas Deceptive Trade Practices ‒ Consumer Protection Act, Tex. Bus. & Com. Code Ann. § 17.01, et seq.; (6) violations of the Washington Consumer Protection Act, Wash. Rev. Code Ann. § 19.86.010, et seq.; (7) violations of the New Jersey Consumer Fraud Act, New Jersey Statutes Ann. 56:8-1, et seq.; (8) violations of the Computer Fraud and Abuse Act, 18 U.S.C. § 1030, et seq.; (9) violations of the California Computer Data Access and Fraud Act, Cal. Penal Code § 502; (10) Trespass to Chattels; and (11) Tortious Interference with Contractual Relations and/or Prospective Economic Advantage. On February 7, 2018, the plaintiffs moved to certify an injunctive relief class of “[a]ll persons in California who own a Class Printer” under the “unfair” prong of the California unfair competition statute and a class of “[a]ll persons in the United States who purchased a Class Printer and experienced a print failure while using a non-HP aftermarket cartridge during the period between March 1, 2015 and December 31, 2017” under the Computer Fraud and Abuse Act and common law trespass to chattels. On March 29, 2018, the court granted in part and denied in part HP’s motion to dismiss. The court dismissed the plaintiffs’ claim under the “unfair” prong of the California unfair competition statute, claims under the non-California consumer protection statutes, and claim for tortious interference with contractual relations and/or prospective economic advantage. The court also dismissed in part the plaintiffs’ fraud-based claims under the California consumer protection statutes and computer hacking claims under the Computer Fraud and Abuse Act and California Computer Data Access and Fraud Act. The court denied HP’s motion to dismiss with respect to the plaintiffs’ claim for trespass to chattels and claim under the “unlawful” prong of the California unfair competition statute. The court granted the plaintiffs leave to amend on all of the dismissed claims, except the California Computer Data Access and Fraud Act claim to the extent it was based on two specific subsections of that statute. On September 18, 2018, the parties entered into a Settlement Agreement and Release pursuant to which the plaintiffs agreed to dismiss all claims against HP in exchange for a $1.5 million payment to the class and an agreement that HP would not reinstall the authentication protocol on the printers at issue. The plaintiffs filed a motion for preliminary approval of the settlement, which was granted by the court on November 19, 2018. Notice of the settlement was given to the class beginning on January 7, 2019, and the period for individuals to opt out of or object to the settlement ended in March 2019. The court granted final approval of the class settlement on April 25, 2019. The court did not rule on plaintiffs’ motion for attorneys’ fees and expenses at that time but instead ordered plaintiffs to submit additional evidence in support of their motion. Autonomy-Related Legal Matters Investigations . As a result of the findings of an ongoing investigation, HP has provided information to the U.K. Serious Fraud Office, the U.S. Department of Justice (“DOJ”) and the SEC related to the accounting improprieties, disclosure failures and misrepresentations at Autonomy that occurred prior to and in connection with HP’s acquisition of Autonomy. On January 19, 2015, the U.K. Serious Fraud Office notified HP that it was closing its investigation and had decided to cede jurisdiction of the investigation to the U.S. authorities. On November 14, 2016, the DOJ announced that a federal grand jury indicted Sushovan Hussain, the former CFO of Autonomy. Mr. Hussain was charged with conspiracy to commit wire fraud, securities fraud, and multiple counts of wire fraud. The indictment alleged that Mr. Hussain engaged in a scheme to defraud purchasers and sellers of securities of Autonomy and HP about the true performance of Autonomy’s business, its financial condition, and its prospects for growth. A jury trial commenced on February 26, 2018. On April 30, 2018, the jury found Mr. Hussain guilty of all charges against him. On November 15, 2016, the SEC announced that Stouffer Egan, the former CEO of Autonomy’s U.S.-based operations, settled charges relating to his participation in an accounting scheme to meet internal sales targets and analyst revenue expectations. On November 29, 2018, the DOJ announced that a federal grand jury indicted Michael Lynch, former CEO of Autonomy, and Stephen Chamberlain, former VP of Finance of Autonomy. Dr. Lynch and Mr. Chamberlain were charged with conspiracy to commit wire fraud and multiple counts of wire fraud. HP is continuing to cooperate with the ongoing enforcement actions. Autonomy Corporation Limited v. Michael Lynch and Sushovan Hussain . On April 17, 2015, four former-HP subsidiaries that became subsidiaries of Hewlett Packard Enterprise at the time of the Separation (Autonomy Corporation Limited, Hewlett Packard Vision BV, Autonomy Systems, Limited, and Autonomy, Inc.) initiated civil proceedings in the U.K. High Court of Justice against two members of Autonomy’s former management, Michael Lynch and Sushovan Hussain. The Particulars of Claim seek damages in excess of $5 billion from Messrs. Lynch and Hussain for breach of their fiduciary duties by causing Autonomy group companies to engage in improper transactions and accounting practices. On October 1, 2015, Messrs. Lynch and Hussain filed their defenses. Mr. Lynch also filed a counterclaim against Autonomy Corporation Limited seeking $160 million in damages, among other things, for alleged misstatements regarding Lynch. The Hewlett Packard Enterprise subsidiary claimants filed their replies to the defenses and the asserted counter-claim on March 11, 2016. Trial began on March 25, 2019 and is scheduled to continue through the remainder of 2019. Environmental HP’s operations and products are subject to various federal, state, local and foreign laws and regulations concerning environmental protection, including laws addressing the discharge of pollutants into the air and water, the management and disposal of hazardous substances and wastes, the cleanup of contaminated sites, the content of HP’s products and the recycling, treatment and disposal of those products. In particular, HP faces increasing complexity in its product design and procurement operations as it adjusts to new and future requirements relating to the chemical and materials composition of its products, their safe use, and the energy consumption associated with those products, including requirements relating to climate change. HP is also subject to legislation in an increasing number of jurisdictions that makes producers of electrical goods, including computers and printers, financially responsible for specified collection, recycling, treatment and disposal of past and future covered products (sometimes referred to as “product take-back legislation”). HP could incur substantial costs, its products could be restricted from entering certain jurisdictions, and it could face other sanctions, if it were to violate or become liable under environmental laws or if its products become noncompliant with environmental laws. HP’s potential exposure includes 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. HP is 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 state laws similar to CERCLA, and may become a party to, or otherwise involved in, proceedings brought by private parties for contribution towards clean-up costs. HP is also conducting environmental investigations or remediations at several current or former operating sites pursuant to administrative orders or consent agreements with state environmental agencies. The separation and distribution agreement includes provisions that provide for the allocation of environmental liabilities between HP and Hewlett Packard Enterprise including certain remediation obligations; responsibilities arising from the chemical and materials composition of their respective products, their safe use and their energy consumption; obligations under product take back legislation that addresses the collection, recycling, treatment and disposal of products; and other environmental matters. HP will generally be responsible for environmental liabilities related to the properties and other assets, including products, allocated to HP under the separation and distribution agreement and other ancillary agreements. Under these agreements, HP will indemnify Hewlett Packard Enterprise for liabilities for specified ongoing remediation projects, subject to certain limitations, and Hewlett Packard Enterprise has a payment obligation for a specified portion of the cost of those remediation projects. In addition, HP will share with Hewlett Packard Enterprise other environmental liabilities as set forth in the separation and distribution agreement. HP is indemnified in whole or in part by Hewlett Packard Enterprise for liabilities arising from the assets assigned to Hewlett Packard Enterprise and for certain environmental matters as detailed in the separation and distribution agreement. |
Guarantees, Indemnifications, a
Guarantees, Indemnifications, and Warranties | 6 Months Ended |
Apr. 30, 2019 | |
Guarantees [Abstract] | |
Guarantees, Indemnifications and Warranties | Guarantees, Indemnifications and Warranties Guarantees In the ordinary course of business, HP may issue performance guarantees to certain of its clients, customers and other parties pursuant to which HP has guaranteed the performance obligations of third parties. Some of those guarantees may be backed by standby letters of credit or surety bonds. In general, HP would be obligated to perform over the term of the guarantee in the event a specified triggering event occurs as defined by the guarantee. HP believes the likelihood of having to perform under a material guarantee is remote. Cross-Indemnifications with Hewlett Packard Enterprise Under the separation and distribution agreement, HP agreed to indemnify Hewlett Packard Enterprise, 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 HP as part of the Separation. Hewlett Packard Enterprise similarly agreed to indemnify HP, 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 Hewlett Packard Enterprise as part of the Separation. HP expects Hewlett Packard Enterprise to fully perform under the terms of the separation and distribution agreement. For information on cross-indemnifications with Hewlett Packard Enterprise for litigation matters, see Note 12, “Litigation and Contingencies.” In connection with the Separation, HP entered into the tax matters agreement (“TMA”) with Hewlett Packard Enterprise, effective on November 1, 2015. The TMA provides that HP and Hewlett Packard Enterprise will share certain pre-Separation income tax liabilities. In addition, if the distribution of Hewlett Packard Enterprise’s common shares to the HP stockholders is determined to be taxable, Hewlett Packard Enterprise and HP would share the tax liability equally, unless the taxability of the distribution is the direct result of action taken by either Hewlett Packard Enterprise or HP subsequent to the distribution, in which case the party causing the distribution to be taxable would be responsible for any taxes imposed on the distribution. Indemnifications In the ordinary course of business, HP enters into contractual arrangements under which HP may agree to indemnify a third party to such arrangement from any losses incurred relating to the services they perform on behalf of HP or for losses arising from certain events as defined within the particular contract, which may include, for example, litigation or claims relating to past performance. HP also provides indemnifications to certain vendors and customers against claims of intellectual property infringement made by third parties arising from the vendors’ and customers’ use of HP’s software products and services and certain other matters. Some indemnifications may not be subject to maximum loss clauses. Historically, payments made related to these indemnifications have been immaterial. HP records tax indemnification receivables from various third parties for certain tax liabilities that HP is jointly and severally liable for, but for which it is indemnified by those same third parties under existing legal agreements. HP records a tax indemnification payable to various third parties under these agreements when management believes that it is both probable that a liability has been incurred and the amount can be reasonably estimated. The actual amount that the parties pay or may be obligated to pay could vary depending on the outcome of certain unresolved tax matters and determination of such obligation under the terms of such legal agreements, which may not be resolved for several years. The net receivable as of April 30, 2019 and October 31, 2018 were $0.9 billion and $1.0 billion , respectively. Warranties HP accrues the estimated cost of product warranties at the time it recognizes revenue. HP engages in extensive product quality programs and processes, including actively monitoring and evaluating the quality of its component suppliers; however, contractual warranty terms, repair costs, product call rates, average cost per call, current period product shipments and ongoing product failure rates, as well as specific product class failures outside of HP’s baseline experience, affect the estimated warranty obligation. HP’s aggregate product warranty liabilities and changes were as follows: Six months ended April 30, 2019 In millions Balance at beginning of period $ 915 Accruals for warranties issued 519 Adjustments related to pre-existing warranties (including changes in estimates) (1 ) Settlements made (in cash or in kind) (524 ) Balance at end of period $ 909 |
Acquisitions
Acquisitions | 6 Months Ended |
Apr. 30, 2019 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions On November 1, 2018, HP completed the acquisition of the Apogee group. This acquisition furthers HP’s plan to disrupt the A3 copier market and builds on its printing strategy to enhance its A3 and A4 product portfolio; build differentiated solutions and tools to expand its MPS; and invest in its direct and indirect go-to-market capabilities. Apogee augments HP’s services portfolio in contractual office printing and MPS, where solutions are increasingly important for SMBs. HP reports the financial results of the above business in the Printing segment. The table below presents the preliminary purchase price allocation for HP's acquisition as of November 1, 2018 and reflects various preliminary fair value estimates and analyses, including preliminary work performed by third-party valuation specialists, which are subject to change within the measurement period as valuations are finalized. The primary areas of the preliminary purchase price allocation that are not yet finalized relate to the fair values of certain tangible assets and liabilities acquired, the valuation of intangible assets acquired and residual goodwill. HP expects to continue to obtain information to assist it in determining the fair value of the net assets acquired at the acquisition date during the measurement period. In millions Goodwill $ 375 Amortizable intangible assets 300 Net liabilities assumed (186 ) Total fair value of consideration $ 489 |
Intangible Assets
Intangible Assets | 6 Months Ended |
Apr. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Intangible Assets HP’s intangible assets were composed of: As of April 30, 2019 As of October 31, 2018 Gross Accumulated Amortization Net Gross Accumulated Amortization Net In millions Customer contracts, customer lists and distribution agreements $ 391 $ 105 $ 286 $ 112 $ 88 $ 24 Technology, patents and trade name 628 213 415 601 172 429 Total intangible assets $ 1,019 $ 318 $ 701 $ 713 $ 260 $ 453 During the six months ended April 30, 2019, the increase in gross intangible assets was primarily due to intangible assets resulting from the acquisition of the Apogee group, which are based on preliminary fair value estimates of the assets acquired. The weighted-average useful lives of intangible assets acquired during the period are as follows: Weighted-Average Useful Life Customer contracts, customer lists and distribution agreements 9 Technology, patents and trade name 7 As of April 30, 2019, estimated future amortization expense related to intangible assets was as follows: Fiscal year In millions Remainder of 2019 $ 57 2020 115 2021 114 2022 114 2023 113 Thereafter 188 Total $ 701 |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 6 Months Ended |
Apr. 30, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying Consolidated Condensed Financial Statements of HP and its wholly-owned subsidiaries are prepared in conformity with United States (“U.S.”) generally accepted accounting principles (“GAAP”). The interim financial information is unaudited but reflects all normal adjustments that are necessary to provide a fair statement of results for the interim periods presented. This interim information should be read in conjunction with the Consolidated Financial Statements for the fiscal year ended October 31, 2018 in the Annual Report on Form 10-K, filed on December 13, 2018 . The Consolidated Condensed Balance Sheet for October 31, 2018 was derived from audited financial statements. |
Principles of Consolidation | Principles of Consolidation The Consolidated Condensed Financial Statements include the accounts of HP and its subsidiaries and affiliates in which HP has a controlling financial interest or is the primary beneficiary. All intercompany balances and transactions have been eliminated. |
Reclassifications | Reclassifications Effective at the beginning of its first quarter of fiscal year 2019, HP implemented an organizational change to align its business unit financial reporting more closely with its current business structure. HP reflected this change to its business unit information in prior reporting periods on an as-if basis. The reporting change had no impact to previously reported segment net revenue, consolidated net revenue, earnings from operations, net earnings or net earnings per share (“EPS”). HP has reclassified certain prior-year amounts to conform to the current-year presentation as a result of the adoption of Accounting Standards Update (“ASU”) 2017-07, “Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Post-retirement Benefit Cost”. This adoption had no impact on previously reported consolidated net revenue, net earnings or net EPS. For detailed discussion, see Note 2, “Segment Information”. |
Use of Estimates | Use of Estimates The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in HP’s Consolidated Condensed Financial Statements and accompanying notes. Actual results could differ materially from those estimates. |
Recently Adopted Accounting Pronouncements and Recently Issued Accounting Pronouncements Not Yet Adopted | Recently Adopted Accounting Pronouncements In March 2017, the Financial Accounting Standards Board (“FASB”) issued guidance, which addresses the improvement of the presentation of net periodic pension and net periodic post-retirement benefit cost. The guidance requires entities to present the service cost component of net periodic benefit cost in the same income statement line item as other compensation costs arising from services rendered during the period. Additionally, the guidance requires that companies present the other components of the net periodic benefit cost separately from the line item that includes service cost and any other subtotal of income from operations. The amendments in this guidance are to be applied retrospectively for presentation in the Consolidated Condensed Statements of Earnings. A practical expedient allows companies to use the amount disclosed in its pension and other post-retirement plan note for the prior comparative periods as the estimation basis for applying the retrospective presentation requirements. HP adopted this guidance in the first quarter of fiscal year 2019 and elected to use the practical expedient. The adoption of this guidance has no impact on net earnings. The reclassification resulted in an increase in Selling, general and administrative expenses and a reduction in interest and other, net of $58 million and $118 million for the three and six months ended April 30, 2018, respectively. In November 2016, the FASB issued guidance, which addresses the presentation of restricted cash in the statement of cash flows. The guidance requires entities to present the changes in the total of cash, cash equivalents, restricted cash, and restricted cash equivalents in the statement of cash flows. As a result, entities will no longer present transfers between cash and cash equivalents and restricted cash and restricted cash equivalents in the statement of cash flows. HP adopted this guidance in the first quarter of fiscal year 2019. The implementation of this guidance did not have any impact on its Consolidated Condensed Financial Statements. In October 2016, the FASB issued guidance, which amends the existing accounting for Intra-Entity Transfers of Assets Other Than Inventory. The guidance (Topic 740) requires an entity to recognize the income tax consequences of intra-entity transfers, other than inventory, when the transfer occurs. It also requires modified retrospective transition with a cumulative catch-up adjustment to opening retained earnings in the period of adoption. HP adopted this guidance in the first quarter of fiscal year 2019. The implementation of this guidance resulted in $353 million of net reduction to its prepaid tax asset adjusted through accumulated deficit. In August 2016, the FASB issued guidance, which amends the existing accounting standards for the classification of certain cash receipts and cash payments on the statement of cash flows. HP adopted this guidance in the first quarter of fiscal year 2019. The implementation of this guidance did not have any impact on its Consolidated Condensed Financial Statements. In January 2016, the FASB issued guidance, which amends the existing accounting standards for the recognition and measurement of financial assets and financial liabilities. The guidance (Topic 825-10) primarily addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. The amendments should be applied by means of a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption, with other amendments related specifically to equity securities without readily determinable fair values applied prospectively. HP adopted this guidance in the first quarter of fiscal year 2019. The implementation of this guidance did not have a material impact on its Consolidated Condensed Financial Statements. In May 2014, the FASB issued guidance, which amends the existing accounting standards for revenue recognition. The amendments (Topic 606) are based on the principle that revenue should be recognized to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. HP adopted the new revenue standard in the first quarter of fiscal year 2019 using the modified retrospective method applied to contracts that were not completed as of November 1, 2018. HP recognized the net impact of adoption as an increase to accumulated deficit by $212 million , net of tax on November 1, 2018. The primary changes that impact the Consolidated Condensed Financial Statements are as below: Variable consideration - HP estimates the transaction price for elements of consideration which are variable in nature. Certain distributor programs and incentive offerings which were recorded at the date the sales incentives were offered, will now be recorded at the time of revenue recognition based on estimates. Costs to obtain a contract - The incremental costs to obtain a contract are primarily comprised of eligible sales commissions which were previously expensed as incurred. HP will capitalize the eligible sales commission costs for contracts with terms of more than one year and will amortize these costs over the expected period of the benefit. The adoption has led to certain balance sheet reclassifications pertaining to return asset and liability and repurchase reserves which impacts accounts receivable, net, inventory, other current assets and other accrued liabilities balances. Revenue Recognition General HP recognizes revenues at a point in time or over time depicting the transfer of promised goods or services to customers in an amount that reflects the consideration to which HP expects to be entitled in exchange for those goods or services. HP follows the five-step model for revenue recognition as summarized below: 1. Identify the contract with a customer - A contract with customer exists when (i) it is approved and signed by all parties, (ii) each party’s rights and obligations can be identified, (iii) payment terms are defined, (iv) it has commercial substance and (v) the customer has the ability and intent to pay. HP evaluates customers’ ability to pay based on various factors like historical payment experience, financial metrics and customer credit scores. 2. Identify the performance obligations in the contract - HP evaluates each performance obligation in an arrangement to determine whether it represents a separate unit of accounting, such as hardware and/or service. A performance obligation constitutes a separate unit of accounting when the customer can benefit from the goods or services either on its own or together with other resources that are readily available to the customer and the performance obligation is distinct within the context of the contract. 3. Determine the transaction price - Transaction price is the amount of consideration to which HP expects to be entitled in exchange for transferring goods or services to the customer. If the transaction price includes a variable amount, HP estimates the amount it expects to be entitled to using either the expected value or most likely amount method. HP reduces the transaction price at the time of revenue recognition for customer and distributor programs and incentive offerings, rebates, promotions, other volume-based incentives and expected returns. HP uses estimates to determine the expected variable consideration for such programs based on factors like historical experience, expected consumer behavior and market conditions. HP has elected the practical expedient of not accounting for significant financing components if the period between revenue recognition and when the customer pays for the product or service is one year or less. 4. Allocate the transaction price to performance obligations in the contract - When a sales arrangement contains multiple performance obligations, such as hardware and/or services, HP allocates revenue to each performance obligation in proportion to their selling price. The selling price for each performance obligation is based on its standalone selling price (“SSP”). HP establishes SSP using the price charged for a performance obligation when sold separately (“observable price”) and, in some instances, using the price established by management having the relevant authority. When observable price is not available, HP establishes SSP based on management judgment considering internal factors such as margin objectives, pricing practices and controls, customer segment pricing strategies and the product life-cycle. Consideration is also given to market conditions such as competitor pricing strategies and technology industry life cycles. 5. Recognize revenue when (or as) the performance obligation is satisfied - Revenue is recognized when, or as, a performance obligation is satisfied by transferring control of a promised good or service to a customer. HP generally invoices the customer upon delivery of the goods or services and the payments are due as per contract terms. For fixed price support or maintenance contracts that are in the nature of stand-ready obligations, payments are generally received in advance from customers and revenue is recognized on a straight-line basis over time for the duration of the contract. HP reports revenue net of any taxes collected from customers and remitted to government authorities, and the collected taxes are recorded as other accrued liabilities until remitted to the relevant government authority. HP includes costs related to shipping and handling in cost of revenue. HP records revenue on a gross basis when HP is a principal in the transaction and on a net basis when HP is acting as an agent between the customer and the vendor. HP considers several factors to determine whether it is acting as a principal or an agent, most notably whether HP is the primary obligor to the customer, has established its own pricing and has inventory and credit risks. Hardware HP transfers control of the products to the customer at the time the product is delivered to the customer and recognizes revenue accordingly, unless customer acceptance is uncertain or significant obligations to the customer remain unfulfilled. Services HP recognizes revenue from fixed-price support, maintenance and other service contracts over time depicting the pattern of service delivery and recognizes the costs associated with these contracts as incurred. Contract Assets and Liabilities Contract assets are rights to consideration in exchange for goods or services that HP has transferred to a customer when such right is conditional on something other than the passage of time. Such contract assets are insignificant to HP’s Consolidated Condensed Financial Statements. Contract liabilities are recorded as deferred revenues when amounts invoiced to customers are more than the revenues recognized or when payments are received in advance for fixed price support or maintenance contracts. The short-term and long-term deferred revenues are reported within the other accrued liabilities and other non-current liabilities respectively. Cost to obtain a contract and fulfillment cost Incremental direct costs of obtaining a contract primarily consist of sales commissions. HP has elected the practical expedient to expense as incurred the costs to obtain a contract with a benefit period equal to or less than one year. For contracts with a period of benefit greater than one year, HP capitalizes incremental costs of obtaining a contract with a customer and amortizes these costs over their expected period of benefit provided such costs are recoverable. Fulfillment costs consist of set-up and transition costs related to other service contracts. These costs generate or enhance resources of HP that will be used in satisfying the performance obligation in the future and are capitalized and amortized over the expected period of the benefit, provided such costs are recoverable. See Note 6, “Supplementary Financial Information” for details on cost to obtain a contract and fulfillment cost, contract liabilities and value of remaining performance obligations. Transition disclosure In accordance with the modified retrospective method transition requirements, HP has presented the financial statement line items impacted and adjusted to compare to presentation under the prior GAAP for the Consolidated Condensed Balance Sheet as of April 30, 2019 and for Consolidated Condensed Statement of Earnings for three months and six months ended April 30, 2019. As of April 30, 2019 CONSOLIDATED CONDENSED BALANCE SHEET ITEMS As Reported Effect of Adoption Balances Without Adoption of Topic 606 In millions ASSETS Accounts receivable, net $ 5,414 $ (168 ) $ 5,246 Inventory 5,394 170 5,564 Other current assets 3,921 (170 ) 3,751 Other non-current assets $ 4,900 $ (30 ) $ 4,870 LIABILITIES AND STOCKHOLDERS' DEFICIT Taxes on earnings $ 206 $ 33 $ 239 Other accrued liabilities 8,042 (404 ) 7,638 Accumulated deficit $ (1,325 ) $ 173 $ (1,152 ) Three months ended April 30, 2019 Six months ended April 30, 2019 CONSOLIDATED CONDENSED STATEMENT OF EARNINGS ITEMS As Reported Effect of Adoption Balances Without Adoption of Topic 606 As Reported Effect of Adoption Balances Without Adoption of Topic 606 In millions Net revenue $ 14,036 $ (12 ) $ 14,024 $ 28,746 $ (48 ) $ 28,698 Earnings from operations 928 (12 ) 916 1,854 (48 ) 1,806 Earnings before taxes 883 (12 ) 871 1,783 (48 ) 1,735 Provision for taxes (101 ) 2 (99 ) (198 ) 9 (189 ) Net earnings $ 782 $ (10 ) $ 772 $ 1,585 $ (39 ) $ 1,546 Opening Balance Sheet Adjustments: The following table presents the adoption impact of the new accounting standards to HP’s previously reported financial statements: As Reported on Adjustments under Topic 606 Other (1) As Restated on In millions ASSETS Accounts receivable, net $ 5,113 $ 213 $ — $ 5,326 Inventory 6,062 (203 ) — 5,859 Other current assets 5,046 203 (90 ) 5,159 Other non-current assets $ 5,069 $ 33 $ (263 ) $ 4,839 LIABILITIES AND STOCKHOLDERS' DEFICIT Taxes on earnings $ 340 $ (39 ) $ — $ 301 Other accrued liabilities 7,376 497 — 7,873 Accumulated other comprehensive loss (845 ) — (2 ) (847 ) Accumulated deficit $ (473 ) $ (212 ) $ (351 ) $ (1,036 ) (1) Other includes $353 million adjustment related to Topic 740. Recently Issued Accounting Pronouncements Not Yet Adopted In February 2018, the FASB issued guidance, which eliminates the stranded tax effects in other comprehensive income resulting from the Tax Cuts and Jobs Act (the “TCJA”). Because the amendments only relate to the reclassification of the income tax effects of the TCJA, the underlying guidance that requires that the effect of a change in tax laws or rates be included in income from operations is not affected. HP is required to adopt the guidance in the first quarter of fiscal year 2020. Earlier adoption is permitted. Based on the current assessment, HP expects the adoption of this guidance will have a material impact on its Consolidated Condensed Financial Statements. In August 2017, the FASB issued guidance, which amends the existing accounting standards for derivatives and hedging. The amendment improves the financial reporting of hedging relationships to better represent the economic results of an entity’s risk management activities in its financial statements and made certain targeted improvements to simplify the application of the hedge accounting guidance in current U.S. GAAP. HP is required to adopt the guidance in the first quarter of fiscal year 2020. Earlier adoption is permitted. Based on the current assessment, HP expects that the implementation of this guidance will not have a material impact on its Consolidated Condensed Financial Statements. In June 2016, the FASB issued guidance, which requires credit losses on financial assets measured at amortized cost basis to be presented at the net amount expected to be collected, not based on incurred losses. Further, credit losses on available-for-sale debt securities should be recorded through an allowance for credit losses limited to the amount by which fair value is below amortized cost. HP is required to adopt the guidance in the first quarter of fiscal year 2021. Earlier adoption is permitted. HP is currently evaluating the timing and the impact of this guidance on the Consolidated Condensed Financial Statements. In February 2016, the FASB issued guidance, which amends the existing accounting standards for leases. Consistent with current guidance, the recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee primarily will depend on its classification. Under the new guidance, a lessee will be required to recognize assets and liabilities for all leases with lease terms of more than twelve months. HP will adopt this guidance in the first quarter of fiscal year 2020 and will apply the modified retrospective transition option made available in July 2018 by the FASB, whereby comparative periods will not be retrospectively presented in the Consolidated Condensed Financial Statements. HP is in the process of completing the evaluation of the impacts from the new lease accounting standard. Based on the current assessment, HP expects the adoption of this standard to have a material impact on the Consolidated Condensed Balance Sheet. |
Revenue Recognition | Revenue Recognition General HP recognizes revenues at a point in time or over time depicting the transfer of promised goods or services to customers in an amount that reflects the consideration to which HP expects to be entitled in exchange for those goods or services. HP follows the five-step model for revenue recognition as summarized below: 1. Identify the contract with a customer - A contract with customer exists when (i) it is approved and signed by all parties, (ii) each party’s rights and obligations can be identified, (iii) payment terms are defined, (iv) it has commercial substance and (v) the customer has the ability and intent to pay. HP evaluates customers’ ability to pay based on various factors like historical payment experience, financial metrics and customer credit scores. 2. Identify the performance obligations in the contract - HP evaluates each performance obligation in an arrangement to determine whether it represents a separate unit of accounting, such as hardware and/or service. A performance obligation constitutes a separate unit of accounting when the customer can benefit from the goods or services either on its own or together with other resources that are readily available to the customer and the performance obligation is distinct within the context of the contract. 3. Determine the transaction price - Transaction price is the amount of consideration to which HP expects to be entitled in exchange for transferring goods or services to the customer. If the transaction price includes a variable amount, HP estimates the amount it expects to be entitled to using either the expected value or most likely amount method. HP reduces the transaction price at the time of revenue recognition for customer and distributor programs and incentive offerings, rebates, promotions, other volume-based incentives and expected returns. HP uses estimates to determine the expected variable consideration for such programs based on factors like historical experience, expected consumer behavior and market conditions. HP has elected the practical expedient of not accounting for significant financing components if the period between revenue recognition and when the customer pays for the product or service is one year or less. 4. Allocate the transaction price to performance obligations in the contract - When a sales arrangement contains multiple performance obligations, such as hardware and/or services, HP allocates revenue to each performance obligation in proportion to their selling price. The selling price for each performance obligation is based on its standalone selling price (“SSP”). HP establishes SSP using the price charged for a performance obligation when sold separately (“observable price”) and, in some instances, using the price established by management having the relevant authority. When observable price is not available, HP establishes SSP based on management judgment considering internal factors such as margin objectives, pricing practices and controls, customer segment pricing strategies and the product life-cycle. Consideration is also given to market conditions such as competitor pricing strategies and technology industry life cycles. 5. Recognize revenue when (or as) the performance obligation is satisfied - Revenue is recognized when, or as, a performance obligation is satisfied by transferring control of a promised good or service to a customer. HP generally invoices the customer upon delivery of the goods or services and the payments are due as per contract terms. For fixed price support or maintenance contracts that are in the nature of stand-ready obligations, payments are generally received in advance from customers and revenue is recognized on a straight-line basis over time for the duration of the contract. HP reports revenue net of any taxes collected from customers and remitted to government authorities, and the collected taxes are recorded as other accrued liabilities until remitted to the relevant government authority. HP includes costs related to shipping and handling in cost of revenue. HP records revenue on a gross basis when HP is a principal in the transaction and on a net basis when HP is acting as an agent between the customer and the vendor. HP considers several factors to determine whether it is acting as a principal or an agent, most notably whether HP is the primary obligor to the customer, has established its own pricing and has inventory and credit risks. Hardware HP transfers control of the products to the customer at the time the product is delivered to the customer and recognizes revenue accordingly, unless customer acceptance is uncertain or significant obligations to the customer remain unfulfilled. Services HP recognizes revenue from fixed-price support, maintenance and other service contracts over time depicting the pattern of service delivery and recognizes the costs associated with these contracts as incurred. Contract Assets and Liabilities Contract assets are rights to consideration in exchange for goods or services that HP has transferred to a customer when such right is conditional on something other than the passage of time. Such contract assets are insignificant to HP’s Consolidated Condensed Financial Statements. Contract liabilities are recorded as deferred revenues when amounts invoiced to customers are more than the revenues recognized or when payments are received in advance for fixed price support or maintenance contracts. The short-term and long-term deferred revenues are reported within the other accrued liabilities and other non-current liabilities respectively. Cost to obtain a contract and fulfillment cost Incremental direct costs of obtaining a contract primarily consist of sales commissions. HP has elected the practical expedient to expense as incurred the costs to obtain a contract with a benefit period equal to or less than one year. For contracts with a period of benefit greater than one year, HP capitalizes incremental costs of obtaining a contract with a customer and amortizes these costs over their expected period of benefit provided such costs are recoverable. Fulfillment costs consist of set-up and transition costs related to other service contracts. These costs generate or enhance resources of HP that will be used in satisfying the performance obligation in the future and are capitalized and amortized over the expected period of the benefit, provided such costs are recoverable. See Note 6, “Supplementary Financial Information” for details on cost to obtain a contract and fulfillment cost, contract liabilities and value of remaining performance obligations. |
Segment Information | The accounting policies HP uses to derive segment results are substantially the same as those used by HP in preparing these financial statements. HP derives the results of the business segments directly from its internal management reporting system. |
Employer Contributions and Funding Policy | Employer Contributions and Funding Policy HP’s policy is to fund its pension plans so that it makes at least the minimum contribution required by local government, funding and taxing authorities. |
Taxes on Earnings | HP recognizes interest income from favorable settlements and interest expense and penalties accrued on unrecognized tax benefits in the provision for taxes in the Consolidated Condensed Statements of Earnings. |
Transfers and Servicing Trade Receivables Policy | HP has third-party arrangements, consisting of revolving short-term financing, which provide liquidity to certain partners in order to facilitate their working capital requirements. These financing arrangements, which in certain circumstances may contain partial recourse, result in a transfer of HP’s receivables and risk to the third party. As these transfers qualify as true sales under the applicable accounting guidance, the receivables are de-recognized from the Consolidated Condensed Balance Sheets upon transfer, and HP receives a payment for the receivables from the third party within a mutually agreed upon time period. For arrangements involving an element of recourse, the recourse obligation is measured using market data from the similar transactions and reported as a current liability in the Consolidated Condensed Balance Sheets. The recourse obligations as of April 30, 2019 and October 31, 2018 were not material. The costs associated with the sales of trade receivables for the three months ended April 30, 2019 and 2018 were not material. |
Fair Value | Valuation Techniques Cash Equivalents and Investments: HP holds time deposits, money market funds, mutual funds, other debt securities primarily consisting of corporate and government notes and bonds, and common stock and equivalents. HP values cash equivalents and equity investments using quoted market prices, alternative pricing sources, including net asset value, or models utilizing market observable inputs. The fair value of debt investments 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. Derivative Instruments: From time to time, HP uses forward contracts, interest rate and total return swaps and, in the past, option contracts to hedge certain foreign currency interest rate and return on certain investment exposures. HP uses industry standard valuation models to measure fair value. Where applicable, these models project future cash flows and discount the future amounts to present value using market-based observable inputs, including interest rate curves, HP and counterparty credit risk, foreign exchange rates, and forward and spot prices for currencies and interest rates. See Note 8, “Financial Instruments” for a further discussion of HP’s use of derivative instruments. Other Fair Value Disclosures Short- and Long-Term Debt: HP estimates the fair value of its debt primarily using an expected present value technique, which is based on observable market inputs using interest rates currently available to companies of similar credit standing for similar terms and remaining maturities and considering its own credit risk. The portion of HP’s debt that is hedged is reflected in the Consolidated Condensed Balance Sheets as an amount equal to the debt’s carrying amount and a fair value adjustment representing changes in the fair value of the hedged debt obligations arising from movements in benchmark interest rates. The fair value of HP’s short- and long-term debt was $5.2 billion as of April 30, 2019 , compared to its carrying amount of $5.0 billion at that date. The fair value of HP’s short- and long-term debt was $6.0 billion as of October 31, 2018, compared to its carrying value of $6.0 billion at that date. If measured at fair value in the Consolidated Condensed Balance Sheets, short- and long-term debt would be classified in Level 2 of the fair value hierarchy. Other Financial Instruments: For the balance of HP’s financial instruments, primarily accounts receivable, accounts payable and financial liabilities included in Other accrued liabilities on the Consolidated Condensed Balance Sheets, the carrying amounts approximate fair value due to their short maturities. If measured at fair value in the Consolidated Condensed Balance Sheets, these other financial instruments would be classified in Level 2 or Level 3 of the fair value hierarchy. Non-Marketable Equity Investments and Non-Financial Assets: HP’s non-marketable equity investments are measured at cost less impairment, adjusted for observable price changes . HP’s non-financial assets, such as intangible assets, goodwill and property, plant and equipment, are recorded at fair value in the period an impairment charge is recognized. If measured at fair value in the Consolidated Condensed Balance Sheets these would generally be classified within Level 3 of the fair value hierarchy. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date. Fair Value Hierarchy HP uses valuation techniques that are based upon observable and unobservable inputs. Observable inputs are developed using market data such as publicly available information and reflect the assumptions market participants would use, while unobservable inputs are developed using the best information available about the assumptions market participants would use. Assets and liabilities are classified in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement: Level 1—Quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2—Quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability and market-corroborated inputs. Level 3—Unobservable inputs for the asset or liability. The fair value hierarchy gives the highest priority to observable inputs and lowest priority to unobservable inputs. |
Cash Equivalents and Available-for-Sale Investments | All highly liquid investments with original maturities of three months or less at the date of acquisition are considered cash equivalents. |
Debt and Marketable Equity Securities | Equity securities in privately held companies are included in Other non-current assets on the Consolidated Condensed Balance Sheets. |
Derivative Instruments | Derivative Instruments HP uses derivatives to offset business exposure to foreign currency and interest rate risk on expected future cash flows and on certain existing assets and liabilities. As part of its risk management strategy, HP uses derivative instruments, primarily forward contracts, interest rate swaps, total return swaps and, at times, option contracts to hedge certain foreign currency, interest rate and, return on certain investment exposures. HP may designate its derivative contracts as fair value hedges or cash flow hedges and classifies the cash flows with the activities that correspond to the underlying hedged items. Additionally, for derivatives not designated as hedging instruments, HP categorizes those economic hedges as other derivatives. HP recognizes all derivative instruments at fair value in the Consolidated Condensed Balance Sheets. As a result of its use of derivative instruments, HP is exposed to the risk that its counterparties will fail to meet their contractual obligations. Master netting agreements mitigate credit exposure to counterparties by permitting HP to net amounts due from HP to counterparty against amounts due to HP from the same counterparty under certain conditions. To further limit credit risk, HP has collateral security agreements that allow HP’s custodian to hold collateral from, or require HP to post collateral to, counterparties when aggregate derivative fair values exceed contractually established thresholds which are generally based on the credit ratings of HP and its counterparties. If HP’s or the counterparty’s credit rating falls below a specified credit rating, either party has the right to request full collateralization of the derivatives’ net liability position. The fair value of derivatives with credit contingent features in a net liability position was $56 million and $68 million as of April 30, 2019 and as of October 31, 2018 , respectively, all of which were fully collateralized within two business days. Under HP’s derivative contracts, the counterparty can terminate all outstanding trades following a covered change of control event affecting HP that results in the surviving entity being rated below a specified credit rating. This credit contingent provision did not affect HP’s financial position or cash flows as of April 30, 2019 and October 31, 2018 . Fair Value Hedges HP enters into fair value hedges, such as interest rate swaps, to reduce the exposure of its debt portfolio to changes in fair value resulting from changes in interest rates by achieving a primarily U.S. dollar London Interbank Offered Rate (“LIBOR”)-based floating interest expense. For derivative instruments that are designated and qualify as fair value hedges, HP recognizes the change in fair value of the derivative instrument, as well as the offsetting change in the fair value of the hedged item, in Interest and other, net on the Consolidated Condensed Statements of Earnings in the period of change. Cash Flow Hedges HP uses forward contracts and at times, option 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 revenue, operating expenses, and intercompany loans denominated in currencies other than the U.S. dollar. HP’s foreign currency cash flow hedges mature predominantly within twelve months . However, hedges related to longer-term procurement arrangements extend several years and forward contracts associated with intercompany loans extend for the duration of the loan term, which typically range from two to five years. For derivative instruments that are designated and qualify as cash flow hedges, HP initially records changes in fair value for the effective portion of the derivative instrument in accumulated other comprehensive loss as a separate component of stockholders’ deficit on the Consolidated Condensed Balance Sheets and subsequently reclassifies these amounts into earnings in the period during which the hedged transaction is recognized in earnings. HP reports the effective portion of its cash flow hedges in the same financial statement line item as changes in the fair value of the hedged item. Other Derivatives Other derivatives not designated as hedging instruments consist primarily of forward contracts used to hedge foreign currency-denominated balance sheet exposures. HP uses total return swaps to hedge its executive deferred compensation plan liability. For derivative instruments not designated as hedging instruments, HP recognizes changes in fair value of the derivative instrument, as well as the offsetting change in the fair value of the hedged item, in Interest and other, net in the Consolidated Condensed Statements of Earnings in the period of change. Hedge Effectiveness For interest rate swaps designated as fair value hedges, HP measures hedge effectiveness by offsetting the change in fair value of the hedged item with the change in fair value of the derivative. For foreign currency options and forward contracts designated as cash flow hedges, HP measures hedge effectiveness by comparing the cumulative change in fair value of the hedge contract with the cumulative change in fair value of the hedged item, both of which are based on forward rates. HP recognizes any ineffective portion of the hedge in the Consolidated Condensed Statements of Earnings in the same period in which ineffectiveness occurs. Amounts excluded from the assessment of effectiveness are recognized in the Consolidated Condensed Statements of Earnings in the period they arise. |
Offsetting of Derivatives Instruments | Offsetting of Derivative Instruments HP recognizes all derivative instruments on a gross basis in the Consolidated Condensed Balance Sheets. HP does not offset the fair value of its derivative instruments against the fair value of cash collateral posted under its collateral security agreements. |
Net Earnings Per Share | HP calculates basic net EPS using net earnings and the weighted-average number of shares outstanding during the reporting period. Diluted net EPS includes any dilutive effect of restricted stock units, stock options, performance-based awards and shares purchased under the 2011 employee stock purchase plan. |
Litigation and Contingencies | HP is involved in lawsuits, claims, investigations and proceedings, including those identified below, consisting of IP, commercial, securities, employment, employee benefits and environmental matters that arise in the ordinary course of business. HP accrues a liability when management believes that it is both probable that a liability has been incurred and the amount of loss can be reasonably estimated. HP believes it has recorded adequate provisions for any such matters and, as of April 30, 2019, it was not reasonably possible that a material loss had been incurred in excess of the amounts recognized in HP’s financial statements. HP reviews these matters at least quarterly and adjusts its accruals to reflect the impact of negotiations, settlements, rulings, advice of legal counsel, and other information and events pertaining to a particular case. Pursuant to the separation and distribution agreement, HP shares responsibility with Hewlett Packard Enterprise for certain matters, as indicated below, and Hewlett Packard Enterprise has agreed to indemnify HP in whole or in part with respect to certain matters. Based on its experience, HP believes that any damage amounts claimed in the specific matters discussed below are not a meaningful indicator of HP’s potential liability. Litigation is inherently unpredictable. However, HP believes it has valid defenses with respect to legal matters pending against it. Nevertheless, cash flows or results of operations could be materially affected in any particular period by the resolution of one or more of these contingencies. |
Warranties | Warranties HP accrues the estimated cost of product warranties at the time it recognizes revenue. HP engages in extensive product quality programs and processes, including actively monitoring and evaluating the quality of its component suppliers; however, contractual warranty terms, repair costs, product call rates, average cost per call, current period product shipments and ongoing product failure rates, as well as specific product class failures outside of HP’s baseline experience, affect the estimated warranty obligation. |
Basis of Presentation (Tables)
Basis of Presentation (Tables) | 6 Months Ended |
Apr. 30, 2019 | |
Accounting Policies [Abstract] | |
Schedule of New Accounting Pronouncement Adjustments | In accordance with the modified retrospective method transition requirements, HP has presented the financial statement line items impacted and adjusted to compare to presentation under the prior GAAP for the Consolidated Condensed Balance Sheet as of April 30, 2019 and for Consolidated Condensed Statement of Earnings for three months and six months ended April 30, 2019. As of April 30, 2019 CONSOLIDATED CONDENSED BALANCE SHEET ITEMS As Reported Effect of Adoption Balances Without Adoption of Topic 606 In millions ASSETS Accounts receivable, net $ 5,414 $ (168 ) $ 5,246 Inventory 5,394 170 5,564 Other current assets 3,921 (170 ) 3,751 Other non-current assets $ 4,900 $ (30 ) $ 4,870 LIABILITIES AND STOCKHOLDERS' DEFICIT Taxes on earnings $ 206 $ 33 $ 239 Other accrued liabilities 8,042 (404 ) 7,638 Accumulated deficit $ (1,325 ) $ 173 $ (1,152 ) Three months ended April 30, 2019 Six months ended April 30, 2019 CONSOLIDATED CONDENSED STATEMENT OF EARNINGS ITEMS As Reported Effect of Adoption Balances Without Adoption of Topic 606 As Reported Effect of Adoption Balances Without Adoption of Topic 606 In millions Net revenue $ 14,036 $ (12 ) $ 14,024 $ 28,746 $ (48 ) $ 28,698 Earnings from operations 928 (12 ) 916 1,854 (48 ) 1,806 Earnings before taxes 883 (12 ) 871 1,783 (48 ) 1,735 Provision for taxes (101 ) 2 (99 ) (198 ) 9 (189 ) Net earnings $ 782 $ (10 ) $ 772 $ 1,585 $ (39 ) $ 1,546 Opening Balance Sheet Adjustments: The following table presents the adoption impact of the new accounting standards to HP’s previously reported financial statements: As Reported on Adjustments under Topic 606 Other (1) As Restated on In millions ASSETS Accounts receivable, net $ 5,113 $ 213 $ — $ 5,326 Inventory 6,062 (203 ) — 5,859 Other current assets 5,046 203 (90 ) 5,159 Other non-current assets $ 5,069 $ 33 $ (263 ) $ 4,839 LIABILITIES AND STOCKHOLDERS' DEFICIT Taxes on earnings $ 340 $ (39 ) $ — $ 301 Other accrued liabilities 7,376 497 — 7,873 Accumulated other comprehensive loss (845 ) — (2 ) (847 ) Accumulated deficit $ (473 ) $ (212 ) $ (351 ) $ (1,036 ) (1) Other includes $353 million adjustment related to Topic 740. |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Apr. 30, 2019 | |
Segment Reporting [Abstract] | |
Reconciliation of Segment Operating Results to Consolidated Results | Segment Operating Results from Operations and the reconciliation to HP consolidated results were as follows: Three months ended April 30 Six months ended April 30 2019 2018 2019 2018 In millions Net Revenue: Personal Systems $ 8,921 $ 8,762 $ 18,578 $ 18,202 Printing 5,116 5,241 10,172 10,317 Corporate Investments — 1 1 2 Total segments $ 14,037 $ 14,004 $ 28,751 $ 28,521 Other (1 ) (1 ) (5 ) (1 ) Total net revenue $ 14,036 $ 14,003 $ 28,746 $ 28,520 Earnings before taxes: Personal Systems $ 385 $ 329 $ 795 $ 664 Printing 839 837 1,660 1,636 Corporate Investments (24 ) (21 ) (48 ) (40 ) Total segment earnings from operations $ 1,200 $ 1,145 $ 2,407 $ 2,260 Corporate and unallocated costs and other (97 ) (54 ) (177 ) (78 ) Stock-based compensation expense (66 ) (63 ) (173 ) (148 ) Restructuring and other charges (69 ) (57 ) (124 ) (88 ) Acquisition-related charges (11 ) (45 ) (21 ) (87 ) Amortization of intangible assets (29 ) (20 ) (58 ) (40 ) Interest and other, net (45 ) (823 ) (71 ) (831 ) Total earnings before taxes $ 883 $ 83 $ 1,783 $ 988 |
Schedule of Reconciliation of Segment Operating Results to HP Consolidated Results | Segment Operating Results from Operations and the reconciliation to HP consolidated results were as follows: Three months ended April 30 Six months ended April 30 2019 2018 2019 2018 In millions Net Revenue: Personal Systems $ 8,921 $ 8,762 $ 18,578 $ 18,202 Printing 5,116 5,241 10,172 10,317 Corporate Investments — 1 1 2 Total segments $ 14,037 $ 14,004 $ 28,751 $ 28,521 Other (1 ) (1 ) (5 ) (1 ) Total net revenue $ 14,036 $ 14,003 $ 28,746 $ 28,520 Earnings before taxes: Personal Systems $ 385 $ 329 $ 795 $ 664 Printing 839 837 1,660 1,636 Corporate Investments (24 ) (21 ) (48 ) (40 ) Total segment earnings from operations $ 1,200 $ 1,145 $ 2,407 $ 2,260 Corporate and unallocated costs and other (97 ) (54 ) (177 ) (78 ) Stock-based compensation expense (66 ) (63 ) (173 ) (148 ) Restructuring and other charges (69 ) (57 ) (124 ) (88 ) Acquisition-related charges (11 ) (45 ) (21 ) (87 ) Amortization of intangible assets (29 ) (20 ) (58 ) (40 ) Interest and other, net (45 ) (823 ) (71 ) (831 ) Total earnings before taxes $ 883 $ 83 $ 1,783 $ 988 |
Schedule of Net Revenue by Segment and Business Unit | Net revenue by segment and business unit was as follows: Three months ended April 30 Six months ended April 30 2019 2018 2019 2018 In millions Notebooks $ 5,099 $ 5,153 $ 11,018 $ 10,748 Desktops 2,940 2,752 5,797 5,707 Workstations 569 538 1,131 1,081 Other 313 319 632 666 Personal Systems 8,921 8,762 18,578 18,202 Supplies 3,331 3,434 6,598 6,785 Commercial Hardware 1,179 1,145 2,269 2,182 Consumer Hardware 606 662 1,305 1,350 Printing 5,116 5,241 10,172 10,317 Corporate Investments — 1 1 2 Total segment net revenue 14,037 14,004 28,751 28,521 Other (1 ) (1 ) (5 ) (1 ) Total net revenue $ 14,036 $ 14,003 $ 28,746 $ 28,520 |
Restructuring and Other Charg_2
Restructuring and Other Charges (Tables) | 6 Months Ended |
Apr. 30, 2019 | |
Restructuring and Related Activities [Abstract] | |
Summary of Restructuring Plans | HP’s restructuring activities for the six months ended April 30, 2019 and 2018 summarized by plan were as follows: Fiscal 2017 Plan Severance Infrastructure and other Other prior-year plans (1) Total In millions Accrued balance as of October 31, 2018 $ 50 $ — $ 9 $ 59 Charges 97 19 — 116 Cash payments (61 ) (8 ) (3 ) (72 ) Non-cash and other adjustments (3 ) (11 ) — (14 ) Accrued balance as of April 30, 2019 $ 83 $ — $ 6 $ 89 Total costs incurred to date as of April 30, 2019 $ 350 $ 100 $ 1,317 $ 1,767 Reflected in Consolidated Condensed Balance Sheets Other accrued liabilities 83 — 5 88 Other non-current liabilities — — 1 1 Accrued balance as of October 31, 2017 76 19 13 108 Charges 52 12 — 64 Cash payments (86 ) (31 ) (3 ) (120 ) Non-cash and other adjustments — — 1 1 Accrued balance as of April 30, 2018 $ 42 $ — $ 11 $ 53 HP’s restructuring charges for the three months ended April 30, 2019 summarized by the plans outlined below were as follows: Fiscal 2017 Plan Severance Infrastructure and other Other prior-year plans (1) Total In millions For the three months ended April 30, 2019 $ 50 $ 13 $ — $ 63 (1) Includes prior-year plans which are considered substantially complete. HP does not expect any further material activity associated with these plans. |
Retirement and Post-Retiremen_2
Retirement and Post-Retirement Benefit Plans (Tables) | 6 Months Ended |
Apr. 30, 2019 | |
Retirement Benefits [Abstract] | |
Schedule of Pension and Post-Retirement Benefit (Credit) Cost | The components of HP’s pension and post-retirement (credit) benefit cost recognized in the Consolidated Condensed Statements of Earnings were as follows: Three months ended April 30 U.S. Defined Benefit Plans Non-U.S. Defined Benefit Plans Post-Retirement Benefit Plans 2019 2018 2019 2018 2019 2018 In millions Service cost $ — $ — $ 15 $ 14 $ — $ — Interest cost 123 113 6 6 4 4 Expected return on plan assets (146 ) (179 ) (9 ) (10 ) (5 ) (6 ) Amortization and deferrals: Actuarial loss (gain) 15 16 8 7 (8 ) (4 ) Prior service benefit — — — (1 ) (3 ) (5 ) Net periodic (credit) benefit cost (8 ) (50 ) 20 16 (12 ) (11 ) Settlement loss 1 — — — — — Total periodic (credit) benefit cost $ (7 ) $ (50 ) $ 20 $ 16 $ (12 ) $ (11 ) Six months ended April 30 U.S. Defined Benefit Plans Non-U.S. Defined Benefit Plans Post- Retirement Benefit Plans 2019 2018 2019 2018 2019 2018 In millions Service cost $ — $ — $ 29 $ 28 $ — $ — Interest cost 246 226 12 12 8 8 Expected return on plan assets (291 ) (360 ) (19 ) (20 ) (10 ) (12 ) Amortization and deferrals: Actuarial loss (gain) 30 31 16 14 (16 ) (8 ) Prior service benefit — — (1 ) (2 ) (6 ) (10 ) Net periodic (credit) benefit cost (15 ) (103 ) 37 32 (24 ) (22 ) Settlement loss 1 1 — — — — Total periodic (credit) benefit cost (14 ) (102 ) 37 32 (24 ) (22 ) |
Supplementary Financial Infor_2
Supplementary Financial Information (Tables) | 6 Months Ended |
Apr. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Accounts Receivable | Accounts Receivable, net As of April 30, 2019 October 31, 2018 In millions Accounts receivable $ 5,526 $ 5,242 Allowance for doubtful accounts (112 ) (129 ) $ 5,414 $ 5,113 |
Schedule of Allowance for Doubtful Accounts Related to Accounts Receivable | The allowance for doubtful accounts related to accounts receivable and changes were as follows: Six months ended April 30, 2019 In millions Balance at beginning of period $ 129 Provision for doubtful accounts 24 Deductions, net of recoveries (41 ) Balance at end of period $ 112 |
Schedule of Transferred Trade Receivables Not Collected from Third Parties | The following is a summary of the activity under these arrangements: Three months ended April 30 Six months ended April 30 2019 2018 2019 2018 In millions Balance at beginning of period (1) $ 194 $ 172 $ 165 $ 147 Trade receivables sold 2,490 2,434 5,525 5,370 Cash receipts (2,498 ) (2,430 ) (5,507 ) (5,351 ) Foreign currency and other (4 ) (5 ) (1 ) 5 Balance at end of period (1) $ 182 $ 171 $ 182 $ 171 (1) Amounts outstanding from third parties reported in Accounts Receivable, net in the Consolidated Condensed Balance Sheets. |
Inventory | Inventory As of April 30, 2019 October 31, 2018 In millions Finished goods $ 3,544 $ 4,019 Purchased parts and fabricated assemblies 1,850 2,043 $ 5,394 $ 6,062 |
Other Current Assets | Other Current Assets As of April 30, 2019 October 31, 2018 In millions Supplier and other receivables $ 1,822 $ 2,025 Prepaid and other current assets 1,216 1,445 Value-added taxes receivable 866 865 Available-for-sale investments (1) 17 711 $ 3,921 $ 5,046 (1) See Note 8, “Financial Instruments” for detailed information. |
Property, Plant and Equipment, net | Property, Plant and Equipment, net As of April 30, 2019 October 31, 2018 In millions Land, buildings and leasehold improvements $ 1,965 $ 1,893 Machinery and equipment, including equipment held for lease 4,540 4,216 6,505 6,109 Accumulated depreciation (4,093 ) (3,911 ) $ 2,412 $ 2,198 |
Other Non-Current Assets | Other Non-Current Assets As of April 30, 2019 October 31, 2018 In millions Deferred tax assets $ 2,288 $ 2,431 Tax indemnifications receivable 868 953 Intangible assets (1) 701 453 Other (2) 1,043 1,232 $ 4,900 $ 5,069 (1) See Note 15, “Intangible Assets” for detailed information. (2) Includes marketable equity securities and mutual funds classified as available-for-sale investments of $54 million and $53 million as of April 30, 2019 and October 31, 2018, respectively. See Note 8, “Financial Instruments” for detailed information |
Other Accrued Liabilities | Other Accrued Liabilities As of April 30, 2019 October 31, 2018 In millions Sales and marketing programs $ 3,104 $ 2,758 Deferred revenue 1,138 1,095 Other accrued taxes 916 982 Warranty 657 673 Other 2,227 1,868 $ 8,042 $ 7,376 |
Other Non-Current Liabilities | Other Non-Current Liabilities As of April 30, 2019 October 31, 2018 In millions Tax liability $ 1,978 $ 2,063 Pension, post-retirement, and post-employment liabilities 1,586 1,645 Deferred revenue 1,026 1,005 Deferred tax liability 52 100 Other 839 793 $ 5,481 $ 5,606 |
Interest and Other, net | Interest and Other, net Three months ended April 30 Six months ended April 30 2019 2018 2019 2018 In millions Tax indemnifications (1) $ 5 $ (671 ) $ 15 $ (673 ) Loss on extinguishment of debt — (126 ) — (126 ) Interest expense on borrowings (61 ) (88 ) (125 ) (175 ) Other, net 11 62 39 143 $ (45 ) $ (823 ) $ (71 ) $ (831 ) (1) For the three and six months ended April 30, 2018, includes an adjustment of $671 million of indemnification receivable, pursuant to resolution of various income tax audit settlements. See Note 13, “Guarantees, Indemnifications and Warranties” for further information. |
Net revenue by region | Net revenue by region Three months ended April 30 Six months ended April 30 2019 2018 2019 2018 In millions Americas $ 5,785 $ 5,929 $ 11,817 $ 12,164 Europe, Middle East and Africa 5,110 5,139 10,468 10,360 Asia-Pacific and Japan 3,141 2,935 6,461 5,996 Total net revenue $ 14,036 $ 14,003 $ 28,746 $ 28,520 |
Fair Value (Tables)
Fair Value (Tables) | 6 Months Ended |
Apr. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Assets and Liabilities Measured and Recorded at Fair Value on a Recurring Basis | The following table presents HP’s assets and liabilities that are measured at fair value on a recurring basis: As of April 30, 2019 As of October 31, 2018 Fair Value Measured Using Fair Value Measured Using Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total In millions Assets: Cash Equivalents: Corporate debt $ — $ 1,272 $ — $ 1,272 $ — $ 1,620 $ — $ 1,620 Financial institution instruments — — — — — 9 — 9 Government debt (1) 1,231 9 — 1,240 2,217 150 — 2,367 Available-for-Sale Investments: Corporate debt — 12 — 12 — 366 — 366 Financial institution instruments — — — — — 32 — 32 Government debt (1) — 5 — 5 — 313 — 313 Mutual funds 48 — — 48 47 — — 47 Marketable equity securities 6 — — 6 6 — — 6 Derivative Instruments: Foreign currency contracts — 429 — 429 — 508 7 515 Other derivatives — 2 — 2 — — — — Total Assets $ 1,285 $ 1,729 $ — $ 3,014 $ 2,270 $ 2,998 $ 7 $ 5,275 Liabilities: Derivative Instruments: Interest rate contracts $ — $ 8 $ — $ 8 $ — $ 23 $ — $ 23 Foreign currency contracts — 146 — 146 — 164 — 164 Other derivatives — — — — — 8 — 8 Total Liabilities $ — $ 154 $ — $ 154 $ — $ 195 $ — $ 195 (1) Government debt includes instruments such as U.S. treasury notes, U.S agency securities and non-U.S. government bonds. Money market funds invested in government debt and traded in active markets are included in Level 1. |
Financial Instruments (Tables)
Financial Instruments (Tables) | 6 Months Ended |
Apr. 30, 2019 | |
Investments, All Other Investments [Abstract] | |
Schedule of Cash Equivalents and Available-for-Sale Investments | Cash Equivalents and Available-for-Sale Investments As of April 30, 2019 As of October 31, 2018 Cost Gross Unrealized Gain Gross Unrealized Loss Fair Value Cost Gross Unrealized Gain Gross Unrealized Loss Fair Value In millions Cash Equivalents: Corporate debt $ 1,272 $ — $ — $ 1,272 $ 1,620 $ — $ — $ 1,620 Financial institution instruments — — — — 9 — — 9 Government debt 1,240 — — 1,240 2,367 — — 2,367 Total cash equivalents 2,512 — — 2,512 3,996 — — 3,996 Available-for-Sale Investments: Corporate debt (1) 12 — — 12 368 — (2 ) 366 Financial institution instruments (1) — — — — 32 — — 32 Government debt (1) 5 — — 5 314 — (1 ) 313 Marketable equity securities 4 2 — 6 4 2 — 6 Mutual funds 39 9 — 48 38 9 — 47 Total available-for-sale investments 60 11 — 71 756 11 (3 ) 764 Total cash equivalents and available-for-sale investments $ 2,572 $ 11 $ — $ 2,583 $ 4,752 $ 11 $ (3 ) $ 4,760 (1) HP classifies its marketable debt securities as available-for-sale investments within Other current assets on the Consolidated Condensed Balance Sheets, including those with maturity dates beyond one year, based on their highly liquid nature and availability for use in current operations. |
Schedule of Contractual Maturities of Available for-sale Debt Securities | Contractual maturities of investments in available-for-sale debt securities were as follows: As of April 30, 2019 Amortized Fair Value In millions Due in one year or less $ 17 $ 17 |
Schedule of Gross Notional and Fair Value of Derivative Financial Instruments in the Consolidated Condensed Balance Sheets | The gross notional and fair value of derivative instruments in the Consolidated Condensed Balance Sheets were as follows: As of April 30, 2019 As of October 31, 2018 Outstanding Gross Notional Other Current Assets Other Non-Current Assets Other Accrued Liabilities Other Non-Current Liabilities Outstanding Gross Notional Other Current Assets Other Non-Current Assets Other Accrued Liabilities Other Non-Current Liabilities In millions Derivatives designated as hedging instruments Fair value hedges: Interest rate contracts $ 750 $ — $ — $ — $ 8 $ 1,000 $ — $ — $ — $ 23 Cash flow hedges: Foreign currency contracts 16,182 283 129 99 42 17,147 386 107 86 52 Total derivatives designated as hedging instruments 16,932 283 129 99 50 18,147 386 107 86 75 Derivatives not designated as hedging instruments Foreign currency contracts 5,764 17 — 5 — 5,437 22 — 26 — Other derivatives 127 2 — — — 122 — — 8 — Total derivatives not designated as hedging instruments 5,891 19 — 5 — 5,559 22 — 34 — Total derivatives $ 22,823 $ 302 $ 129 $ 104 $ 50 $ 23,706 $ 408 $ 107 $ 120 $ 75 |
Schedule of Offsetting Assets | As of April 30, 2019 and October 31, 2018 , information related to the potential effect of HP’s master netting agreements and collateral security agreements was as follows: In the Consolidated Condensed Balance Sheets Gross Amounts Not Offset Gross Amount Recognized (i) Gross Amount Offset (ii) Net Amount Presented (iii) = (i)–(ii) Derivatives (iv) Financial Collateral (v) Net Amount (vi) = (iii)–(iv)–(v) In millions As of April 30, 2019 Derivative assets $ 431 $ — $ 431 $ 97 $ 312 (1) $ 22 Derivative liabilities $ 154 $ — $ 154 $ 97 $ 52 (2) $ 5 As of October 31, 2018 Derivative assets $ 515 $ — $ 515 $ 112 $ 299 (1) $ 104 Derivative liabilities $ 195 $ — $ 195 $ 112 $ 69 (2) $ 14 (1) Represents the cash collateral posted by counterparties as of the respective reporting date for HP’s asset position, net of derivative amounts that could be offset, as of, generally, two business days prior to the respective reporting date. (2) Represents the collateral posted by HP through re-use of counterparty cash collateral as of the respective reporting date for HP’s liability position, net of derivative amounts that could be offset, as of, generally, two business days prior to the respective reporting date. |
Schedule of Offsetting Liabilities | As of April 30, 2019 and October 31, 2018 , information related to the potential effect of HP’s master netting agreements and collateral security agreements was as follows: In the Consolidated Condensed Balance Sheets Gross Amounts Not Offset Gross Amount Recognized (i) Gross Amount Offset (ii) Net Amount Presented (iii) = (i)–(ii) Derivatives (iv) Financial Collateral (v) Net Amount (vi) = (iii)–(iv)–(v) In millions As of April 30, 2019 Derivative assets $ 431 $ — $ 431 $ 97 $ 312 (1) $ 22 Derivative liabilities $ 154 $ — $ 154 $ 97 $ 52 (2) $ 5 As of October 31, 2018 Derivative assets $ 515 $ — $ 515 $ 112 $ 299 (1) $ 104 Derivative liabilities $ 195 $ — $ 195 $ 112 $ 69 (2) $ 14 (1) Represents the cash collateral posted by counterparties as of the respective reporting date for HP’s asset position, net of derivative amounts that could be offset, as of, generally, two business days prior to the respective reporting date. (2) Represents the collateral posted by HP through re-use of counterparty cash collateral as of the respective reporting date for HP’s liability position, net of derivative amounts that could be offset, as of, generally, two business days prior to the respective reporting date. |
Schedule of Pre-Tax Effect of Derivative Instruments and Related Hedged Items in a Fair Value Hedging Relationship | The pre-tax effect of derivative instruments in cash flow hedging relationships for the three and six months ended April 30, 2019 was as follows: Gain Recognized in Other Comprehensive Income ("OCI") on Derivatives (Effective Portion) (Loss) Gain Reclassified from Accumulated OCI Into Three months ended April 30, 2019 Six months ended April 30, 2019 Location Three months ended April 30, 2019 Six months ended April 30, 2019 In millions In millions Cash flow hedges: Foreign currency contracts $ 198 $ 91 Net revenue $ — $ 191 Cost of revenue (6 ) (16 ) Operating expenses — (2 ) Total $ 198 $ 91 $ (6 ) $ 173 The pre-tax effect of derivative instruments in cash flow hedging relationships for the three and six months ended April 30, 2018 was as follows: Gain (Loss) Recognized in Other Comprehensive Income ("OCI") on Derivatives (Effective Portion) (Loss) Gain Reclassified from Accumulated OCI Into Three months ended April 30, 2018 Six months ended April 30, 2018 Location Three months ended April 30, 2018 Six months ended April 30, 2018 In millions In millions Cash flow hedges: Foreign currency contracts $ 297 $ (254 ) Net revenue $ (277 ) $ (329 ) Cost of revenue — (18 ) Operating expenses 1 1 Total $ 297 $ (254 ) $ (276 ) $ (346 ) |
Schedule of Pre-Tax Effect of Derivative Instruments in Cash Flow Hedging Relationships | The pre-tax effect of derivative instruments in cash flow hedging relationships for the three and six months ended April 30, 2019 was as follows: Gain Recognized in Other Comprehensive Income ("OCI") on Derivatives (Effective Portion) (Loss) Gain Reclassified from Accumulated OCI Into Three months ended April 30, 2019 Six months ended April 30, 2019 Location Three months ended April 30, 2019 Six months ended April 30, 2019 In millions In millions Cash flow hedges: Foreign currency contracts $ 198 $ 91 Net revenue $ — $ 191 Cost of revenue (6 ) (16 ) Operating expenses — (2 ) Total $ 198 $ 91 $ (6 ) $ 173 The pre-tax effect of derivative instruments in cash flow hedging relationships for the three and six months ended April 30, 2018 was as follows: Gain (Loss) Recognized in Other Comprehensive Income ("OCI") on Derivatives (Effective Portion) (Loss) Gain Reclassified from Accumulated OCI Into Three months ended April 30, 2018 Six months ended April 30, 2018 Location Three months ended April 30, 2018 Six months ended April 30, 2018 In millions In millions Cash flow hedges: Foreign currency contracts $ 297 $ (254 ) Net revenue $ (277 ) $ (329 ) Cost of revenue — (18 ) Operating expenses 1 1 Total $ 297 $ (254 ) $ (276 ) $ (346 ) |
Schedule of Pre-Tax Effect of Derivative Instruments not Designated as Hedging Instruments on the Consolidated Condensed Statements of Earnings | The pre-tax effect of derivative instruments not designated as hedging instruments recognized in Interest and Other, net in the Consolidated Condensed Statements of Earnings for the three and six months ended April 30, 2019 and 2018 was as follows: Three months ended April 30 Six months ended April 30 2019 2018 2019 2018 In millions Foreign currency contracts $ (18 ) $ 8 $ (58 ) $ (9 ) Other derivatives 5 (2 ) 19 — Total $ (13 ) $ 6 $ (39 ) $ (9 ) |
Borrowings (Tables)
Borrowings (Tables) | 6 Months Ended |
Apr. 30, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Notes Payable and Short-Term Borrowings | Notes Payable and Short-Term Borrowings As of April 30, 2019 As of October 31, 2018 Amount Weighted-Average Amount Weighted-Average In millions In millions Commercial paper $ — — % $ 854 2.5 % Current portion of long-term debt 252 3.7 % 565 3.1 % Notes payable to banks, lines of credit and other 38 1.9 % 44 1.7 % $ 290 $ 1,463 |
Schedule of Long-Term Debt | Long-Term Debt As of April 30, 2019 October 31, 2018 In millions U.S. Dollar Global Notes (1) 2009 Shelf Registration Statement: $1,350 issued at discount to par at a price of 99.827% in December 2010 at 3.75%, due December 2020 $ 648 $ 648 $1,250 issued at discount to par at a price of 99.799% in May 2011 at 4.3%, due June 2021 667 667 $1,000 issued at discount to par at a price of 99.816% in September 2011 at 4.375%, due September 2021 538 538 $1,500 issued at discount to par at a price of 99.707% in December 2011 at 4.65%, due December 2021 695 694 $500 issued at discount to par at a price of 99.771% in March 2012 at 4.05%, due September 2022 499 499 $1,200 issued at discount to par at a price of 99.863% in September 2011 at 6.0%, due September 2041 1,199 1,199 2012 Shelf Registration Statement: $750 issued at par in January 2014 at three-month USD LIBOR plus 0.94%, due January 2019 — 102 $1,250 issued at discount to par at a price of 99.954% in January 2014 at 2.75%, due January 2019 — 300 4,246 4,647 Other, including capital lease obligations, at 0.51%-8.47%, due in calendar years 2019-2029 782 487 Fair value adjustment related to hedged debt (11 ) (28 ) Unamortized debt issuance cost (16 ) (17 ) Current portion of long-term debt (252 ) (565 ) Total long-term debt $ 4,749 $ 4,524 (1) HP may redeem some or all of the fixed-rate U.S. Dollar Global Notes at any time in accordance with the terms thereof. The U.S. Dollar Global Notes are senior unsecured debt. |
Stockholders' Deficit (Tables)
Stockholders' Deficit (Tables) | 6 Months Ended |
Apr. 30, 2019 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Tax Effects Related to Other Comprehensive (Loss) Income | Tax effects related to Other Comprehensive Income (Loss) Three months ended April 30 Six months ended April 30 2019 2018 2019 2018 In millions Tax effect on change in unrealized components of available-for-sale debt securities: Tax benefit on unrealized losses arising during the period $ — $ — $ — $ 1 — — — 1 Tax effect on change in unrealized components of cash flow hedges: Tax (provision) benefit on unrealized gains (losses) arising during the period (36 ) (37 ) (16 ) 33 Tax (benefit) provision on losses (gains) reclassified into earnings (2 ) (29 ) 20 (32 ) (38 ) (66 ) 4 1 Tax effect on change in unrealized components of defined benefit plans: Tax benefit on losses arising during the period 1 — 1 — Tax provision on amortization of actuarial loss and prior service benefit (3 ) (3 ) (6 ) (6 ) Tax benefit on settlements and other — — 1 — (2 ) (3 ) (4 ) (6 ) Tax effect on change in cumulative translation adjustment (2 ) — (2 ) — Tax provision on other comprehensive income (loss) $ (42 ) $ (69 ) $ (2 ) $ (4 ) |
Schedule of Changes and Reclassifications Related to Other Comprehensive Income, Net of Taxes | Changes and reclassifications related to Other Comprehensive Income (Loss), net of taxes Three months ended April 30 Six months ended April 30 2019 2018 2019 2018 In millions Other comprehensive income (loss), net of taxes: Change in unrealized components of available-for-sale debt securities: Unrealized losses arising during the period $ — $ (2 ) $ — $ (4 ) Losses (gains) reclassified into earnings 3 — 3 (5 ) 3 (2 ) 3 (9 ) Change in unrealized components of cash flow hedges: Unrealized gains (losses) arising during the period 162 260 75 (221 ) Losses (gains) reclassified into earnings 4 247 (153 ) 314 166 507 (78 ) 93 Change in unrealized components of defined benefit plans: Losses arising during the period (3 ) — (3 ) — Amortization of actuarial loss and prior service benefit (1) 9 10 17 19 Settlements and other 1 — — 1 7 10 14 20 Change in cumulative translation adjustment 11 — 6 — Other comprehensive income (loss), net of taxes $ 187 $ 515 $ (55 ) $ 104 (1) These components are included in the computation of net pension and post-retirement benefit (credit) charges in Note 4, “Retirement and Post-Retirement Benefit Plans”. |
Schedule of Accumulated Other Comprehensive Loss, Net of Taxes | The components of accumulated other comprehensive income (loss), net of taxes and changes were as follows: Six months ended April 30, 2019 Net unrealized Net unrealized Unrealized Change in cumulative Accumulated In millions Balance at beginning of period $ 5 $ 291 $ (1,141 ) $ — $ (845 ) Other comprehensive income (loss) before reclassifications — 75 (3 ) (5 ) 67 Reclassifications of losses (gains) into earnings 3 (153 ) 17 11 (122 ) Balance at end of period $ 8 $ 213 $ (1,127 ) $ 6 $ (900 ) |
Net Earnings Per Share (Tables)
Net Earnings Per Share (Tables) | 6 Months Ended |
Apr. 30, 2019 | |
Earnings Per Share [Abstract] | |
Basic and Diluted Net Earnings Per Share Calculations | A reconciliation of the number of shares used for basic and diluted net EPS calculations is as follows: Three months ended April 30 Six months ended April 30 2019 2018 2019 2018 In millions, except per share amounts Numerator: Net earnings $ 782 $ 1,058 $ 1,585 $ 2,996 Denominator: Weighted-average shares used to compute basic net EPS 1,529 1,630 1,543 1,640 Dilutive effect of employee stock plans 7 16 8 18 Weighted-average shares used to compute diluted net EPS 1,536 1,646 1,551 1,658 Net earnings per share: Basic $ 0.51 $ 0.65 $ 1.03 $ 1.83 Diluted $ 0.51 $ 0.64 $ 1.02 $ 1.81 Anti-dilutive weighted-average stock-based compensation awards (1) 8 — 6 — (1) HP excludes from the calculation of diluted net EPS stock options and restricted stock units where the assumed proceeds exceed the average market price, because their effect would be anti-dilutive. The assumed proceeds of a stock option include the sum of its exercise price, and average unrecognized compensation cost. The assumed proceeds of a restricted stock unit represent unrecognized compensation cost. |
Guarantees, Indemnifications,_2
Guarantees, Indemnifications, and Warranties (Tables) | 6 Months Ended |
Apr. 30, 2019 | |
Guarantees [Abstract] | |
Changes in Aggregate Product Warranty Liabilities and Changes | HP’s aggregate product warranty liabilities and changes were as follows: Six months ended April 30, 2019 In millions Balance at beginning of period $ 915 Accruals for warranties issued 519 Adjustments related to pre-existing warranties (including changes in estimates) (1 ) Settlements made (in cash or in kind) (524 ) Balance at end of period $ 909 |
Acquisitions (Tables)
Acquisitions (Tables) | 6 Months Ended |
Apr. 30, 2019 | |
Business Combinations [Abstract] | |
Schedule of Preliminary Purchase Price Allocation | The table below presents the preliminary purchase price allocation for HP's acquisition as of November 1, 2018 and reflects various preliminary fair value estimates and analyses, including preliminary work performed by third-party valuation specialists, which are subject to change within the measurement period as valuations are finalized. The primary areas of the preliminary purchase price allocation that are not yet finalized relate to the fair values of certain tangible assets and liabilities acquired, the valuation of intangible assets acquired and residual goodwill. HP expects to continue to obtain information to assist it in determining the fair value of the net assets acquired at the acquisition date during the measurement period. In millions Goodwill $ 375 Amortizable intangible assets 300 Net liabilities assumed (186 ) Total fair value of consideration $ 489 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 6 Months Ended |
Apr. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | HP’s intangible assets were composed of: As of April 30, 2019 As of October 31, 2018 Gross Accumulated Amortization Net Gross Accumulated Amortization Net In millions Customer contracts, customer lists and distribution agreements $ 391 $ 105 $ 286 $ 112 $ 88 $ 24 Technology, patents and trade name 628 213 415 601 172 429 Total intangible assets $ 1,019 $ 318 $ 701 $ 713 $ 260 $ 453 During the six months ended April 30, 2019, the increase in gross intangible assets was primarily due to intangible assets resulting from the acquisition of the Apogee group, which are based on preliminary fair value estimates of the assets acquired. The weighted-average useful lives of intangible assets acquired during the period are as follows: Weighted-Average Useful Life Customer contracts, customer lists and distribution agreements 9 Technology, patents and trade name 7 |
Schedule of Estimated Future Amortization Expense | As of April 30, 2019, estimated future amortization expense related to intangible assets was as follows: Fiscal year In millions Remainder of 2019 $ 57 2020 115 2021 114 2022 114 2023 113 Thereafter 188 Total $ 701 |
Basis of Presentation - Narrati
Basis of Presentation - Narrative (Details) - USD ($) $ in Millions | Nov. 01, 2018 | Apr. 30, 2018 | Apr. 30, 2018 | Apr. 30, 2019 | Oct. 31, 2018 |
Retained Earnings Adjustments [Line Items] | |||||
Accumulated deficit | $ 1,036 | $ 1,325 | $ 473 | ||
ASU 2017-07 | Selling, general and administrative expenses | |||||
Retained Earnings Adjustments [Line Items] | |||||
Reduction in interest and other | $ 58 | $ 118 | |||
ASU 2017-07 | Interest and other | |||||
Retained Earnings Adjustments [Line Items] | |||||
Reduction in interest and other | $ 58 | $ 118 | |||
ASU 2016-16 | |||||
Retained Earnings Adjustments [Line Items] | |||||
Prepaid Taxes | 353 | ||||
Accumulated deficit | $ 353 | ||||
Adjustments under Topic 606 | |||||
Retained Earnings Adjustments [Line Items] | |||||
Decrease in retained earnings | $ (212) |
Basis of Presentation - Schedul
Basis of Presentation - Schedule of New Accounting Pronouncement Adjustments (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Apr. 30, 2019 | Apr. 30, 2018 | Apr. 30, 2019 | Apr. 30, 2018 | Nov. 01, 2018 | Oct. 31, 2018 | |
ASSETS | ||||||
Accounts receivable, net | $ 5,414 | $ 5,414 | $ 5,326 | $ 5,113 | ||
Inventory | 5,394 | 5,394 | 5,859 | 6,062 | ||
Other current assets | 3,921 | 3,921 | 5,159 | 5,046 | ||
Other non-current assets | 4,900 | 4,900 | 4,839 | 5,069 | ||
LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||
Taxes on earnings | 206 | 206 | 301 | 340 | ||
Other accrued liabilities | 8,042 | 8,042 | 7,873 | 7,376 | ||
Accumulated other comprehensive loss | (900) | (900) | (847) | (845) | ||
Accumulated deficit | (1,325) | (1,325) | (1,036) | (473) | ||
Net revenue | 14,036 | $ 14,003 | 28,746 | $ 28,520 | ||
Selling, general and administrative | 1,339 | 1,318 | 2,587 | 2,547 | ||
Earnings from operations | 928 | 906 | 1,854 | 1,819 | ||
Earnings before taxes | 883 | 83 | 1,783 | 988 | ||
Provision for taxes | (101) | 975 | (198) | 2,008 | ||
Net earnings | 782 | $ 1,058 | 1,585 | $ 2,996 | ||
As Reported on October 31, 2018 | ||||||
ASSETS | ||||||
Accounts receivable, net | 5,113 | |||||
Inventory | 6,062 | |||||
Other current assets | 5,046 | |||||
Other non-current assets | 5,069 | |||||
LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||
Taxes on earnings | 340 | |||||
Other accrued liabilities | 7,376 | |||||
Accumulated other comprehensive loss | (845) | |||||
Accumulated deficit | $ (473) | |||||
Adjustments under Topic 606 | As Restated on November 1, 2018 | ||||||
ASSETS | ||||||
Accounts receivable, net | 213 | |||||
Inventory | (203) | |||||
Other current assets | 203 | |||||
Other non-current assets | 33 | |||||
LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||
Taxes on earnings | (39) | |||||
Other accrued liabilities | 497 | |||||
Accumulated other comprehensive loss | 0 | |||||
Accumulated deficit | (212) | |||||
ASU 2016-16 | ||||||
LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||
Accumulated deficit | (353) | (353) | ||||
ASU 2016-16 | As Restated on November 1, 2018 | ||||||
LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||
Accumulated deficit | (353) | |||||
Other | As Restated on November 1, 2018 | ||||||
ASSETS | ||||||
Accounts receivable, net | 0 | |||||
Inventory | 0 | |||||
Other current assets | (90) | |||||
Other non-current assets | (263) | |||||
LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||
Taxes on earnings | 0 | |||||
Other accrued liabilities | 0 | |||||
Accumulated other comprehensive loss | (2) | |||||
Accumulated deficit | $ (351) | |||||
Effect of Adoption | Adjustments under Topic 606 | ||||||
ASSETS | ||||||
Accounts receivable, net | (168) | (168) | ||||
Inventory | 170 | 170 | ||||
Other current assets | (170) | (170) | ||||
Other non-current assets | (30) | (30) | ||||
LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||
Taxes on earnings | 33 | 33 | ||||
Other accrued liabilities | (404) | (404) | ||||
Accumulated deficit | 173 | 173 | ||||
Net revenue | (12) | (48) | ||||
Earnings from operations | (12) | (48) | ||||
Earnings before taxes | (12) | (48) | ||||
Provision for taxes | 2 | 9 | ||||
Net earnings | (10) | (39) | ||||
Balances Without Adoption of Topic 606 | ||||||
ASSETS | ||||||
Accounts receivable, net | 5,246 | 5,246 | ||||
Inventory | 5,564 | 5,564 | ||||
Other current assets | 3,751 | 3,751 | ||||
Other non-current assets | 4,870 | 4,870 | ||||
LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||
Taxes on earnings | 239 | 239 | ||||
Other accrued liabilities | 7,638 | 7,638 | ||||
Accumulated deficit | (1,152) | (1,152) | ||||
Net revenue | 14,024 | 28,698 | ||||
Earnings from operations | 916 | 1,806 | ||||
Earnings before taxes | 871 | 1,735 | ||||
Provision for taxes | (99) | (189) | ||||
Net earnings | $ 772 | $ 1,546 |
Segment Information - Narrative
Segment Information - Narrative (Details) | 6 Months Ended |
Apr. 30, 2019segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 3 |
Segment Information - Schedule
Segment Information - Schedule of Reconciliation of Segment Operating Results to HP Consolidated Results (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Apr. 30, 2019 | Apr. 30, 2018 | Apr. 30, 2019 | Apr. 30, 2018 | |
Segment Information | ||||
Net revenue | $ 14,036 | $ 14,003 | $ 28,746 | $ 28,520 |
Total segment earnings from operations | 928 | 906 | 1,854 | 1,819 |
Restructuring and other charges | (69) | (57) | (124) | (88) |
Acquisition-related charges | (11) | (45) | (21) | (87) |
Amortization of intangible assets | (29) | (20) | (58) | (40) |
Interest and other, net | (45) | (823) | (71) | (831) |
Earnings before taxes | 883 | 83 | 1,783 | 988 |
Operating segments | ||||
Segment Information | ||||
Net revenue | 14,037 | 14,004 | 28,751 | 28,521 |
Total segment earnings from operations | 1,200 | 1,145 | 2,407 | 2,260 |
Other | ||||
Segment Information | ||||
Net revenue | (1) | (1) | (5) | (1) |
Corporate and unallocated costs and other | (97) | (54) | (177) | (78) |
Stock-based compensation expense | (66) | (63) | (173) | (148) |
Restructuring and other charges | (69) | (57) | (124) | (88) |
Acquisition-related charges | (11) | (45) | (21) | (87) |
Amortization of intangible assets | (29) | (20) | (58) | (40) |
Interest and other, net | (45) | (823) | (71) | (831) |
Personal Systems | Operating segments | ||||
Segment Information | ||||
Net revenue | 8,921 | 8,762 | 18,578 | 18,202 |
Total segment earnings from operations | 385 | 329 | 795 | 664 |
Printing | Operating segments | ||||
Segment Information | ||||
Net revenue | 5,116 | 5,241 | 10,172 | 10,317 |
Total segment earnings from operations | 839 | 837 | 1,660 | 1,636 |
Corporate Investments | Operating segments | ||||
Segment Information | ||||
Net revenue | 0 | 1 | 1 | 2 |
Total segment earnings from operations | $ (24) | $ (21) | $ (48) | $ (40) |
Segment Information - Schedul_2
Segment Information - Schedule of Net Revenue by Segment and Business Unit (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Apr. 30, 2019 | Apr. 30, 2018 | Apr. 30, 2019 | Apr. 30, 2018 | |
Segment Information | ||||
Total net revenue | $ 14,036 | $ 14,003 | $ 28,746 | $ 28,520 |
Total segment net revenue | ||||
Segment Information | ||||
Total net revenue | 14,037 | 14,004 | 28,751 | 28,521 |
Total segment net revenue | Personal Systems | ||||
Segment Information | ||||
Total net revenue | 8,921 | 8,762 | 18,578 | 18,202 |
Total segment net revenue | Personal Systems | Notebooks | ||||
Segment Information | ||||
Total net revenue | 5,099 | 5,153 | 11,018 | 10,748 |
Total segment net revenue | Personal Systems | Desktops | ||||
Segment Information | ||||
Total net revenue | 2,940 | 2,752 | 5,797 | 5,707 |
Total segment net revenue | Personal Systems | Workstations | ||||
Segment Information | ||||
Total net revenue | 569 | 538 | 1,131 | 1,081 |
Total segment net revenue | Personal Systems | Other | ||||
Segment Information | ||||
Total net revenue | 313 | 319 | 632 | 666 |
Total segment net revenue | Printing | ||||
Segment Information | ||||
Total net revenue | 5,116 | 5,241 | 10,172 | 10,317 |
Total segment net revenue | Printing | Supplies | ||||
Segment Information | ||||
Total net revenue | 3,331 | 3,434 | 6,598 | 6,785 |
Total segment net revenue | Printing | Commercial Hardware | ||||
Segment Information | ||||
Total net revenue | 1,179 | 1,145 | 2,269 | 2,182 |
Total segment net revenue | Printing | Consumer Hardware | ||||
Segment Information | ||||
Total net revenue | 606 | 662 | 1,305 | 1,350 |
Total segment net revenue | Corporate Investments | ||||
Segment Information | ||||
Total net revenue | 0 | 1 | 1 | 2 |
Other | ||||
Segment Information | ||||
Total net revenue | $ (1) | $ (1) | $ (5) | $ (1) |
Restructuring and Other Charg_3
Restructuring and Other Charges - Summary of Cost Saving Plan Activities (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |
Apr. 30, 2019 | Apr. 30, 2019 | Apr. 30, 2018 | |
Restructuring Cost and Reserve [Line Items] | |||
Accrued balance, beginning of the period | $ 59 | $ 108 | |
Charges | $ 63 | 116 | 64 |
Cash payments | (72) | (120) | |
Non-cash and other adjustments | (14) | 1 | |
Accrued balance, beginning of the period | 89 | 89 | 53 |
Total costs incurred to date as of April 30, 2019 | 1,767 | 1,767 | |
Reflected in Consolidated Condensed Balance Sheets | |||
Other accrued liabilities | 88 | 88 | |
Other non-current liabilities | 1 | 1 | |
Fiscal 2017 Plan | Severance | |||
Restructuring Cost and Reserve [Line Items] | |||
Accrued balance, beginning of the period | 50 | 76 | |
Charges | 50 | 97 | 52 |
Cash payments | (61) | (86) | |
Non-cash and other adjustments | (3) | 0 | |
Accrued balance, beginning of the period | 83 | 83 | 42 |
Total costs incurred to date as of April 30, 2019 | 350 | 350 | |
Reflected in Consolidated Condensed Balance Sheets | |||
Other accrued liabilities | 83 | 83 | |
Other non-current liabilities | 0 | 0 | |
Fiscal 2017 Plan | Infrastructure and other | |||
Restructuring Cost and Reserve [Line Items] | |||
Accrued balance, beginning of the period | 0 | 19 | |
Charges | 13 | 19 | 12 |
Cash payments | (8) | (31) | |
Non-cash and other adjustments | (11) | 0 | |
Accrued balance, beginning of the period | 0 | 0 | 0 |
Total costs incurred to date as of April 30, 2019 | 100 | 100 | |
Reflected in Consolidated Condensed Balance Sheets | |||
Other accrued liabilities | 0 | 0 | |
Other non-current liabilities | 0 | 0 | |
Other prior year plans | |||
Restructuring Cost and Reserve [Line Items] | |||
Accrued balance, beginning of the period | 9 | 13 | |
Charges | 0 | 0 | 0 |
Cash payments | (3) | (3) | |
Non-cash and other adjustments | 0 | 1 | |
Accrued balance, beginning of the period | 6 | 6 | $ 11 |
Total costs incurred to date as of April 30, 2019 | 1,317 | 1,317 | |
Reflected in Consolidated Condensed Balance Sheets | |||
Other accrued liabilities | 5 | 5 | |
Other non-current liabilities | $ 1 | $ 1 |
Restructuring and Other Charg_4
Restructuring and Other Charges - Fiscal 2017 Plan (Details) - Fiscal 2017 Plan $ in Millions | May 26, 2018USD ($)employee |
Restructuring Cost and Reserve [Line Items] | |
Expected aggregate pre-tax charges | $ | $ 700 |
Minimum | |
Restructuring Cost and Reserve [Line Items] | |
Expected positions to be eliminated | 4,500 |
Maximum | |
Restructuring Cost and Reserve [Line Items] | |
Expected positions to be eliminated | 5,000 |
Restructuring and Other Charg_5
Restructuring and Other Charges - Other Charges (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Apr. 30, 2019 | Apr. 30, 2018 | Apr. 30, 2019 | Apr. 30, 2018 | |
Restructuring and Related Activities [Abstract] | ||||
Other charges | $ 6 | $ 11 | $ 8 | $ 24 |
Retirement and Post-Retiremen_3
Retirement and Post-Retirement Benefit Plans - Schedule of Pension and Post-Retirement Benefit (Credit) Cost (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Apr. 30, 2019 | Apr. 30, 2018 | Apr. 30, 2019 | Apr. 30, 2018 | |
Post-Retirement Benefit Plans | ||||
Retirement and post-retirement benefit plans | ||||
Service cost | $ 0 | $ 0 | $ 0 | $ 0 |
Interest cost | 4 | 4 | 8 | 8 |
Expected return on plan assets | (5) | (6) | (10) | (12) |
Amortization and deferrals: | ||||
Actuarial loss (gain) | (8) | (4) | (16) | (8) |
Prior service benefit | (3) | (5) | (6) | (10) |
Net periodic (credit) benefit cost | (12) | (11) | (24) | (22) |
Settlement loss | 0 | 0 | 0 | 0 |
Total periodic benefit (credit) cost | (12) | (11) | (24) | (22) |
U.S. | Defined Benefit Plans | ||||
Retirement and post-retirement benefit plans | ||||
Service cost | 0 | 0 | 0 | 0 |
Interest cost | 123 | 113 | 246 | 226 |
Expected return on plan assets | (146) | (179) | (291) | (360) |
Amortization and deferrals: | ||||
Actuarial loss (gain) | 15 | 16 | 30 | 31 |
Prior service benefit | 0 | 0 | 0 | 0 |
Net periodic (credit) benefit cost | (8) | (50) | (15) | (103) |
Settlement loss | 1 | 0 | 1 | 1 |
Total periodic benefit (credit) cost | (7) | (50) | (14) | (102) |
Non-U.S. | Defined Benefit Plans | ||||
Retirement and post-retirement benefit plans | ||||
Service cost | 15 | 14 | 29 | 28 |
Interest cost | 6 | 6 | 12 | 12 |
Expected return on plan assets | (9) | (10) | (19) | (20) |
Amortization and deferrals: | ||||
Actuarial loss (gain) | 8 | 7 | 16 | 14 |
Prior service benefit | 0 | (1) | (1) | (2) |
Net periodic (credit) benefit cost | 20 | 16 | 37 | 32 |
Settlement loss | 0 | 0 | 0 | 0 |
Total periodic benefit (credit) cost | $ 20 | $ 16 | $ 37 | $ 32 |
Retirement and Post-Retiremen_4
Retirement and Post-Retirement Benefit Plans - Narrative (Details) $ in Millions | 6 Months Ended |
Apr. 30, 2019USD ($) | |
Post-Retirement Benefit Plans | |
Retirement and post-retirement benefit plans | |
Anticipated contributions | $ 6 |
Non-U.S. | Defined Benefit Plans | |
Retirement and post-retirement benefit plans | |
Anticipated contributions | 46 |
Contributions to benefit plans | 15 |
U.S. | Non-qualified plan | |
Retirement and post-retirement benefit plans | |
Anticipated contributions | 32 |
Contributions to benefit plans | $ 17 |
Taxes on Earnings (Details)
Taxes on Earnings (Details) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Apr. 30, 2019USD ($)country | Apr. 30, 2018USD ($) | Jan. 31, 2018USD ($) | Apr. 30, 2019USD ($)country | Apr. 30, 2018USD ($) | |
Income Tax Disclosure [Abstract] | |||||
Effective tax rate (percent) | 11.40% | (1162.00%) | 11.10% | (203.00%) | |
Net tax benefit | $ 40 | $ 1,100 | $ 49 | $ 2,200 | |
One-time items | 42 | 48 | |||
Tax benefits related to restructuring and other charges | 14 | 26 | |||
Uncertain tax position charges | 12 | 8 | 32 | 51 | |
Other charges | 4 | 14 | |||
Income tax benefit from tax reform adjustments | 21 | ||||
Excess tax benefits from stock options, restricted stock and performance share units | 20 | ||||
Provisional tax benefit | $ 1,100 | ||||
Deferred tax liability on unremitted earnings | 5,500 | ||||
Provisional deemed repatriation tax | 3,200 | ||||
Remeasurement of deferred assets and liabilities | $ 1,200 | ||||
Provisional tax expense | 379 | ||||
Adjustment to the provisional deemed repatriation tax | 43 | ||||
Tax benefits related to audit settlements | 1,400 | 1,500 | |||
Tax benefits related other tax charges | 33 | 33 | |||
Excess tax benefits from stock options, restricted stock units and performance-adjusted restricted stock units | 6 | 34 | |||
Unrecognized tax benefits | 7,800 | 7,800 | |||
Unrecognized tax benefits that would affect effective tax rate if realized | 1,500 | 1,500 | |||
Accrued income tax payable for interest and penalties | 193 | $ 141 | $ 193 | $ 141 | |
Likelihood of no resolution period | 12 months | ||||
Conclusion of federal, foreign and state tax issues, period | 12 months | ||||
Reasonably possible decrease in existing unrecognized tax benefits within the next 12 months | 6,400 | $ 6,400 | |||
Unrecognized tax benefits that would affect effective tax rate | $ 706 | $ 706 | |||
Other countries with income tax jurisdiction | country | 60 | 60 |
Supplementary Financial Infor_3
Supplementary Financial Information - Accounts Receivable (Details) - USD ($) $ in Millions | Apr. 30, 2019 | Nov. 01, 2018 | Oct. 31, 2018 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Accounts receivable | $ 5,526 | $ 5,242 | |
Allowance for doubtful accounts | (112) | (129) | |
Accounts receivable | $ 5,414 | $ 5,326 | $ 5,113 |
Supplementary Financial Infor_4
Supplementary Financial Information - Allowance for Doubtful Accounts (Details) $ in Millions | 6 Months Ended |
Apr. 30, 2019USD ($) | |
Allowance for Doubtful Accounts Receivable [Roll Forward] | |
Balance at beginning of period | $ 129 |
Provision for doubtful accounts | 24 |
Deductions, net of recoveries | (41) |
Balance at end of period | $ 112 |
Supplementary Financial Infor_5
Supplementary Financial Information - Schedule of Transferred Trade Receivables Not Collected from Third Parties (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Apr. 30, 2019 | Apr. 30, 2018 | Apr. 30, 2019 | Apr. 30, 2018 | |
Trade Receivables Sold and Cash Received Roll Forward | ||||
Balance at beginning of period | $ 194 | $ 172 | $ 165 | $ 147 |
Trade receivables sold | 2,490 | 2,434 | 5,525 | 5,370 |
Cash receipts | (2,498) | (2,430) | (5,507) | (5,351) |
Foreign currency and other | (4) | (5) | (1) | 5 |
Balance at end of period | $ 182 | $ 171 | $ 182 | $ 171 |
Supplementary Financial Infor_6
Supplementary Financial Information - Inventory (Details) - USD ($) $ in Millions | Apr. 30, 2019 | Nov. 01, 2018 | Oct. 31, 2018 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Finished goods | $ 3,544 | $ 4,019 | |
Purchased parts and fabricated assemblies | 1,850 | 2,043 | |
Inventory | $ 5,394 | $ 5,859 | $ 6,062 |
Supplementary Financial Infor_7
Supplementary Financial Information - Other Current Assets (Details) - USD ($) $ in Millions | Apr. 30, 2019 | Nov. 01, 2018 | Oct. 31, 2018 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Supplier and other receivables | $ 1,822 | $ 2,025 | |
Prepaid and other current assets | 1,216 | 1,445 | |
Value-added taxes receivable | 866 | 865 | |
Available-for-sale investments | 17 | 711 | |
Other current assets | $ 3,921 | $ 5,159 | $ 5,046 |
Supplementary Financial Infor_8
Supplementary Financial Information - Property Plant & Equipment, net (Details) - USD ($) $ in Millions | Apr. 30, 2019 | Oct. 31, 2018 |
Property, Plant and Equipment, Net | ||
Property, plant and equipment, gross | $ 6,505 | $ 6,109 |
Accumulated depreciation | (4,093) | (3,911) |
Property, plant and equipment, net | 2,412 | 2,198 |
Land, buildings and leasehold improvements | ||
Property, Plant and Equipment, Net | ||
Property, plant and equipment, gross | 1,965 | 1,893 |
Machinery and equipment, including equipment held for lease | ||
Property, Plant and Equipment, Net | ||
Property, plant and equipment, gross | $ 4,540 | $ 4,216 |
Supplementary Financial Infor_9
Supplementary Financial Information - Other Non-Current Assets (Details) - USD ($) $ in Millions | Apr. 30, 2019 | Nov. 01, 2018 | Oct. 31, 2018 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Deferred tax assets | $ 2,288 | $ 2,431 | |
Tax indemnifications receivable | 868 | 953 | |
Intangible assets | 701 | 453 | |
Other | 1,043 | 1,232 | |
Other non-current assets | 4,900 | $ 4,839 | 5,069 |
Available-for-sale investments | $ 54 | $ 53 |
Supplementary Financial Info_10
Supplementary Financial Information - Other Accrued Liabilities (Details) - USD ($) $ in Millions | Apr. 30, 2019 | Nov. 01, 2018 | Oct. 31, 2018 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Sales and marketing programs | $ 3,104 | $ 2,758 | |
Deferred revenue | 1,138 | 1,095 | |
Other accrued taxes | 916 | 982 | |
Warranty | 657 | 673 | |
Other | 2,227 | 1,868 | |
Other accrued liabilities | $ 8,042 | $ 7,873 | $ 7,376 |
Supplementary Financial Info_11
Supplementary Financial Information - Other Non-Current Liabilities (Details) - USD ($) $ in Millions | Apr. 30, 2019 | Oct. 31, 2018 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Tax liability | $ 1,978 | $ 2,063 |
Pension, post-retirement, and post-employment liabilities | 1,586 | 1,645 |
Deferred revenue | 1,026 | 1,005 |
Deferred tax liability | 52 | 100 |
Other | 839 | 793 |
Other non-current liabilities | $ 5,481 | $ 5,606 |
Supplementary Financial Info_12
Supplementary Financial Information - Interest and Other, Net (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Apr. 30, 2019 | Apr. 30, 2018 | Apr. 30, 2019 | Apr. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Change in Tax Indemnification | $ 671 | $ 671 | ||
Tax indemnifications | $ 5 | (671) | $ 15 | (673) |
Loss on extinguishment of debt | 0 | (126) | 0 | (126) |
Interest expense on borrowings | (61) | (88) | (125) | (175) |
Other, net | 11 | 62 | 39 | 143 |
Nonoperating Income (Expense) | $ (45) | $ (823) | $ (71) | $ (831) |
Supplementary Financial Info_13
Supplementary Financial Information - Net revenue by region (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Apr. 30, 2019 | Apr. 30, 2018 | Apr. 30, 2019 | Apr. 30, 2018 | |
Disaggregation of Revenue [Line Items] | ||||
Total net revenue | $ 14,036 | $ 14,003 | $ 28,746 | $ 28,520 |
Americas | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenue | 5,785 | 5,929 | 11,817 | 12,164 |
Europe, Middle East and Africa | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenue | 5,110 | 5,139 | 10,468 | 10,360 |
Asia-Pacific and Japan | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenue | $ 3,141 | $ 2,935 | $ 6,461 | $ 5,996 |
Supplementary Financial Info_14
Supplementary Financial Information - Value of Remaining Performance Obligations (Details) $ in Billions | Apr. 30, 2019USD ($) |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Remaining performance obligations | $ 4.4 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-05-01 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Remaining performance obligations | $ 1.8 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligations period | 12 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-05-01 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Remaining performance obligations | $ 2.6 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligations period |
Supplementary Financial Info_15
Supplementary Financial Information - Costs of Obtaining Contracts and Contract Liabilities (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |
Apr. 30, 2019 | Apr. 30, 2019 | Oct. 31, 2018 | |
Capitalized Contract Cost [Line Items] | |||
Contract cost amortization | $ 43 | ||
Contract liability | $ 2,000 | 2,000 | $ 1,900 |
Revenue recognized | 526 | ||
Deferred contract fulfillment | |||
Capitalized Contract Cost [Line Items] | |||
Capitalized contract costs | 40 | 40 | |
Acquisition costs | |||
Capitalized Contract Cost [Line Items] | |||
Capitalized contract costs | $ 35 | $ 35 |
Fair Value (Details)
Fair Value (Details) - USD ($) $ in Millions | Apr. 30, 2019 | Oct. 31, 2018 |
Assets: | ||
Cash Equivalents | $ 2,512 | $ 3,996 |
Derivative Instruments | 431 | 515 |
Liabilities: | ||
Derivative Instruments | 154 | 195 |
Fair value, short- and long-term debt | 5,200 | 6,000 |
Carrying value, short- and long-term debt | 5,000 | 6,000 |
Corporate debt | ||
Assets: | ||
Cash Equivalents | 1,272 | 1,620 |
Financial institution instruments | ||
Assets: | ||
Cash Equivalents | 0 | 9 |
Government debt | ||
Assets: | ||
Cash Equivalents | 1,240 | 2,367 |
Fair Value Measured on a Recurring Basis | ||
Assets: | ||
Total Assets | 3,014 | 5,275 |
Liabilities: | ||
Total Liabilities | 154 | 195 |
Fair Value Measured on a Recurring Basis | Corporate debt | ||
Assets: | ||
Cash Equivalents | 1,272 | 1,620 |
Available-for-Sale Investments | 12 | 366 |
Fair Value Measured on a Recurring Basis | Financial institution instruments | ||
Assets: | ||
Cash Equivalents | 0 | 9 |
Available-for-Sale Investments | 0 | 32 |
Fair Value Measured on a Recurring Basis | Government debt | ||
Assets: | ||
Cash Equivalents | 1,240 | 2,367 |
Available-for-Sale Investments | 5 | 313 |
Fair Value Measured on a Recurring Basis | Mutual funds | ||
Assets: | ||
Available-for-Sale Investments | 48 | 47 |
Fair Value Measured on a Recurring Basis | Marketable equity securities | ||
Assets: | ||
Available-for-Sale Investments | 6 | 6 |
Fair Value Measured on a Recurring Basis | Interest rate contracts | ||
Liabilities: | ||
Derivative Instruments | 8 | 23 |
Fair Value Measured on a Recurring Basis | Foreign currency contracts | ||
Assets: | ||
Derivative Instruments | 429 | 515 |
Liabilities: | ||
Derivative Instruments | 146 | 164 |
Fair Value Measured on a Recurring Basis | Other derivatives | ||
Assets: | ||
Derivative Instruments | 2 | 0 |
Liabilities: | ||
Derivative Instruments | 0 | 8 |
Fair Value Measured on a Recurring Basis | Level 1 | ||
Assets: | ||
Total Assets | 1,285 | 2,270 |
Liabilities: | ||
Total Liabilities | 0 | 0 |
Fair Value Measured on a Recurring Basis | Level 1 | Corporate debt | ||
Assets: | ||
Cash Equivalents | 0 | 0 |
Available-for-Sale Investments | 0 | 0 |
Fair Value Measured on a Recurring Basis | Level 1 | Financial institution instruments | ||
Assets: | ||
Cash Equivalents | 0 | 0 |
Available-for-Sale Investments | 0 | 0 |
Fair Value Measured on a Recurring Basis | Level 1 | Government debt | ||
Assets: | ||
Cash Equivalents | 1,231 | 2,217 |
Available-for-Sale Investments | 0 | 0 |
Fair Value Measured on a Recurring Basis | Level 1 | Mutual funds | ||
Assets: | ||
Available-for-Sale Investments | 48 | 47 |
Fair Value Measured on a Recurring Basis | Level 1 | Marketable equity securities | ||
Assets: | ||
Available-for-Sale Investments | 6 | 6 |
Fair Value Measured on a Recurring Basis | Level 1 | Interest rate contracts | ||
Liabilities: | ||
Derivative Instruments | 0 | 0 |
Fair Value Measured on a Recurring Basis | Level 1 | Foreign currency contracts | ||
Assets: | ||
Derivative Instruments | 0 | 0 |
Liabilities: | ||
Derivative Instruments | 0 | 0 |
Fair Value Measured on a Recurring Basis | Level 1 | Other derivatives | ||
Assets: | ||
Derivative Instruments | 0 | 0 |
Liabilities: | ||
Derivative Instruments | 0 | 0 |
Fair Value Measured on a Recurring Basis | Level 2 | ||
Assets: | ||
Total Assets | 1,729 | 2,998 |
Liabilities: | ||
Total Liabilities | 154 | 195 |
Fair Value Measured on a Recurring Basis | Level 2 | Corporate debt | ||
Assets: | ||
Cash Equivalents | 1,272 | 1,620 |
Available-for-Sale Investments | 12 | 366 |
Fair Value Measured on a Recurring Basis | Level 2 | Financial institution instruments | ||
Assets: | ||
Cash Equivalents | 0 | 9 |
Available-for-Sale Investments | 0 | 32 |
Fair Value Measured on a Recurring Basis | Level 2 | Government debt | ||
Assets: | ||
Cash Equivalents | 9 | 150 |
Available-for-Sale Investments | 5 | 313 |
Fair Value Measured on a Recurring Basis | Level 2 | Mutual funds | ||
Assets: | ||
Available-for-Sale Investments | 0 | 0 |
Fair Value Measured on a Recurring Basis | Level 2 | Marketable equity securities | ||
Assets: | ||
Available-for-Sale Investments | 0 | 0 |
Fair Value Measured on a Recurring Basis | Level 2 | Interest rate contracts | ||
Liabilities: | ||
Derivative Instruments | 8 | 23 |
Fair Value Measured on a Recurring Basis | Level 2 | Foreign currency contracts | ||
Assets: | ||
Derivative Instruments | 429 | 508 |
Liabilities: | ||
Derivative Instruments | 146 | 164 |
Fair Value Measured on a Recurring Basis | Level 2 | Other derivatives | ||
Assets: | ||
Derivative Instruments | 2 | 0 |
Liabilities: | ||
Derivative Instruments | 0 | 8 |
Fair Value Measured on a Recurring Basis | Level 3 | ||
Assets: | ||
Total Assets | 0 | 7 |
Liabilities: | ||
Total Liabilities | 0 | 0 |
Fair Value Measured on a Recurring Basis | Level 3 | Corporate debt | ||
Assets: | ||
Cash Equivalents | 0 | 0 |
Available-for-Sale Investments | 0 | 0 |
Fair Value Measured on a Recurring Basis | Level 3 | Financial institution instruments | ||
Assets: | ||
Cash Equivalents | 0 | 0 |
Available-for-Sale Investments | 0 | 0 |
Fair Value Measured on a Recurring Basis | Level 3 | Government debt | ||
Assets: | ||
Cash Equivalents | 0 | 0 |
Available-for-Sale Investments | 0 | 0 |
Fair Value Measured on a Recurring Basis | Level 3 | Mutual funds | ||
Assets: | ||
Available-for-Sale Investments | 0 | 0 |
Fair Value Measured on a Recurring Basis | Level 3 | Marketable equity securities | ||
Assets: | ||
Available-for-Sale Investments | 0 | 0 |
Fair Value Measured on a Recurring Basis | Level 3 | Interest rate contracts | ||
Liabilities: | ||
Derivative Instruments | 0 | 0 |
Fair Value Measured on a Recurring Basis | Level 3 | Foreign currency contracts | ||
Assets: | ||
Derivative Instruments | 0 | 7 |
Liabilities: | ||
Derivative Instruments | 0 | 0 |
Fair Value Measured on a Recurring Basis | Level 3 | Other derivatives | ||
Assets: | ||
Derivative Instruments | 0 | 0 |
Liabilities: | ||
Derivative Instruments | $ 0 | $ 0 |
Financial Instruments - Schedul
Financial Instruments - Schedule of Cash Equivalents and Available-for-Sale Investments (Details) - USD ($) $ in Millions | Apr. 30, 2019 | Oct. 31, 2018 |
Cash Equivalents: | ||
Cost | $ 2,512 | $ 3,996 |
Fair Value | 2,512 | 3,996 |
Available-for-Sale Investments: | ||
Debt Securities, Trading, and Equity Securities, FV-NI, Cost | 60 | 756 |
Debt Securities, Trading, and Equity Securities, FV-NI, Accumulated Gross Unrealized Gain, before Tax | 11 | 11 |
Debt Securities, Trading, and Equity Securities, FV-NI, Accumulated Gross Unrealized Loss, before Tax | 0 | (3) |
Debt Securities, Trading, and Equity Securities, FV-NI | 71 | 764 |
Total cash equivalents and available-for-sale investments, Cost | 2,572 | 4,752 |
Cash Equivalents and Available For Sale Securities, Accumulated Gross Unrealized Gain, before Tax | 11 | 11 |
Cash Equivalents and Available For Sale Securities, Accumulated Gross Unrealized Loss, before Tax | 0 | (3) |
Total cash equivalents and available-for-sale investments, Fair Value | 2,583 | 4,760 |
Corporate debt | ||
Cash Equivalents: | ||
Cost | 1,272 | 1,620 |
Fair Value | 1,272 | 1,620 |
Available-for-Sale Investments: | ||
Debt Securities, Available-for-sale, Amortized Cost | 12 | 368 |
Debt Securities, Available-for-sale, Accumulated Gross Unrealized Gain, before Tax | 0 | 0 |
Debt Securities, Available-for-sale, Accumulated Gross Unrealized Loss, before Tax | 0 | (2) |
Debt Securities, Available-for-sale | 12 | 366 |
Financial institution instruments | ||
Cash Equivalents: | ||
Cost | 0 | 9 |
Fair Value | 0 | 9 |
Available-for-Sale Investments: | ||
Debt Securities, Available-for-sale, Amortized Cost | 0 | 32 |
Debt Securities, Available-for-sale, Accumulated Gross Unrealized Gain, before Tax | 0 | 0 |
Debt Securities, Available-for-sale, Accumulated Gross Unrealized Loss, before Tax | 0 | 0 |
Debt Securities, Available-for-sale | 0 | 32 |
Government debt | ||
Cash Equivalents: | ||
Cost | 1,240 | 2,367 |
Fair Value | 1,240 | 2,367 |
Available-for-Sale Investments: | ||
Debt Securities, Available-for-sale, Amortized Cost | 5 | 314 |
Debt Securities, Available-for-sale, Accumulated Gross Unrealized Gain, before Tax | 0 | 0 |
Debt Securities, Available-for-sale, Accumulated Gross Unrealized Loss, before Tax | 0 | (1) |
Debt Securities, Available-for-sale | 5 | 313 |
Marketable equity securities | ||
Available-for-Sale Investments: | ||
Equity Securities, FV-NI, Cost | 4 | 4 |
Equity Securities, FV-NI, Accumulated Gross Unrealized Gain, before Tax | 2 | 2 |
Equity Securities, FV-NI, Accumulated Gross Unrealized Loss, before Tax | 0 | 0 |
Equity Securities, FV-NI | 6 | 6 |
Mutual funds | ||
Available-for-Sale Investments: | ||
Debt Securities, Available-for-sale, Amortized Cost | 39 | 38 |
Debt Securities, Available-for-sale, Accumulated Gross Unrealized Gain, before Tax | 9 | 9 |
Debt Securities, Available-for-sale, Accumulated Gross Unrealized Loss, before Tax | 0 | 0 |
Debt Securities, Available-for-sale | $ 48 | $ 47 |
Financial Instruments - Narrati
Financial Instruments - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Apr. 30, 2019 | Apr. 30, 2018 | Apr. 30, 2019 | Apr. 30, 2018 | Oct. 31, 2018 | |
Derivatives, Fair Value | |||||
Fair value of derivatives with credit contingent features in a net liability position | $ 56 | $ 56 | $ 68 | ||
Period to collateralize | 2 days | ||||
Loss expected to be reclassified from Accumulated OCI into earnings in next 12 months | $ 141 | ||||
Cash flow hedges | |||||
Derivatives, Fair Value | |||||
Foreign currency maturity | 12 months | ||||
Cash flow hedges | Minimum | |||||
Derivatives, Fair Value | |||||
Duration of the loan term (period) | 2 years | ||||
Cash flow hedges | Maximum | |||||
Derivatives, Fair Value | |||||
Duration of the loan term (period) | 5 years | ||||
Interest rate swap | |||||
Derivatives, Fair Value | |||||
Loss on interest rate swap agreements recognized in earnings | 4 | $ 29 | $ 16 | $ 11 | |
Other Non-Current Assets | Equity securities in privately held companies | |||||
Derivatives, Fair Value | |||||
Cost method and other equity investments | $ 49 | $ 49 | $ 36 |
Financial Instruments - Sched_2
Financial Instruments - Schedule of Contractual Maturities of Available for-sale Debt Securities (Details) $ in Millions | Apr. 30, 2019USD ($) |
Amortized Cost | |
Due in one year or less | $ 17 |
Fair Value | |
Due in one year or less | $ 17 |
Financial Instruments - Sched_3
Financial Instruments - Schedule of Gross Notional and Fair Value of Derivative Financial Instruments in the Consolidated Condensed Balance Sheets (Details) - USD ($) $ in Millions | Apr. 30, 2019 | Oct. 31, 2018 |
Derivatives, Fair Value | ||
Outstanding Gross Notional | $ 22,823 | $ 23,706 |
Gross Amount Recognized | 431 | 515 |
Derivative Liabilities | 154 | 195 |
Other Current Assets | ||
Derivatives, Fair Value | ||
Gross Amount Recognized | 302 | 408 |
Other Non-Current Assets | ||
Derivatives, Fair Value | ||
Gross Amount Recognized | 129 | 107 |
Other Accrued Liabilities | ||
Derivatives, Fair Value | ||
Derivative Liabilities | 104 | 120 |
Other Non-Current Liabilities | ||
Derivatives, Fair Value | ||
Derivative Liabilities | 50 | 75 |
Derivatives designated as hedging instruments | ||
Derivatives, Fair Value | ||
Outstanding Gross Notional | 16,932 | 18,147 |
Derivatives designated as hedging instruments | Other Current Assets | ||
Derivatives, Fair Value | ||
Gross Amount Recognized | 283 | 386 |
Derivatives designated as hedging instruments | Other Non-Current Assets | ||
Derivatives, Fair Value | ||
Gross Amount Recognized | 129 | 107 |
Derivatives designated as hedging instruments | Other Accrued Liabilities | ||
Derivatives, Fair Value | ||
Derivative Liabilities | 99 | 86 |
Derivatives designated as hedging instruments | Other Non-Current Liabilities | ||
Derivatives, Fair Value | ||
Derivative Liabilities | 50 | 75 |
Derivatives designated as hedging instruments | Fair value hedges | Interest rate contracts | ||
Derivatives, Fair Value | ||
Outstanding Gross Notional | 750 | 1,000 |
Derivatives designated as hedging instruments | Fair value hedges | Interest rate contracts | Other Current Assets | ||
Derivatives, Fair Value | ||
Gross Amount Recognized | 0 | 0 |
Derivatives designated as hedging instruments | Fair value hedges | Interest rate contracts | Other Non-Current Assets | ||
Derivatives, Fair Value | ||
Gross Amount Recognized | 0 | 0 |
Derivatives designated as hedging instruments | Fair value hedges | Interest rate contracts | Other Accrued Liabilities | ||
Derivatives, Fair Value | ||
Derivative Liabilities | 0 | 0 |
Derivatives designated as hedging instruments | Fair value hedges | Interest rate contracts | Other Non-Current Liabilities | ||
Derivatives, Fair Value | ||
Derivative Liabilities | 8 | 23 |
Derivatives designated as hedging instruments | Cash flow hedges | Foreign currency contracts | ||
Derivatives, Fair Value | ||
Outstanding Gross Notional | 16,182 | 17,147 |
Derivatives designated as hedging instruments | Cash flow hedges | Foreign currency contracts | Other Current Assets | ||
Derivatives, Fair Value | ||
Gross Amount Recognized | 283 | 386 |
Derivatives designated as hedging instruments | Cash flow hedges | Foreign currency contracts | Other Non-Current Assets | ||
Derivatives, Fair Value | ||
Gross Amount Recognized | 129 | 107 |
Derivatives designated as hedging instruments | Cash flow hedges | Foreign currency contracts | Other Accrued Liabilities | ||
Derivatives, Fair Value | ||
Derivative Liabilities | 99 | 86 |
Derivatives designated as hedging instruments | Cash flow hedges | Foreign currency contracts | Other Non-Current Liabilities | ||
Derivatives, Fair Value | ||
Derivative Liabilities | 42 | 52 |
Derivatives not designated as hedging instruments | ||
Derivatives, Fair Value | ||
Outstanding Gross Notional | 5,891 | 5,559 |
Derivatives not designated as hedging instruments | Other Current Assets | ||
Derivatives, Fair Value | ||
Gross Amount Recognized | 19 | 22 |
Derivatives not designated as hedging instruments | Other Non-Current Assets | ||
Derivatives, Fair Value | ||
Gross Amount Recognized | 0 | 0 |
Derivatives not designated as hedging instruments | Other Accrued Liabilities | ||
Derivatives, Fair Value | ||
Derivative Liabilities | 5 | 34 |
Derivatives not designated as hedging instruments | Other Non-Current Liabilities | ||
Derivatives, Fair Value | ||
Derivative Liabilities | 0 | 0 |
Derivatives not designated as hedging instruments | Foreign currency contracts | ||
Derivatives, Fair Value | ||
Outstanding Gross Notional | 5,764 | 5,437 |
Derivatives not designated as hedging instruments | Foreign currency contracts | Other Current Assets | ||
Derivatives, Fair Value | ||
Gross Amount Recognized | 17 | 22 |
Derivatives not designated as hedging instruments | Foreign currency contracts | Other Non-Current Assets | ||
Derivatives, Fair Value | ||
Gross Amount Recognized | 0 | 0 |
Derivatives not designated as hedging instruments | Foreign currency contracts | Other Accrued Liabilities | ||
Derivatives, Fair Value | ||
Derivative Liabilities | 5 | 26 |
Derivatives not designated as hedging instruments | Foreign currency contracts | Other Non-Current Liabilities | ||
Derivatives, Fair Value | ||
Derivative Liabilities | 0 | 0 |
Derivatives not designated as hedging instruments | Other derivatives | ||
Derivatives, Fair Value | ||
Outstanding Gross Notional | 127 | 122 |
Derivatives not designated as hedging instruments | Other derivatives | Other Current Assets | ||
Derivatives, Fair Value | ||
Gross Amount Recognized | 2 | 0 |
Derivatives not designated as hedging instruments | Other derivatives | Other Non-Current Assets | ||
Derivatives, Fair Value | ||
Gross Amount Recognized | 0 | 0 |
Derivatives not designated as hedging instruments | Other derivatives | Other Accrued Liabilities | ||
Derivatives, Fair Value | ||
Derivative Liabilities | 0 | 8 |
Derivatives not designated as hedging instruments | Other derivatives | Other Non-Current Liabilities | ||
Derivatives, Fair Value | ||
Derivative Liabilities | $ 0 | $ 0 |
Financial Instruments - Sched_4
Financial Instruments - Schedule of Information Related to the Potential Effect of Entity's Master Netting Agreements and Collateral Security Agreements (Details) - USD ($) $ in Millions | 6 Months Ended | |
Apr. 30, 2019 | Oct. 31, 2018 | |
Derivative assets | ||
Gross Amount Recognized | $ 431 | $ 515 |
Gross Amount Offset | 0 | 0 |
Net Amount Presented | 431 | 515 |
Gross Amounts Not Offset | ||
Derivatives | 97 | 112 |
Financial Collateral | 312 | 299 |
Net Amount | 22 | 104 |
Derivative liabilities | ||
Gross Amount Recognized | 154 | 195 |
Gross Amount Offset | 0 | 0 |
Net Amount Presented | 154 | 195 |
Gross Amounts Not Offset | ||
Derivatives | 97 | 112 |
Financial Collateral | 52 | 69 |
Net Amount | $ 5 | $ 14 |
Period to collateralize | 2 days |
Financial Instruments - Sched_5
Financial Instruments - Schedule of Pre-Tax Effect of Derivative Instruments in Cash Flow Hedging Relationships (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Apr. 30, 2019 | Apr. 30, 2018 | Apr. 30, 2019 | Apr. 30, 2018 | |
Pre-tax effect of derivative instruments in cash flow hedging relationships | ||||
Gain Recognized in Other Comprehensive Income (OCI) on Derivatives (Effective Portion) | $ 198 | $ 297 | $ 91 | $ (254) |
Foreign currency contracts | Cash flow hedges | ||||
Pre-tax effect of derivative instruments in cash flow hedging relationships | ||||
Gain Recognized in Other Comprehensive Income (OCI) on Derivatives (Effective Portion) | 198 | 91 | 297 | (254) |
(Loss) Gain Reclassified from Accumulated OCI Into Earnings (Effective Portion) | (6) | 173 | (276) | (346) |
Foreign currency contracts | Cash flow hedges | Net revenue | ||||
Pre-tax effect of derivative instruments in cash flow hedging relationships | ||||
(Loss) Gain Reclassified from Accumulated OCI Into Earnings (Effective Portion) | 0 | 191 | (277) | (329) |
Foreign currency contracts | Cash flow hedges | Cost of revenue | ||||
Pre-tax effect of derivative instruments in cash flow hedging relationships | ||||
(Loss) Gain Reclassified from Accumulated OCI Into Earnings (Effective Portion) | (6) | (16) | 0 | (18) |
Foreign currency contracts | Cash flow hedges | Operating expenses | ||||
Pre-tax effect of derivative instruments in cash flow hedging relationships | ||||
(Loss) Gain Reclassified from Accumulated OCI Into Earnings (Effective Portion) | $ 0 | $ (2) | $ 1 | $ 1 |
Financial Instruments - Sched_6
Financial Instruments - Schedule of Pre-Tax Effect of Derivative Instruments not Designated as Hedging Instruments on the Consolidated Condensed Statements of Earnings (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Apr. 30, 2019 | Apr. 30, 2018 | Apr. 30, 2019 | Apr. 30, 2018 | |
Derivative Instruments, Gain (Loss) | ||||
(Loss) Gain Recognized in Earnings on Derivatives | $ (13) | $ 6 | $ (39) | $ (9) |
Interest and other, net | Foreign currency contracts | ||||
Derivative Instruments, Gain (Loss) | ||||
(Loss) Gain Recognized in Earnings on Derivatives | (18) | 8 | (58) | (9) |
Interest and other, net | Other derivatives | ||||
Derivative Instruments, Gain (Loss) | ||||
(Loss) Gain Recognized in Earnings on Derivatives | $ 5 | $ (2) | $ 19 | $ 0 |
Borrowings - Schedule of Notes
Borrowings - Schedule of Notes Payable and Short-Term Borrowings (Details) - USD ($) $ in Millions | Apr. 30, 2019 | Oct. 31, 2018 |
Amount Outstanding | ||
Current portion of long-term debt | $ 252 | $ 565 |
Amount outstanding | $ 290 | $ 1,463 |
Weighted-Average Interest Rate | ||
Current portion of long-term debt | 3.70% | 3.10% |
Commercial paper | ||
Amount Outstanding | ||
Commercial paper | $ 0 | $ 854 |
Weighted-Average Interest Rate | ||
Notes payable to banks, lines of credit and other | 0.00% | 2.50% |
Notes payable to banks, lines of credit and other | ||
Amount Outstanding | ||
Amount outstanding | $ 38 | $ 44 |
Weighted-Average Interest Rate | ||
Notes payable to banks, lines of credit and other | 1.90% | 1.70% |
Borrowings - Schedule of Long-T
Borrowings - Schedule of Long-Term Debt (Details) - USD ($) | 1 Months Ended | |||||||
Jan. 31, 2014 | Apr. 30, 2019 | Oct. 31, 2018 | Mar. 31, 2012 | Dec. 31, 2011 | Sep. 30, 2011 | May 31, 2011 | Dec. 31, 2010 | |
Long-term debt | ||||||||
Fair value adjustment related to hedged debt | $ (11,000,000) | $ (28,000,000) | ||||||
Less: unamortized debt issuance cost | (16,000,000) | (17,000,000) | ||||||
Current portion of long-term debt | (252,000,000) | (565,000,000) | ||||||
Total long-term debt | 4,749,000,000 | 4,524,000,000 | ||||||
U.S. Dollar Global Notes | ||||||||
Long-term debt | ||||||||
Long-term debt | 4,246,000,000 | 4,647,000,000 | ||||||
2009 Shelf Registration Statement- $1,350 issued at discount to par at a price of 99.827% in December 2010 at 3.75%, due December 2020 | ||||||||
Long-term debt | ||||||||
Long-term debt | 648,000,000 | 648,000,000 | ||||||
Face amount of debt instrument | $ 1,350,000,000 | |||||||
Discount to par (percent) | 99.827% | |||||||
Interest rate (percent) | 3.75% | |||||||
2009 Shelf Registration Statement- $1,250 issued at discount to par at a price of 99.799% in May 2011 at 4.3%, due June 2021 | ||||||||
Long-term debt | ||||||||
Long-term debt | 667,000,000 | 667,000,000 | ||||||
Face amount of debt instrument | $ 1,250,000,000 | |||||||
Discount to par (percent) | 99.799% | |||||||
Interest rate (percent) | 4.30% | |||||||
2009 Shelf Registration Statement- $1,000 issued at discount to par at a price of 99.816% in September 2011 at 4.375%, due September 2021 | ||||||||
Long-term debt | ||||||||
Long-term debt | 538,000,000 | 538,000,000 | ||||||
Face amount of debt instrument | $ 1,000,000,000 | |||||||
Discount to par (percent) | 99.816% | |||||||
Interest rate (percent) | 4.375% | |||||||
2009 Shelf Registration Statement- $1,500 issued at discount to par at a price of 99.707% in December 2011 at 4.65%, due December 2021 | ||||||||
Long-term debt | ||||||||
Long-term debt | 695,000,000 | 694,000,000 | ||||||
Face amount of debt instrument | $ 1,500,000,000 | |||||||
Discount to par (percent) | 99.707% | |||||||
Interest rate (percent) | 4.65% | |||||||
2009 Shelf Registration Statement- $500 issued at discount to par at a price of 99.771% in March 2012 at 4.05%, due September 2022 | ||||||||
Long-term debt | ||||||||
Long-term debt | 499,000,000 | 499,000,000 | ||||||
Face amount of debt instrument | $ 500,000,000 | |||||||
Discount to par (percent) | 99.771% | |||||||
Interest rate (percent) | 4.05% | |||||||
2009 Shelf Registration Statement- $1,200 issued at discount to par at a price of 99.863% in September 2011 at 6.0%, due September 2041 | ||||||||
Long-term debt | ||||||||
Long-term debt | 1,199,000,000 | 1,199,000,000 | ||||||
Face amount of debt instrument | $ 1,200,000,000 | |||||||
Discount to par (percent) | 99.863% | |||||||
Interest rate (percent) | 6.00% | |||||||
2012 Shelf Registration Statement- $750 issued at par in January 2014 at three-month USD LIBOR plus 0.94%, due January 2019 | ||||||||
Long-term debt | ||||||||
Long-term debt | 0 | 102,000,000 | ||||||
Face amount of debt instrument | $ 750,000,000 | |||||||
Spread on reference interest rate (percent) | 0.94% | |||||||
2012 Shelf Registration Statement- $1,250 issued at discount to par at a price of 99.954% in January 2014 at 2.75%, due January 2019 | ||||||||
Long-term debt | ||||||||
Long-term debt | 0 | 300,000,000 | ||||||
Face amount of debt instrument | $ 1,250,000,000 | |||||||
Discount to par (percent) | 99.954% | |||||||
Interest rate (percent) | 2.75% | |||||||
Other, including capital lease obligations, at 0.51%-8.47%, due in calendar years 2019-2029 | ||||||||
Long-term debt | ||||||||
Other, including capital lease obligations, at 0.51%-8.47%, due in calendar years 2019-2029 | $ 782,000,000 | $ 487,000,000 | ||||||
Other, including capital lease obligations, at 0.51%-8.47%, due in calendar years 2019-2029 | Minimum | ||||||||
Long-term debt | ||||||||
Interest rate (percent) | 0.51% | |||||||
Other, including capital lease obligations, at 0.51%-8.47%, due in calendar years 2019-2029 | Maximum | ||||||||
Long-term debt | ||||||||
Interest rate (percent) | 8.47% |
Borrowings - Narrative (Details
Borrowings - Narrative (Details) | 6 Months Ended |
Apr. 30, 2019USD ($)commercial_paper_program | |
Line of Credit Facility [Line Items] | |
Number of commercial paper programs | commercial_paper_program | 2 |
Commercial paper | |
Line of Credit Facility [Line Items] | |
Maximum borrowing capacity under credit facility | $ 6,000,000,000 |
Revolving credit facility | |
Line of Credit Facility [Line Items] | |
Maximum borrowing capacity under credit facility | 4,000,000,000 |
Credit facilities | |
Line of Credit Facility [Line Items] | |
Available borrowing resources | $ 730,000,000 |
Stockholders' Deficit - Narrati
Stockholders' Deficit - Narrative (Details) - USD ($) shares in Millions, $ in Millions | Jun. 19, 2018 | Apr. 30, 2019 | Apr. 30, 2018 | Apr. 30, 2019 | Apr. 30, 2018 | Jan. 31, 2019 |
Stockholders' Equity Note [Abstract] | ||||||
Repurchases of common stock (shares) | 34 | 35 | 66 | 56 | ||
Payment in connection with repurchases of shares | $ 700 | $ 800 | $ 1,411 | $ 1,263 | ||
Share repurchase increase in authorization | $ 4,000 | |||||
Remaining shares authorized for repurchase (shares) | $ 2,500 |
Stockholders' Deficit - Schedul
Stockholders' Deficit - Schedule of Tax effects related to Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Apr. 30, 2019 | Apr. 30, 2018 | Apr. 30, 2019 | Apr. 30, 2018 | |
Components of accumulated other comprehensive income, net of taxes | ||||
Tax provision on other comprehensive income (loss) | $ (42) | $ (69) | $ (2) | $ (4) |
Tax effects on change in unrealized gains on available-for-sale securities | ||||
Components of accumulated other comprehensive income, net of taxes | ||||
Tax effects on change arising during the period | 0 | 0 | 0 | 1 |
Tax provision on other comprehensive income (loss) | 0 | 0 | 0 | 1 |
Net unrealized gains (losses) on cash flow hedges | ||||
Components of accumulated other comprehensive income, net of taxes | ||||
Tax effects on change arising during the period | (36) | (37) | (16) | 33 |
Tax effects on reclassification into earnings | (2) | (29) | 20 | (32) |
Tax provision on other comprehensive income (loss) | (38) | (66) | 4 | 1 |
Tax benefit on losses arising during the period | ||||
Components of accumulated other comprehensive income, net of taxes | ||||
Tax effects on change arising during the period | 1 | 0 | 1 | 0 |
Tax provision on amortization of actuarial loss and prior service benefit | ||||
Components of accumulated other comprehensive income, net of taxes | ||||
Tax effects on reclassification into earnings | (3) | (3) | (6) | (6) |
Tax benefit on settlements and other | ||||
Components of accumulated other comprehensive income, net of taxes | ||||
Tax effects on reclassification into earnings | 0 | 0 | 1 | 0 |
Tax effects on change in unrealized components of defined benefit plans | ||||
Components of accumulated other comprehensive income, net of taxes | ||||
Tax provision on other comprehensive income (loss) | (2) | (3) | (4) | (6) |
Change in cumulative translation adjustment | ||||
Components of accumulated other comprehensive income, net of taxes | ||||
Tax provision on other comprehensive income (loss) | $ (2) | $ 0 | $ (2) | $ 0 |
Stockholders' Deficit - Sched_2
Stockholders' Deficit - Schedule of Changes and reclassifications related to Other Comprehensive Income (Loss), net of taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Apr. 30, 2019 | Apr. 30, 2018 | Apr. 30, 2019 | Apr. 30, 2018 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Unrealized losses arising during the period | $ 67 | |||
Losses (gains) reclassified into earnings | (122) | |||
Other comprehensive income (loss), net of taxes | $ 187 | $ 515 | (55) | $ 104 |
Change in cumulative translation adjustment | 13 | 0 | 8 | 0 |
Change in unrealized gains (losses) on available-for-sale securities | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Unrealized losses arising during the period | 0 | (2) | 0 | (4) |
Losses (gains) reclassified into earnings | 3 | 0 | 3 | (5) |
Other comprehensive income (loss), net of taxes | 3 | (2) | 3 | (9) |
Net unrealized gains (losses) on cash flow hedges | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Unrealized losses arising during the period | 162 | 260 | 75 | (221) |
Losses (gains) reclassified into earnings | 4 | 247 | (153) | 314 |
Other comprehensive income (loss), net of taxes | 166 | 507 | (78) | 93 |
Losses arising during the period | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Unrealized losses arising during the period | (3) | 0 | (3) | 0 |
Tax provision on amortization of actuarial loss and prior service benefit | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Losses (gains) reclassified into earnings | 9 | 10 | 17 | 19 |
Settlements and other | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Losses (gains) reclassified into earnings | 1 | 0 | 0 | 1 |
Change in unrealized components of defined benefit plans | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Unrealized losses arising during the period | (3) | |||
Losses (gains) reclassified into earnings | 17 | |||
Other comprehensive income (loss), net of taxes | 7 | 10 | 14 | 20 |
Change in cumulative translation adjustment | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Unrealized losses arising during the period | (5) | |||
Losses (gains) reclassified into earnings | 11 | |||
Other comprehensive income (loss), net of taxes | $ 11 | $ 0 | ||
Change in cumulative translation adjustment | $ 6 | $ 0 |
Stockholders' Deficit - Sched_3
Stockholders' Deficit - Schedule of Accumulated Other Comprehensive Loss, Net of Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Apr. 30, 2019 | Apr. 30, 2018 | Apr. 30, 2019 | Apr. 30, 2018 | |
Components of accumulated other comprehensive income, net of taxes | ||||
Balance at beginning of period | $ (639) | |||
Other comprehensive income (loss) before reclassifications | 67 | |||
Reclassifications of losses (gains) into earnings | (122) | |||
Balance at end of period | $ (1,487) | (1,487) | ||
Accumulated other comprehensive loss | ||||
Components of accumulated other comprehensive income, net of taxes | ||||
Balance at beginning of period | (845) | |||
Balance at end of period | (900) | (900) | ||
Net unrealized gains on available-for-sale debt securities | ||||
Components of accumulated other comprehensive income, net of taxes | ||||
Balance at beginning of period | 5 | |||
Other comprehensive income (loss) before reclassifications | 0 | $ (2) | 0 | $ (4) |
Reclassifications of losses (gains) into earnings | 3 | 0 | 3 | (5) |
Balance at end of period | 8 | 8 | ||
Net unrealized gains (losses) on cash flow hedges | ||||
Components of accumulated other comprehensive income, net of taxes | ||||
Balance at beginning of period | 291 | |||
Other comprehensive income (loss) before reclassifications | 162 | 260 | 75 | (221) |
Reclassifications of losses (gains) into earnings | 4 | $ 247 | (153) | $ 314 |
Balance at end of period | 213 | 213 | ||
Unrealized components of defined benefit plans | ||||
Components of accumulated other comprehensive income, net of taxes | ||||
Balance at beginning of period | (1,141) | |||
Other comprehensive income (loss) before reclassifications | (3) | |||
Reclassifications of losses (gains) into earnings | 17 | |||
Balance at end of period | (1,127) | (1,127) | ||
Change in cumulative translation adjustment | ||||
Components of accumulated other comprehensive income, net of taxes | ||||
Balance at beginning of period | 0 | |||
Other comprehensive income (loss) before reclassifications | (5) | |||
Reclassifications of losses (gains) into earnings | 11 | |||
Balance at end of period | $ 6 | $ 6 |
Net Earnings Per Share (Details
Net Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Apr. 30, 2019 | Apr. 30, 2018 | Apr. 30, 2019 | Apr. 30, 2018 | |
Numerator: | ||||
Net earnings | $ 782 | $ 1,058 | $ 1,585 | $ 2,996 |
Denominator: | ||||
Weighted-average shares used to compute basic net EPS (shares) | 1,529 | 1,630 | 1,543 | 1,640 |
Dilutive effect of employee stock plans (shares) | 7 | 16 | 8 | 18 |
Weighted-average shares used to compute diluted net EPS (shares) | 1,536 | 1,646 | 1,551 | 1,658 |
Net earnings per share: | ||||
Basic (usd per share) | $ 0.51 | $ 0.65 | $ 1.03 | $ 1.83 |
Diluted (usd per share) | $ 0.51 | $ 0.64 | $ 1.02 | $ 1.81 |
Anti-dilutive weighted average stock-based compensation awards (shares) | 8 | 0 | 6 | 0 |
Litigation and Contingencies (D
Litigation and Contingencies (Details) $ in Millions | Oct. 05, 2018plaintiff | Sep. 18, 2018USD ($) | Nov. 30, 2017plaintiff | Jul. 24, 2017 | Jun. 30, 2016USD ($) | Oct. 01, 2015USD ($) | Apr. 17, 2015USD ($)employeesubsidiary | Jan. 24, 2013USD ($) | Dec. 11, 2012USD ($) | May 23, 2012 | Apr. 21, 2012USD ($) | May 10, 2010USD ($)employee | Apr. 30, 2019caseplaintiff | Oct. 31, 2018case | Apr. 20, 2012USD ($) | Apr. 11, 2012USD ($) |
Forsyth, et al. v. HP Inc. and Hewlett Packard Enterprise | ||||||||||||||||
Litigation and Contingencies | ||||||||||||||||
Minimum age of plaintiff | 40 years | |||||||||||||||
Number of named plaintiffs | plaintiff | 3 | |||||||||||||||
Number of opt-in plaintiffs | plaintiff | 12 | |||||||||||||||
Jackson, et al. v. HP Inc. and Hewlett Packard Enterprise | ||||||||||||||||
Litigation and Contingencies | ||||||||||||||||
Minimum age of plaintiff | 40 years | |||||||||||||||
India Directorate of Revenue Intelligence Proceedings | ||||||||||||||||
Litigation and Contingencies | ||||||||||||||||
Number of current employees | employee | 7 | |||||||||||||||
Number of former employee | employee | 1 | |||||||||||||||
Aggregate damages sought | $ 370 | |||||||||||||||
Loss contingency deposit to prevent interruption of business | $ 16 | |||||||||||||||
Duties and penalties under show cause notices | $ 17 | $ 386 | ||||||||||||||
Amount deposited under show cause notice prior to order | $ 7 | $ 9 | ||||||||||||||
Additional amount deposited against products-related show cause notice | $ 10 | |||||||||||||||
Additional amount deposited against parts-related show cause notice | $ 3 | |||||||||||||||
Additional amount deposited against product order | $ 24 | |||||||||||||||
Class Actions re Authentication of Supplies | ||||||||||||||||
Litigation and Contingencies | ||||||||||||||||
Purported consumer class actions filed | case | 5 | |||||||||||||||
Cases dismissed | case | 2 | |||||||||||||||
Settlement agreement amount | $ 1.5 | |||||||||||||||
Autonomy-Related Legal Matters | Autonomy | ||||||||||||||||
Litigation and Contingencies | ||||||||||||||||
Aggregate damages sought | $ 5,000 | |||||||||||||||
Number of subsidiaries | subsidiary | 4 | |||||||||||||||
Number of members | employee | 2 | |||||||||||||||
Autonomy-Related Legal Matters | Autonomy | Mr. Lynch | ||||||||||||||||
Litigation and Contingencies | ||||||||||||||||
Aggregate damages sought | $ 160 | |||||||||||||||
Resolved | Forsyth, et al. v. HP Inc. and Hewlett Packard Enterprise | ||||||||||||||||
Litigation and Contingencies | ||||||||||||||||
Number of plaintiffs | plaintiff | 16 | 193 | ||||||||||||||
Number of additional plaintiffs | plaintiff | 154 | |||||||||||||||
Number of additional plaintiffs signed separation agreements | plaintiff | 143 | |||||||||||||||
Oracle Corporation v. HP | ||||||||||||||||
Litigation and Contingencies | ||||||||||||||||
Damages awarded | $ 3,000 | |||||||||||||||
Oracle Corporation v. HP | Past lost profits | ||||||||||||||||
Litigation and Contingencies | ||||||||||||||||
Damages awarded | 1,700 | |||||||||||||||
Oracle Corporation v. HP | Future lost profits | ||||||||||||||||
Litigation and Contingencies | ||||||||||||||||
Damages awarded | $ 1,300 |
Guarantees, Indemnifications,_3
Guarantees, Indemnifications, and Warranties (Details) - USD ($) $ in Millions | 6 Months Ended | |
Apr. 30, 2019 | Oct. 31, 2018 | |
Guarantees [Abstract] | ||
Tax indemnifications receivable | $ 900 | $ 1,000 |
Changes in aggregated product warranty liabilities | ||
Balance at beginning of period | 915 | |
Accruals for warranties issued | 519 | |
Adjustments related to pre-existing warranties (including changes in estimates) | (1) | |
Settlements made (in cash or in kind) | (524) | |
Balance at end of period | $ 909 |
Acquisitions (Details)
Acquisitions (Details) - USD ($) $ in Millions | Nov. 01, 2018 | Apr. 30, 2019 | Oct. 31, 2018 |
Business Combinations [Abstract] | |||
Goodwill | $ 375 | $ 6,349 | $ 5,968 |
Amortizable intangible assets | 300 | ||
Net liabilities assumed | (186) | ||
Total fair value of consideration | $ 489 |
Intangible Assets - Schedule of
Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) $ in Millions | 6 Months Ended | |
Apr. 30, 2019 | Oct. 31, 2018 | |
Finite-Lived Intangible Assets [Line Items] | ||
Gross | $ 1,019 | $ 713 |
Accumulated Amortization | 318 | 260 |
Total | 701 | 453 |
Customer contracts, customer lists and distribution agreements | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross | 391 | 112 |
Accumulated Amortization | 105 | 88 |
Total | $ 286 | 24 |
Weighted-Average Useful Life | 9 years | |
Developed and core technology and patents | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross | $ 628 | 601 |
Accumulated Amortization | 213 | 172 |
Total | $ 415 | $ 429 |
Weighted-Average Useful Life | 7 years |
Intangible Assets - Schedule _2
Intangible Assets - Schedule of Estimated Future Amortization Expense (Details) - USD ($) $ in Millions | Apr. 30, 2019 | Oct. 31, 2018 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Remainder of 2019 | $ 57 | |
2020 | 115 | |
2021 | 114 | |
2022 | 114 | |
2023 | 113 | |
Thereafter | 188 | |
Total | $ 701 | $ 453 |
Uncategorized Items - hpq-20190
Label | Element | Value |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (563,000,000) |
Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (563,000,000) |