Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Jan. 31, 2014 | Feb. 28, 2014 | |
Document and Entity Information | ' | ' |
Entity Registrant Name | 'HEWLETT PACKARD CO | ' |
Entity Central Index Key | '0000047217 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 31-Jan-14 | ' |
Amendment Flag | 'false | ' |
Current Fiscal Year End Date | '--10-31 | ' |
Entity Current Reporting Status | 'Yes | ' |
Entity Filer Category | 'Large Accelerated Filer | ' |
Entity Common Stock, Shares Outstanding | ' | 1,895,120,816 |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q1 | ' |
Consolidated_Condensed_Stateme
Consolidated Condensed Statements of Earnings (USD $) | 3 Months Ended | |
In Millions, except Per Share data, unless otherwise specified | Jan. 31, 2014 | Jan. 31, 2013 |
Net revenue: | ' | ' |
Products | $18,770 | $18,270 |
Services | 9,281 | 9,971 |
Financing income | 103 | 118 |
Total net revenue | 28,154 | 28,359 |
Costs and expenses: | ' | ' |
Cost of products | 14,525 | 14,031 |
Cost of services | 7,139 | 7,918 |
Financing interest | 72 | 80 |
Research and development | 811 | 794 |
Selling, general and administrative | 3,210 | 3,300 |
Amortization of intangible assets | 283 | 350 |
Restructuring charges | 114 | 130 |
Acquisition-related charges | 3 | 4 |
Total operating expenses | 26,157 | 26,607 |
Earnings from operations | 1,997 | 1,752 |
Interest and other, net | -163 | -179 |
Earnings before taxes | 1,834 | 1,573 |
Provision for taxes | -409 | -341 |
Net earnings | $1,425 | $1,232 |
Net earnings per share: | ' | ' |
Basic (in dollars per share) | $0.75 | $0.63 |
Diluted (in dollars per share) | $0.74 | $0.63 |
Cash dividends declared per share (in dollars per share) | $0.29 | $0.26 |
Weighted-average shares used to compute net earnings per share: | ' | ' |
Basic (in shares) | 1,907 | 1,953 |
Diluted (in shares) | 1,935 | 1,956 |
Consolidated_Condensed_Stateme1
Consolidated Condensed Statements of Comprehensive Income (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Jan. 31, 2014 | Jan. 31, 2013 |
Consolidated Condensed Statements of Comprehensive Income | ' | ' |
Net earnings | $1,425 | $1,232 |
Change in unrealized (losses) gains on available-for-sale securities: | ' | ' |
Unrealized (losses) gains arising during the period | -1 | 3 |
(Gains) losses reclassified into earnings | -1 | ' |
Change in unrealized (losses) gains on available-for-sale securities | -2 | 3 |
Change in unrealized gains (losses) on cash flow hedges: | ' | ' |
Unrealized gains (losses) arising during the period | 70 | -314 |
Losses (gains) reclassified into earnings | 109 | 64 |
Change in unrealized gains (losses) on cash flow hedges | 179 | -250 |
Change in unrealized components of defined benefit plans: | ' | ' |
Amortization of actuarial loss and prior service benefit | 63 | 83 |
Curtailments, settlements and other | ' | 13 |
Change in unrealized components of defined benefit plans | 63 | 96 |
Change in cumulative translation adjustment | -24 | -26 |
Other comprehensive income (loss) before taxes | 216 | -177 |
(Provision) benefit for taxes | -105 | 64 |
Other comprehensive income (loss), net of tax | 111 | -113 |
Comprehensive income | $1,536 | $1,119 |
Consolidated_Condensed_Balance
Consolidated Condensed Balance Sheets (USD $) | Jan. 31, 2014 | Oct. 31, 2013 |
In Millions, unless otherwise specified | ||
Current assets: | ' | ' |
Cash and cash equivalents | $16,165 | $12,163 |
Accounts receivable | 13,492 | 15,876 |
Financing receivables | 3,054 | 3,144 |
Inventory | 6,004 | 6,046 |
Other current assets | 11,969 | 13,135 |
Total current assets | 50,684 | 50,364 |
Property, plant and equipment | 11,259 | 11,463 |
Long-term financing receivables and other assets | 9,131 | 9,556 |
Goodwill | 31,131 | 31,124 |
Intangible assets | 2,820 | 3,169 |
Total assets | 105,025 | 105,676 |
Current liabilities: | ' | ' |
Notes payable and short-term borrowings | 6,621 | 5,979 |
Accounts payable | 12,640 | 14,019 |
Employee compensation and benefits | 3,171 | 4,436 |
Taxes on earnings | 1,224 | 1,203 |
Deferred revenue | 6,754 | 6,477 |
Accrued restructuring | 630 | 901 |
Other accrued liabilities | 12,571 | 12,506 |
Total current liabilities | 43,611 | 45,521 |
Long-term debt | 17,971 | 16,608 |
Other liabilities | 15,294 | 15,891 |
Commitments and contingencies | ' | ' |
HP stockholders' equity | ' | ' |
Preferred stock, $0.01 par value (300 shares authorized; none issued) | ' | ' |
Common stock, $0.01 par value (9,600 shares authorized; 1,899 and 1,908 shares issued and outstanding, respectively) | 19 | 19 |
Additional paid-in capital | 4,966 | 5,465 |
Retained earnings | 26,436 | 25,563 |
Accumulated other comprehensive loss | -3,667 | -3,778 |
Total HP stockholders' equity | 27,754 | 27,269 |
Non-controlling interests | 395 | 387 |
Total stockholders' equity | 28,149 | 27,656 |
Total liabilities and stockholders' equity | $105,025 | $105,676 |
Consolidated_Condensed_Balance1
Consolidated Condensed Balance Sheets (Parenthetical) (USD $) | Jan. 31, 2014 | Oct. 31, 2013 |
In Millions, except Per Share data, unless otherwise specified | ||
Consolidated Condensed Balance Sheets | ' | ' |
Preferred stock, par value (in dollars per share) | $0.01 | $0.01 |
Preferred stock, shares authorized | 300 | 300 |
Preferred stock, shares issued | 0 | 0 |
Common stock, par value (in dollars per share) | $0.01 | $0.01 |
Common stock, shares authorized | 9,600 | 9,600 |
Common stock, shares issued | 1,899 | 1,908 |
Common stock, shares outstanding | 1,899 | 1,908 |
Consolidated_Condensed_Stateme2
Consolidated Condensed Statements of Cash Flows (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Jan. 31, 2014 | Jan. 31, 2013 |
Cash flows from operating activities: | ' | ' |
Net earnings | $1,425 | $1,232 |
Adjustments to reconcile net earnings to net cash provided by operating activities: | ' | ' |
Depreciation and amortization | 1,117 | 1,163 |
Stock-based compensation expense | 170 | 184 |
Provision for doubtful accounts | -4 | 32 |
Provision for inventory | 61 | 92 |
Restructuring charges | 114 | 130 |
Deferred taxes on earnings | 9 | 500 |
Excess tax benefit from stock-based compensation | -27 | ' |
Other, net | -33 | 167 |
Changes in operating assets and liabilities | ' | ' |
Accounts receivable | 2,391 | 2,148 |
Financing receivables | 296 | 98 |
Inventory | -19 | -149 |
Accounts payable | -1,165 | -1,690 |
Taxes on earnings | 170 | -423 |
Restructuring | -381 | -237 |
Other assets and liabilities | -1,134 | -685 |
Net cash provided by operating activities | 2,990 | 2,562 |
Cash flows from investing activities: | ' | ' |
Investment in property, plant and equipment | -997 | -633 |
Proceeds from sale of property, plant and equipment | 450 | 127 |
Purchases of available-for-sale securities and other investments | -135 | -299 |
Maturities and sales of available-for-sale securities and other investments | 465 | 161 |
Net cash used in investing activities | -217 | -644 |
Cash flows from financing activities: | ' | ' |
Issuance (repayment) of commercial paper and notes payable, net | 2 | -105 |
Issuance of debt | 2,005 | 45 |
Payment of debt | -45 | -114 |
Issuance of common stock under employee stock plans | 83 | 55 |
Repurchase of common stock | -565 | -253 |
Excess tax benefit from stock-based compensation | 27 | ' |
Cash dividends paid | -278 | -258 |
Net cash provided by (used in) financing activities | 1,229 | -630 |
Increase in cash and cash equivalents | 4,002 | 1,288 |
Cash and cash equivalents at beginning of period | 12,163 | 11,301 |
Cash and cash equivalents at end of period | 16,165 | 12,589 |
Supplemental schedule of non-cash investing and financing activities: | ' | ' |
Purchase of assets under capital leases | $95 | $2 |
Basis_of_Presentation
Basis of Presentation | 3 Months Ended |
Jan. 31, 2014 | |
Basis of Presentation | ' |
Basis of Presentation | ' |
Note 1: Basis of Presentation | |
In the opinion of management, the accompanying unaudited Consolidated Condensed Financial Statements of Hewlett-Packard Company and its consolidated subsidiaries ("HP") contain all adjustments, including normal recurring adjustments, necessary to present fairly HP's financial position as of January 31, 2014 and October 31, 2013 and its results of operations and cash flows for the three months ended January 31, 2014 and January 31, 2013. | |
The results of operations and cash flows for the three months ended January 31, 2014 are not necessarily indicative of the results to be expected for the full year. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with HP's Annual Report on Form 10-K for the fiscal year ended October 31, 2013, including "Management's Discussion and Analysis of Financial Condition and Results of Operations," "Quantitative and Qualitative Disclosures About Market Risk" and the Consolidated Financial Statements and notes thereto included in Items 7, 7A and 8, respectively, included therein. | |
The accompanying unaudited Consolidated Condensed Financial Statements include the accounts of HP and other subsidiaries and affiliates in which HP has a controlling financial interest. Non-controlling interests are presented as a separate component within Total stockholder's equity in the Consolidated Condensed Balance Sheets. Net earnings attributable to the non-controlling interests are eliminated within Interest and other, net in the Consolidated Condensed Statements of Earnings and are not presented separately as they were not material for any period presented. HP has eliminated all significant intercompany accounts and transactions. | |
Use of Estimates | |
The preparation of financial statements in accordance with U.S. generally accepted accounting principles ("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. | |
Segment Reorganization | |
HP has implemented certain segment and business unit realignments in order to align its segment financial reporting more closely with its current business structure. Prior year segment and business unit financial information have been made to conform to the current-year presentation. None of the changes impacts HP's previously reported consolidated net revenue, earnings from operations, net earnings or net earnings per share. See Note 16 for a further discussion of HP's segment reorganization. | |
Accounting Pronouncements | |
In July 2013, the Financial Accounting Standards Board ("FASB") issued a new accounting standard requiring the presentation of certain unrecognized tax benefits as reductions to deferred tax assets rather than as liabilities in the Consolidated Condensed Balance Sheets when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. HP will be required to adopt this new standard on a prospective basis in the first quarter of fiscal 2015; however, early adoption is permitted as is retrospective application. HP is currently evaluating the timing, transition method and impact of this new standard on its Consolidated Condensed Financial Statements. | |
StockBased_Compensation
Stock-Based Compensation | 3 Months Ended | |||||||||||||
Jan. 31, 2014 | ||||||||||||||
Stock-Based Compensation | ' | |||||||||||||
Stock-Based Compensation | ' | |||||||||||||
Note 2: Stock-Based Compensation | ||||||||||||||
HP's stock-based compensation plans include HP's principal equity plans as well as various equity plans assumed through business combinations. HP's principal equity plans permit the issuance of restricted stock awards, stock options and performance-based awards. | ||||||||||||||
Stock-based compensation expense and the resulting tax benefits were as follows: | ||||||||||||||
Three months | Three months | |||||||||||||
ended | ended | |||||||||||||
January 31, | January 31, | |||||||||||||
2014 | 2013 | |||||||||||||
In millions | ||||||||||||||
Stock-based compensation expense | $ | 170 | $ | 184 | ||||||||||
Income tax benefit | (53 | ) | (57 | ) | ||||||||||
| | | | | | | | |||||||
Stock-based compensation expense, net of tax | $ | 117 | $ | 127 | ||||||||||
| | | | | | | | |||||||
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Restricted Stock Awards | ||||||||||||||
Restricted stock awards are non-vested stock awards that include grants of restricted stock and grants of restricted stock units. For the three months ended January 31, 2014, HP granted only restricted stock units. | ||||||||||||||
Non-vested restricted stock awards as of January 31, 2014, and changes during the three months ended January 31, 2014 were as follows: | ||||||||||||||
Three months ended | ||||||||||||||
January 31, 2014 | ||||||||||||||
Shares | Weighted- | |||||||||||||
Average | ||||||||||||||
Grant Date | ||||||||||||||
Fair Value | ||||||||||||||
Per Share | ||||||||||||||
In thousands | ||||||||||||||
Outstanding at beginning of period | 32,262 | $ | 21 | |||||||||||
Granted | 21,013 | $ | 27 | |||||||||||
Vested | (11,918 | ) | $ | 24 | ||||||||||
Forfeited | (557 | ) | $ | 21 | ||||||||||
| | | | | | | | |||||||
Outstanding at end of period | 40,800 | $ | 23 | |||||||||||
| | | | | | | | |||||||
| | | | | | | | |||||||
At January 31, 2014, there was $692 million of unrecognized pre-tax stock-based compensation expense related to non-vested restricted stock awards, which HP expects to recognize over the remaining weighted-average vesting period of 1.6 years. | ||||||||||||||
Stock Options | ||||||||||||||
HP utilizes the Black-Scholes-Merton option pricing formula to estimate the fair value of stock options subject to service-based vesting conditions that are granted under its principal equity plans. HP estimates the fair value of stock options subject to performance-contingent vesting conditions using a combination of a Monte Carlo simulation model and a lattice model, as these awards contain market conditions. The weighted-average fair value and the assumptions used to measure fair value were as follows: | ||||||||||||||
Three months | ||||||||||||||
ended | ||||||||||||||
January 31 | ||||||||||||||
2014 | 2013 | |||||||||||||
Weighted-average fair value of grants per option(1) | $ | 7.45 | $ | 4.01 | ||||||||||
Expected volatility(2) | 34 | % | 42 | % | ||||||||||
Risk-free interest rate(3) | 1.79 | % | 0.98 | % | ||||||||||
Expected dividend yield(4) | 2.15 | % | 3.77 | % | ||||||||||
Expected term in months(5) | 69 | 70 | ||||||||||||
-1 | ||||||||||||||
The fair value calculation was based on stock options granted during the period. | ||||||||||||||
-2 | ||||||||||||||
For the three months ended January 31, 2014, expected volatility for stock options subject to service-based vesting was determined using implied volatility from traded options on HP's stock whereas for performance-contingent stock options, expected volatility was determined using historical volatility. For the three months ended January 31, 2013, expected volatility for stock options subject to service-based vesting and performance-contingent stock options was determined using implied volatility from traded options on HP's stock. | ||||||||||||||
-3 | ||||||||||||||
The risk-free interest rate was determined using the yield on U.S. Treasury zero-coupon issues. | ||||||||||||||
-4 | ||||||||||||||
The expected dividend yield was determined using a constant dividend yield during the expected term of the option. | ||||||||||||||
-5 | ||||||||||||||
For stock options subject to service-based vesting, expected term was determined using historical exercise and post-vesting termination patterns; and for performance-contingent stock options, expected term represents an output from the lattice model. | ||||||||||||||
Option activity as of January 31, 2014, and changes during the three months ended January 31, 2014 were as follows: | ||||||||||||||
Three months ended January 31, 2014 | ||||||||||||||
Shares | Weighted- | Weighted- | Aggregate | |||||||||||
Average | Average | Intrinsic | ||||||||||||
Exercise | Remaining | Value | ||||||||||||
Price | Contractual | |||||||||||||
Term | ||||||||||||||
In thousands | In years | In millions | ||||||||||||
Outstanding at beginning of period | 84,042 | $ | 27 | |||||||||||
Granted | 8,600 | $ | 27 | |||||||||||
Exercised | (2,240 | ) | $ | 17 | ||||||||||
Forfeited/cancelled/expired | (18,362 | ) | $ | 32 | ||||||||||
| | | | | | | | | | | | | | |
Outstanding at end of period | 72,040 | $ | 26 | 5 | $ | 481 | ||||||||
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Vested and expected to vest at end of period | 66,593 | $ | 26 | 4.8 | $ | 432 | ||||||||
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| | | | | | | | | | | | | | |
Exercisable at end of period | 34,307 | $ | 33 | 2.9 | $ | 138 | ||||||||
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The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value that option holders would have received had all option holders exercised their options on January 31, 2014. The aggregate intrinsic value is the difference between HP's closing stock price on the last trading day of the first quarter of fiscal 2014 and the exercise price, multiplied by the number of in-the-money options. Total intrinsic value of options exercised for the three months ended January 31, 2014 was $24 million. | ||||||||||||||
At January 31, 2014, there was $135 million of unrecognized pre-tax, stock-based compensation expense related to stock options, which HP expects to recognize over the remaining weighted-average vesting period of 2.2 years. | ||||||||||||||
Net_Earnings_Per_Share
Net Earnings Per Share | 3 Months Ended | |||||||
Jan. 31, 2014 | ||||||||
Net Earnings Per Share | ' | |||||||
Net Earnings Per Share | ' | |||||||
Note 3: Net Earnings Per Share | ||||||||
HP calculates basic net earnings per share ("EPS") using net earnings and the weighted-average number of shares outstanding during the reporting period. Diluted net EPS includes any dilutive effect of restricted stock, stock options and performance-based restricted units. | ||||||||
The reconciliations of the numerators and denominators of each of the basic and diluted net EPS calculations were as follows: | ||||||||
Three months | ||||||||
ended January 31 | ||||||||
2014 | 2013 | |||||||
In millions, except | ||||||||
per share amounts | ||||||||
Numerator: | ||||||||
Net earnings(1) | $ | 1,425 | $ | 1,232 | ||||
| | | | | | | | |
| | | | | | | | |
Denominator: | ||||||||
Weighted-average shares used to compute basic net EPS | 1,907 | 1,953 | ||||||
Dilutive effect of employee stock plans | 28 | 3 | ||||||
| | | | | | | | |
Weighted-average shares used to compute diluted net EPS | 1,935 | 1,956 | ||||||
| | | | | | | | |
| | | | | | | | |
Net earnings per share: | ||||||||
Basic | $ | 0.75 | $ | 0.63 | ||||
Diluted | $ | 0.74 | $ | 0.63 | ||||
-1 | ||||||||
Net earnings available to participating securities were not significant for the three months ended January 31, 2014 and 2013. HP considers restricted stock that provides the holder with a non-forfeitable right to receive dividends to be a participating security. | ||||||||
HP excludes options with exercise prices that are greater than the average market price from the calculation of diluted net EPS because their effect would be anti-dilutive. In the three months ended January 31, 2014 and 2013, HP excluded from the calculation of diluted net EPS options to purchase 30 million shares and 74 million shares, respectively. In addition, HP also excluded from the calculation of diluted net EPS options to purchase an additional 7 million shares and 12 million shares, respectively, as their combined exercise price, unamortized fair value and excess tax benefits were greater in each of those periods than the average market price for HP's stock. | ||||||||
Balance_Sheet_Details
Balance Sheet Details | 3 Months Ended | |||||||
Jan. 31, 2014 | ||||||||
Balance Sheet Details | ' | |||||||
Balance Sheet Details | ' | |||||||
Note 4: Balance Sheet Details | ||||||||
Balance sheet details were as follows: | ||||||||
Accounts Receivable, Net | ||||||||
January 31, | October 31, | |||||||
2014 | 2013 | |||||||
In millions | ||||||||
Accounts receivable | $ | 13,760 | $ | 16,208 | ||||
Allowance for doubtful accounts | (268 | ) | (332 | ) | ||||
| | | | | | | | |
$ | 13,492 | $ | 15,876 | |||||
| | | | | | | | |
| | | | | | | | |
Three months ended | ||||||||
January 31, 2014 | ||||||||
In millions | ||||||||
Allowance for doubtful accounts—accounts receivable: | ||||||||
Balance at beginning of period | $ | 332 | ||||||
Provision for doubtful accounts | (11 | ) | ||||||
Deductions, net of recoveries | (53 | ) | ||||||
| | | | | ||||
Balance at end of period | $ | 268 | ||||||
| | | | | ||||
| | | | | ||||
HP has third-party financing arrangements consisting of revolving short-term financing intended to facilitate the working capital requirements of certain customers. These financing arrangements, which in one case provides for partial recourse, result in a transfer of HP's trade receivables and risk to the third party. As these transfers qualify for sales accounting treatment, the trade receivables are derecognized from the Consolidated Condensed Balance Sheets upon transfer, and HP receives a payment for the trade receivables from the third party within a mutually agreed upon time period. For the arrangement involving an element of recourse, the recourse obligation is measured using market data from similar transactions and reported as a current liability in the Consolidated Condensed Balance Sheets. The recourse obligations as of January 31, 2014 and October 31, 2013 were not material. | ||||||||
For both periods ended January 31, 2014 and 2013, $1.5 billion of trade receivables were sold under these facilities, which approximates the amount of cash received. The resulting costs associated with the sales of trade accounts receivable for both periods were not material. The maximum program capacity and available program capacity under these arrangements were as follows: | ||||||||
January 31, | October 31, | |||||||
2014 | 2013 | |||||||
In millions | ||||||||
Non-recourse arrangements: | ||||||||
Aggregate maximum program capacity | $ | 759 | $ | 764 | ||||
Aggregate available capacity | $ | 451 | $ | 450 | ||||
Aggregate utilized capacity | $ | 308 | $ | 314 | ||||
Partial-recourse arrangement: | ||||||||
Maximum program capacity | $ | 637 | $ | 631 | ||||
Available capacity | $ | 172 | $ | 177 | ||||
Utilized capacity | $ | 465 | $ | 454 | ||||
Total arrangements: | ||||||||
Aggregate maximum program capacity | $ | 1,396 | $ | 1,395 | ||||
Aggregate available capacity | $ | 623 | $ | 627 | ||||
Aggregate utilized capacity | $ | 773 | $ | 768 | ||||
Inventory | ||||||||
January 31, | October 31, | |||||||
2014 | 2013 | |||||||
In millions | ||||||||
Finished goods | $ | 3,757 | $ | 3,847 | ||||
Purchased parts and fabricated assemblies | 2,247 | 2,199 | ||||||
| | | | | | | | |
$ | 6,004 | $ | 6,046 | |||||
| | | | | | | | |
| | | | | | | | |
Property, Plant and Equipment | ||||||||
January 31, | October 31, | |||||||
2014 | 2013 | |||||||
In millions | ||||||||
Land | $ | 553 | $ | 626 | ||||
Buildings and leasehold improvements | 8,876 | 8,942 | ||||||
Machinery and equipment, including equipment held for lease | 16,737 | 16,565 | ||||||
| | | | | | | | |
26,166 | 26,133 | |||||||
| | | | | | | | |
Accumulated depreciation | (14,907 | ) | (14,670 | ) | ||||
| | | | | | | | |
$ | 11,259 | $ | 11,463 | |||||
| | | | | | | | |
| | | | | | | | |
For the three months ended January 31, 2014, the change in gross property, plant and equipment was due primarily to investments of $878 million, which were partially offset by sales and retirements totaling $766 million. Accumulated depreciation associated with assets sold or retired was $560 million. | ||||||||
Goodwill_and_Intangible_Assets
Goodwill and Intangible Assets | 3 Months Ended | |||||||||||||||||||||||||
Jan. 31, 2014 | ||||||||||||||||||||||||||
Goodwill and Intangible Assets | ' | |||||||||||||||||||||||||
Goodwill and Intangible Assets | ' | |||||||||||||||||||||||||
Note 5: Goodwill and Intangible Assets | ||||||||||||||||||||||||||
Goodwill | ||||||||||||||||||||||||||
Goodwill allocated to HP's reportable segments as of January 31, 2014 and changes in the carrying amount of goodwill during the three months ended January 31, 2014 are as follows: | ||||||||||||||||||||||||||
Personal | Printing | Enterprise | Enterprise | Software | HP | Corporate | Total | |||||||||||||||||||
Systems | Group | Services(2) | Financial | Investments | ||||||||||||||||||||||
Services | ||||||||||||||||||||||||||
In millions | ||||||||||||||||||||||||||
Balance at beginning of period(1) | $ | 2,588 | $ | 2,591 | $ | 16,864 | $ | 97 | $ | 8,840 | $ | 144 | $ | — | $ | 31,124 | ||||||||||
Goodwill adjustments | — | — | 8 | (1 | ) | — | — | — | 7 | |||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Balance at end of period(1) | $ | 2,588 | $ | 2,591 | $ | 16,872 | $ | 96 | $ | 8,840 | $ | 144 | $ | — | $ | 31,131 | ||||||||||
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-1 | ||||||||||||||||||||||||||
Goodwill at January 31, 2014 and October 31, 2013 is net of accumulated impairment losses of $14,518 million. Of that amount, $7,961 million relates to the Enterprise Services ("ES") segment, $5,744 million relates to Software, and the remaining $813 million relates to Corporate Investments. | ||||||||||||||||||||||||||
-2 | ||||||||||||||||||||||||||
Goodwill at January 31, 2014 and October 31, 2013 relates to the MphasiS Limited reporting unit. | ||||||||||||||||||||||||||
Effective at the beginning of its first quarter of fiscal 2014, HP implemented certain organizational changes to align its segment financial reporting more closely with its current business structure. As a result of the organizational realignments, which are described in detail in Note 16, goodwill has been reclassified to the respective segments as of the beginning of the period using a relative fair value approach. | ||||||||||||||||||||||||||
Goodwill is tested for impairment at the reporting unit level. At the beginning of its first quarter of fiscal 2014, HP made a change to its reporting units. In connection with continued operational synergies and interdependencies between the Enterprise Servers, Storage and Networking reporting unit and the Technology Services ("TS") reporting unit within the Enterprise Group ("EG") segment, HP combined these reporting units to create the EG reporting unit. As of January 31, 2014 our reporting units are consistent with the reportable segments identified in Note 16, except for ES, which includes two reporting units: MphasiS Limited; and the remainder of ES. | ||||||||||||||||||||||||||
HP will continue to evaluate the recoverability of goodwill on an annual basis as of the beginning of its fourth fiscal quarter and whenever events or changes in circumstances indicate there may be a potential impairment. | ||||||||||||||||||||||||||
Intangible Assets | ||||||||||||||||||||||||||
HP's intangible assets associated with completed acquisitions are composed of: | ||||||||||||||||||||||||||
January 31, 2014 | October 31, 2013 | |||||||||||||||||||||||||
Gross | Accumulated | Accumulated | Net | Gross | Accumulated | Accumulated | Net | |||||||||||||||||||
Amortization | Impairment | Amortization | Impairment | |||||||||||||||||||||||
Loss | Loss | |||||||||||||||||||||||||
In millions | ||||||||||||||||||||||||||
Customer contracts, customer lists and distribution agreements | $ | 5,321 | $ | (2,847 | ) | $ | (856 | ) | $ | 1,618 | $ | 5,321 | $ | (2,709 | ) | $ | (856 | ) | $ | 1,756 | ||||||
Developed and core technology and patents | 5,265 | (2,089 | ) | (2,138 | ) | 1,038 | 5,331 | (1,966 | ) | (2,138 | ) | 1,227 | ||||||||||||||
Trade name and trade marks | 1,730 | (233 | ) | (1,336 | ) | 161 | 1,730 | (211 | ) | (1,336 | ) | 183 | ||||||||||||||
In-process research and development | 3 | — | — | 3 | 3 | — | — | 3 | ||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Total intangible assets | $ | 12,319 | $ | (5,169 | ) | $ | (4,330 | ) | $ | 2,820 | $ | 12,385 | $ | (4,886 | ) | $ | (4,330 | ) | $ | 3,169 | ||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
For the first three months of fiscal 2014, the majority of the decrease in gross intangible assets was related to the sale of a portfolio of intellectual property. | ||||||||||||||||||||||||||
Estimated future amortization expense related to finite-lived intangible assets at January 31, 2014 is as follows: | ||||||||||||||||||||||||||
Fiscal year: | In millions | |||||||||||||||||||||||||
2014 (remaining 9 months) | $ | 715 | ||||||||||||||||||||||||
2015 | 864 | |||||||||||||||||||||||||
2016 | 645 | |||||||||||||||||||||||||
2017 | 237 | |||||||||||||||||||||||||
2018 | 145 | |||||||||||||||||||||||||
2019 | 110 | |||||||||||||||||||||||||
Thereafter | 101 | |||||||||||||||||||||||||
| | | | | ||||||||||||||||||||||
Total | $ | 2,817 | ||||||||||||||||||||||||
| | | | | ||||||||||||||||||||||
| | | | | ||||||||||||||||||||||
Restructuring_Charges
Restructuring Charges | 3 Months Ended | ||||||||||||||||||||||
Jan. 31, 2014 | |||||||||||||||||||||||
Restructuring Charges | ' | ||||||||||||||||||||||
Restructuring Charges | ' | ||||||||||||||||||||||
Note 6: Restructuring Charges | |||||||||||||||||||||||
Summary of Restructuring Plans | |||||||||||||||||||||||
HP's restructuring activities summarized by plan for the three months ended January 31, 2014 were as follows: | |||||||||||||||||||||||
As of January 31, | |||||||||||||||||||||||
Three months | 2014 | ||||||||||||||||||||||
ended | |||||||||||||||||||||||
January 31, | |||||||||||||||||||||||
2014 | |||||||||||||||||||||||
Balance, | Charges | Cash | Other | Balance, | Total | Total | |||||||||||||||||
October 31, | Payments | Adjustments | January 31, | Costs | Expected | ||||||||||||||||||
2013 | and Non-Cash | 2014 | Incurred | Costs to Be | |||||||||||||||||||
Settlements | to Date | Incurred | |||||||||||||||||||||
In millions | |||||||||||||||||||||||
Fiscal 2012 Plan: | |||||||||||||||||||||||
Severance and EER | $ | 945 | $ | 59 | $ | (333 | ) | $ | 4 | $ | 675 | $ | 3,095 | $ | 3,500 | ||||||||
Infrastructure and other | 40 | 56 | (35 | ) | — | 61 | 303 | 600 | |||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | |
Total 2012 Plan | 985 | 115 | (368 | ) | 4 | 736 | 3,398 | 4,100 | |||||||||||||||
Other Plans: | |||||||||||||||||||||||
Severance | 10 | — | (2 | ) | — | 8 | 2,629 | 2,629 | |||||||||||||||
Infrastructure | 122 | (1 | ) | (11 | ) | — | 110 | 1,438 | 1,443 | ||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | |
Total Other Plans | 132 | (1 | ) | (13 | ) | — | 118 | 4,067 | 4,072 | ||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | |
Total restructuring plans | $ | 1,117 | $ | 114 | $ | (381 | ) | $ | 4 | $ | 854 | $ | 7,465 | $ | 8,172 | ||||||||
| | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
At January 31, 2014 and October 31, 2013, HP included the short-term portion of the restructuring liability of $630 million and $901 million, respectively, in Accrued restructuring, and the long-term portion of $224 million and $216 million, respectively, in Other liabilities in the accompanying Consolidated Condensed Balance Sheets. The timing of associated cash payments is dependent upon the type of restructuring charge and can extend over a multi-year period. | |||||||||||||||||||||||
Fiscal 2012 Restructuring Plan | |||||||||||||||||||||||
On May 23, 2012, HP adopted a multi-year restructuring plan (the "2012 Plan") designed to simplify business processes, accelerate innovation and deliver better results for customers, employees and stockholders. HP estimates that it will eliminate approximately 34,000 positions in connection with the 2012 Plan through fiscal year 2014, with a portion of those employees exiting the company as part of voluntary enhanced early retirement ("EER") programs in the United States and in certain other countries. HP estimates it will recognize approximately $4.1 billion in aggregate charges in connection with the 2012 Plan. HP expects to record these charges through the end of HP's 2014 fiscal year as the accounting recognition criteria are met. HP expects approximately $3.5 billion to relate to workforce reductions, including the EER programs, and approximately $0.6 billion to relate to infrastructure, including data center and real estate consolidation, and other items. As of January 31, 2014, HP had eliminated approximately 28,300 positions for which a severance payment has been or will be made as part of the 2012 Plan. The severance and infrastructure related cash payments associated with the 2012 Plan are expected to be paid out through fiscal 2021. | |||||||||||||||||||||||
Other Plans | |||||||||||||||||||||||
Restructuring plans initiated by HP in fiscal 2008 and 2010 have been substantially completed as of January 31, 2014, with $5 million of restructuring charges anticipated in future periods. HP estimates it will recognize approximately $4.1 billion in aggregate charges in connection with these plans. The severance and infrastructure-related cash payments associated with the other plans are expected to be paid out through fiscal 2019. | |||||||||||||||||||||||
Fair_Value
Fair Value | 3 Months Ended | |||||||||||||||||||||||||
Jan. 31, 2014 | ||||||||||||||||||||||||||
Fair Value | ' | |||||||||||||||||||||||||
Fair Value | ' | |||||||||||||||||||||||||
Note 7: 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 | ||||||||||||||||||||||||||
Valuation techniques used by HP are based upon observable and unobservable inputs. Observable or market inputs reflect market data obtained from independent sources, while unobservable inputs reflect HP's assumptions about market participant assumptions based on the best information available. 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 in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. | ||||||||||||||||||||||||||
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 January 31, 2014 | As of October 31, 2013 | |||||||||||||||||||||||||
Fair Value | Fair Value | |||||||||||||||||||||||||
Measured Using | Total | Measured Using | Total | |||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Balance | Level 1 | Level 2 | Level 3 | Balance | |||||||||||||||||||
In millions | ||||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||
Time deposits | $ | — | $ | 3,385 | $ | — | $ | 3,385 | $ | — | $ | 2,221 | $ | — | $ | 2,221 | ||||||||||
Money market funds | 9,627 | — | — | 9,627 | 6,819 | — | — | 6,819 | ||||||||||||||||||
Mutual funds | — | 359 | — | 359 | — | 313 | — | 313 | ||||||||||||||||||
Marketable equity securities | 8 | 7 | — | 15 | 10 | 5 | — | 15 | ||||||||||||||||||
Foreign bonds | 9 | 385 | — | 394 | 9 | 387 | — | 396 | ||||||||||||||||||
Other debt securities | — | 2 | 46 | 48 | — | 2 | 47 | 49 | ||||||||||||||||||
Derivatives: | ||||||||||||||||||||||||||
Interest rate contracts | — | 141 | — | 141 | — | 156 | — | 156 | ||||||||||||||||||
Foreign exchange contracts | — | 556 | — | 556 | — | 284 | 3 | 287 | ||||||||||||||||||
Other derivatives | — | 3 | — | 3 | — | 9 | — | 9 | ||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Total assets | $ | 9,644 | $ | 4,838 | $ | 46 | $ | 14,528 | $ | 6,838 | $ | 3,377 | $ | 50 | $ | 10,265 | ||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Liabilities | ||||||||||||||||||||||||||
Derivatives: | ||||||||||||||||||||||||||
Interest rate contracts | $ | — | $ | 116 | $ | — | $ | 116 | $ | — | $ | 107 | $ | — | $ | 107 | ||||||||||
Foreign exchange contracts | — | 447 | 5 | 452 | — | 547 | 2 | 549 | ||||||||||||||||||
Other derivatives | — | 4 | — | 4 | — | — | — | — | ||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Total liabilities | $ | — | $ | 567 | $ | 5 | $ | 572 | $ | — | $ | 654 | $ | 2 | $ | 656 | ||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
For the three months ended January 31, 2014, there were no transfers between levels within the fair value hierarchy. | ||||||||||||||||||||||||||
Valuation Techniques | ||||||||||||||||||||||||||
Cash Equivalents and Investments: HP holds time deposits, money market funds, mutual funds, other debt securities primarily consisting of corporate and foreign 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 instruments were based on quoted market prices or model driven valuations using inputs primarily derived from or corroborated by observable market data, and in certain instances internally developed valuation models that utilize assumptions which cannot be corroborated with observable market data. | ||||||||||||||||||||||||||
Derivative Instruments: As discussed in Note 8, HP holds forwards, swaps and options to hedge certain foreign currency and interest rate exposures. When prices in active markets are not available for the identical asset or liability, 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. | ||||||||||||||||||||||||||
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 upon 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 estimated fair value of HP's short-and long-term debt was approximately $24.8 billion at January 31, 2014, compared to its carrying value of $24.6 billion at that date. The estimated fair value of HP's short- and long-term debt was approximately $22.7 billion at October 31, 2013, compared to its carrying value of $22.6 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 in other accrued liabilities, 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 3 of the fair value hierarchy. | ||||||||||||||||||||||||||
Non-Marketable Equity Investments and Non-Financial Assets: HP's non-marketable equity investments and 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. | ||||||||||||||||||||||||||
Financial_Instruments
Financial Instruments | 3 Months Ended | |||||||||||||||||||||||||||||||
Jan. 31, 2014 | ||||||||||||||||||||||||||||||||
Financial Instruments | ' | |||||||||||||||||||||||||||||||
Financial Instruments | ' | |||||||||||||||||||||||||||||||
Note 8: Financial Instruments | ||||||||||||||||||||||||||||||||
Cash Equivalents and Available-for-Sale Investments | ||||||||||||||||||||||||||||||||
Cash equivalents and available-for-sale investments as of January 31, 2014 and October 31, 2013 were as follows: | ||||||||||||||||||||||||||||||||
January 31, 2014 | October 31, 2013 | |||||||||||||||||||||||||||||||
Cost | Gross | Gross | Fair | Cost | Gross | Gross | Fair | |||||||||||||||||||||||||
Unrealized | Unrealized | Value | Unrealized | Unrealized | Value | |||||||||||||||||||||||||||
Gain | Loss | Gain | Loss | |||||||||||||||||||||||||||||
In millions | ||||||||||||||||||||||||||||||||
Cash Equivalents | ||||||||||||||||||||||||||||||||
Time deposits | $ | 3,338 | $ | — | $ | — | $ | 3,338 | $ | 2,207 | $ | — | $ | — | $ | 2,207 | ||||||||||||||||
Money market funds | 9,627 | — | — | 9,627 | 6,819 | — | — | 6,819 | ||||||||||||||||||||||||
Mutual funds | 261 | — | — | 261 | 13 | — | — | 13 | ||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | |||||||
Total cash equivalents | 13,226 | — | — | 13,226 | 9,039 | — | — | 9,039 | ||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | |||||||
Available-for-Sale Investments | ||||||||||||||||||||||||||||||||
Debt securities: | ||||||||||||||||||||||||||||||||
Time deposits | 47 | — | — | 47 | 14 | — | — | 14 | ||||||||||||||||||||||||
Foreign bonds | 307 | 87 | — | 394 | 310 | 86 | — | 396 | ||||||||||||||||||||||||
Other debt securities | 63 | — | (15 | ) | 48 | 64 | — | (15 | ) | 49 | ||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | |||||||
Total debt securities | 417 | 87 | (15 | ) | 489 | 388 | 86 | (15 | ) | 459 | ||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | |||||||
Equity securities: | ||||||||||||||||||||||||||||||||
Mutual funds | 98 | — | — | 98 | 300 | — | — | 300 | ||||||||||||||||||||||||
Equity securities in public companies | 8 | 3 | — | 11 | 5 | 6 | — | 11 | ||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | |||||||
Total equity securities | 106 | 3 | — | 109 | 305 | 6 | — | 311 | ||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | |||||||
Total available-for-sale investments | 523 | 90 | (15 | ) | 598 | 693 | 92 | (15 | ) | 770 | ||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | |||||||
Total cash equivalents and available-for-sale investments | $ | 13,749 | $ | 90 | $ | (15 | ) | $ | 13,824 | $ | 9,732 | $ | 92 | $ | (15 | ) | $ | 9,809 | ||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | |||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | |||||||
All highly liquid investments with original maturities of three months or less at the date of acquisition are considered cash equivalents. As of January 31, 2014 and October 31, 2013, the carrying value of cash equivalents approximates fair value due to the short period of time to maturity. Time deposits were primarily issued by institutions outside the United States as of January 31, 2014 and October 31, 2013. The estimated fair value of the available-for-sale investments may not be representative of values that will be realized in the future. | ||||||||||||||||||||||||||||||||
The gross unrealized loss of $15 million as of January 31, 2014 and October 31, 2013 was due primarily to a decline in the fair value of a debt security that has been in a continuous loss position for more than twelve months. HP does not intend to sell this debt security, and it is not likely that HP will be required to sell this debt security prior to the recovery of the amortized cost. | ||||||||||||||||||||||||||||||||
Contractual maturities of short- and long-term investments in available-for-sale debt securities were as follows: | ||||||||||||||||||||||||||||||||
January 31, | ||||||||||||||||||||||||||||||||
2014 | ||||||||||||||||||||||||||||||||
Cost | Fair | |||||||||||||||||||||||||||||||
Value | ||||||||||||||||||||||||||||||||
In millions | ||||||||||||||||||||||||||||||||
Due in one to five years | $ | 34 | $ | 34 | ||||||||||||||||||||||||||||
Due in more than five years | 383 | 455 | ||||||||||||||||||||||||||||||
| | | | | | | | |||||||||||||||||||||||||
$ | 417 | $ | 489 | |||||||||||||||||||||||||||||
| | | | | | | | |||||||||||||||||||||||||
| | | | | | | | |||||||||||||||||||||||||
Equity securities in privately held companies include cost basis and equity method investments. These amounted to $49 million and $50 million at January 31, 2014 and October 31, 2013, respectively, and are included in Long-term financing receivables and other assets in the Consolidated Condensed Balance Sheets. | ||||||||||||||||||||||||||||||||
Derivative Instruments | ||||||||||||||||||||||||||||||||
HP is a global company exposed to foreign currency exchange rate fluctuations and interest rate changes in the normal course of its business. As part of its risk management strategy, HP uses derivative instruments, primarily forward contracts, option contracts, interest rate swaps, and total return swaps, to hedge certain foreign currency, interest rate and, to a lesser extent, equity exposures. HP's objective is to offset gains and losses resulting from these exposures with losses and gains on the derivative contracts used to hedge them, thereby reducing volatility of earnings or protecting fair values of assets and liabilities. HP does not have any leveraged derivatives and does not use derivative contracts for speculative purposes. HP designates its derivatives as fair value hedges, cash flow hedges or hedges of the foreign currency exposure of a net investment in a foreign operation ("net investment hedges"). Additionally, for derivatives not designated as hedging instruments, HP categorizes those economic hedges as other derivatives. HP recognizes all derivative instruments at fair value in the Consolidated Condensed Balance Sheets. HP classifies cash flows from its derivative programs as operating activities in the Consolidated Condensed Statements of Cash Flows. | ||||||||||||||||||||||||||||||||
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. To mitigate counterparty credit risk, HP has a policy of only entering into contracts with carefully selected major financial institutions based upon their credit ratings and other factors, and HP maintains dollar risk limits that correspond to each institution's credit rating and other factors. HP's established policies and procedures for mitigating credit risk include reviewing and establishing limits for credit exposure and periodically re-assessing the creditworthiness of counterparties. Master netting agreements mitigate credit exposure to counterparties by permitting HP to net amounts due from HP to a counterparty against amounts due to HP from the same counterparty under certain conditions. | ||||||||||||||||||||||||||||||||
To further mitigate credit exposure to counterparties, HP has collateral security agreements that allow HP 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 on the derivatives' net liability position. Such funds are generally transferred within two business days of the due date. | ||||||||||||||||||||||||||||||||
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 as of January 31, 2014 and October 31, 2013. | ||||||||||||||||||||||||||||||||
Fair Value Hedges | ||||||||||||||||||||||||||||||||
HP issues long-term debt in U.S. dollars based on market conditions at the time of financing. HP may enter into fair value hedges, such as interest rate swaps, to reduce the exposure of its debt portfolio to interest rate risk and achieve a primarily U.S. dollar LIBOR-based floating interest expense. The swap transactions generally involve principal and interest obligations for U.S. dollar-denominated amounts. Alternatively, HP may choose not to swap fixed for floating interest payments or may terminate a previously executed swap if it believes a larger proportion of fixed-rate debt would be beneficial. | ||||||||||||||||||||||||||||||||
When investing in fixed-rate instruments, HP may enter into interest rate swaps that convert the fixed interest payments into variable interest payments and may designate these swaps as fair value hedges. | ||||||||||||||||||||||||||||||||
For derivative instruments that are designated and qualify as fair value hedges, HP recognizes the gain or loss on the derivative instrument, as well as the offsetting loss or gain on the hedged item, in Interest and other, net in the Consolidated Condensed Statements of Earnings in the period of change. | ||||||||||||||||||||||||||||||||
Cash Flow Hedges | ||||||||||||||||||||||||||||||||
HP uses a combination of forward contracts and options designated as cash flow hedges to protect against the foreign currency exchange rate risks inherent in its forecasted net revenue and, to a lesser extent, cost of sales, operating expenses, and intercompany loans denominated in currencies other than the U.S. dollar. HP's foreign currency cash flow hedges mature generally within twelve months; however, certain leasing revenue-related forward contracts and intercompany loan forward contracts extend for the duration of the lease or loan term, which can be up to five years. | ||||||||||||||||||||||||||||||||
For derivative instruments that are designated and qualify as cash flow hedges, HP initially records the effective portion of the gain or loss on the derivative instrument in Accumulated other comprehensive loss as a separate component of stockholders' equity in 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. During the three months ended January 31, 2014, HP did not discontinue any cash flow hedge for which it was probable that a forecasted transaction would not occur. During the three months ended January 31, 2013 there was no significant impact to results of operations as a result of discontinued cash flow hedges. | ||||||||||||||||||||||||||||||||
Net Investment Hedges | ||||||||||||||||||||||||||||||||
HP uses forward contracts designated as net investment hedges to hedge net investments in certain foreign subsidiaries whose functional currency is the local currency. These derivative instruments are designated as net investment hedges and, as such, HP records the effective portion of the gain or loss on the derivative instrument together with changes in the fair value of the hedged items in Cumulative translation adjustment as a separate component of stockholders' equity in the Consolidated Condensed Balance Sheets. | ||||||||||||||||||||||||||||||||
Other Derivatives | ||||||||||||||||||||||||||||||||
Other derivatives not designated as hedging instruments consist primarily of forward contracts HP uses to hedge foreign currency-denominated balance sheet exposures. HP also uses total return swaps and, to a lesser extent, interest rate swaps, based on equity or fixed income indices, to hedge its executive deferred compensation plan liability. | ||||||||||||||||||||||||||||||||
For derivative instruments not designated as hedging instruments, HP recognizes changes in fair value in earnings in the period of change. HP recognizes the gain or loss on foreign currency forward contracts used to hedge balance sheet exposures in Interest and other, net in the Consolidated Condensed Statements of Earnings in the same period as the remeasurement gain and loss of the related foreign currency-denominated assets and liabilities. HP recognizes the gain or loss on the total return swaps and interest rate swaps in Interest and other, net in the same period as the gain or loss from changes in the fair value of amounts owed to participants in the executive deferred compensation plan. | ||||||||||||||||||||||||||||||||
Hedge Effectiveness | ||||||||||||||||||||||||||||||||
For interest rate swaps designated as fair value hedges, HP measures effectiveness by offsetting the change in fair value of the hedged instrument with the change in fair value of the derivative. For foreign currency options and forward contracts designated as cash flow or net investment hedges, HP measures effectiveness by comparing the cumulative change in the hedge contract with the cumulative change in 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. | ||||||||||||||||||||||||||||||||
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 January 31, 2014 | As of October 31, 2013 | |||||||||||||||||||||||||||||||
Gross | Other | Long-Term | Other | Long-Term | Gross | Other | Long-Term | Other | Long-Term | |||||||||||||||||||||||
Notional(1) | Current | Financing | Accrued | Other | Notional(1) | Current | Financing | Accrued | Other | |||||||||||||||||||||||
Assets | Receivables | Liabilities | Liabilities | Assets | Receivables | Liabilities | Liabilities | |||||||||||||||||||||||||
and Other | and Other | |||||||||||||||||||||||||||||||
Assets | Assets | |||||||||||||||||||||||||||||||
In millions | ||||||||||||||||||||||||||||||||
Derivatives designated as hedging instruments | ||||||||||||||||||||||||||||||||
Fair value hedges: | ||||||||||||||||||||||||||||||||
Interest rate contracts | $ | 12,350 | $ | 14 | $ | 127 | $ | — | $ | 116 | $ | 11,100 | $ | 31 | $ | 125 | $ | — | $ | 107 | ||||||||||||
Cash flow hedges: | ||||||||||||||||||||||||||||||||
Foreign exchange contracts | 22,035 | 226 | 60 | 234 | 106 | 22,463 | 79 | 40 | 341 | 80 | ||||||||||||||||||||||
Net investment hedges: | ||||||||||||||||||||||||||||||||
Foreign exchange contracts | 1,957 | 60 | 67 | 7 | 9 | 1,920 | 30 | 40 | 20 | 12 | ||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total derivatives designated as hedging instruments | 36,342 | 300 | 254 | 241 | 231 | 35,483 | 140 | 205 | 361 | 199 | ||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Derivatives not designated as hedging instruments | ||||||||||||||||||||||||||||||||
Foreign exchange contracts | 12,652 | 98 | 45 | 64 | 32 | 16,048 | 72 | 26 | 76 | 20 | ||||||||||||||||||||||
Other derivatives | 310 | 2 | 1 | 4 | — | 344 | 8 | 1 | — | — | ||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total derivatives not designated as hedging instruments | 12,962 | 100 | 46 | 68 | 32 | 16,392 | 80 | 27 | 76 | 20 | ||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total derivatives | $ | 49,304 | $ | 400 | $ | 300 | $ | 309 | $ | 263 | $ | 51,875 | $ | 220 | $ | 232 | $ | 437 | $ | 219 | ||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
-1 | ||||||||||||||||||||||||||||||||
Represents the amount of contracts that were outstanding as of January 31, 2014 and October 31, 2013, respectively. | ||||||||||||||||||||||||||||||||
Offsetting of Derivative Instruments | ||||||||||||||||||||||||||||||||
HP recognizes all derivatives 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 under its collateral security agreements. As of January 31, 2014 and October 31, 2013 information related to the potential effect of HP's master netting agreements and collateral security agreements were as follows: | ||||||||||||||||||||||||||||||||
As of January 31, 2014 | ||||||||||||||||||||||||||||||||
In the Consolidated Condensed Balance Sheets | ||||||||||||||||||||||||||||||||
(i) | (ii) | (iii) =i)-(ii) | (iv) | (v) | (vi) =iii)-(iv)-(v) | |||||||||||||||||||||||||||
Gross Amounts Not Offset | ||||||||||||||||||||||||||||||||
Gross Amount | Gross Amount | Net Amount | Derivatives | Financial | Net Amount | |||||||||||||||||||||||||||
Recognized | Offset | Presented | Collateral | |||||||||||||||||||||||||||||
In millions | ||||||||||||||||||||||||||||||||
Derivative assets | $ | 700 | $ | — | $ | 700 | $ | 363 | $ | 180 | $ | 157 | ||||||||||||||||||||
Derivative liabilities | $ | 572 | $ | — | $ | 572 | $ | 363 | $ | 155 | -1 | $ | 54 | |||||||||||||||||||
-1 | ||||||||||||||||||||||||||||||||
Of the $155 million of collateral posted, $62 million was through re-use of counterparty cash collateral and $93 million was in cash. | ||||||||||||||||||||||||||||||||
As of October 31, 2013 | ||||||||||||||||||||||||||||||||
In the Consolidated Condensed Balance Sheets | ||||||||||||||||||||||||||||||||
(i) | (ii) | (iii) =i)-(ii) | (iv) | (v) | (vi) =iii)-(iv)-(v) | |||||||||||||||||||||||||||
Gross Amounts Not Offset | ||||||||||||||||||||||||||||||||
Gross Amount | Gross Amount | Net Amount | Derivatives | Financial | Net Amount | |||||||||||||||||||||||||||
Recognized | Offset | Presented | Collateral | |||||||||||||||||||||||||||||
In millions | ||||||||||||||||||||||||||||||||
Derivative assets | $ | 452 | $ | — | $ | 452 | $ | 372 | $ | 30 | $ | 50 | ||||||||||||||||||||
Derivative liabilities | $ | 656 | $ | — | $ | 656 | $ | 372 | $ | 283 | -1 | $ | 1 | |||||||||||||||||||
-1 | ||||||||||||||||||||||||||||||||
Of the $283 million of collateral posted, $30 million was through re-use of counterparty cash collateral and $253 million was in cash. | ||||||||||||||||||||||||||||||||
Effect of Derivative Instruments on the Consolidated Condensed Statements of Earnings | ||||||||||||||||||||||||||||||||
The pre-tax effect of derivative instruments and related hedged items in a fair value hedging relationship for the three months ended January 31, 2014 and 2013 were as follows: | ||||||||||||||||||||||||||||||||
Gain (Loss) Recognized in Earnings on Derivative and Related Hedged Item | ||||||||||||||||||||||||||||||||
Derivative Instrument | Location | Three | Hedged Item | Location | Three | |||||||||||||||||||||||||||
months | months | |||||||||||||||||||||||||||||||
ended | ended | |||||||||||||||||||||||||||||||
January 31, | January 31, | |||||||||||||||||||||||||||||||
2014 | 2014 | |||||||||||||||||||||||||||||||
In millions | In millions | |||||||||||||||||||||||||||||||
Interest rate contracts | Interest and other, net | $ | (24 | ) | Fixed-rate debt | Interest and other, net | $ | 24 | ||||||||||||||||||||||||
Gain (Loss) Recognized in Earnings on Derivative and Related Hedged Item | ||||||||||||||||||||||||||||||||
Derivative Instrument | Location | Three | Hedged Item | Location | Three | |||||||||||||||||||||||||||
months | months | |||||||||||||||||||||||||||||||
ended | ended | |||||||||||||||||||||||||||||||
January 31, | January 31, | |||||||||||||||||||||||||||||||
2013 | 2013 | |||||||||||||||||||||||||||||||
In millions | In millions | |||||||||||||||||||||||||||||||
Interest rate contracts | Interest and other, net | $ | (99 | ) | Fixed-rate debt | Interest and other, net | $ | 98 | ||||||||||||||||||||||||
The pre-tax effect of derivative instruments in cash flow and net investment hedging relationships for the three months ended January 31, 2014 and 2013 were as follows: | ||||||||||||||||||||||||||||||||
Gain (Loss) | Gain (Loss) Reclassified from | |||||||||||||||||||||||||||||||
Recognized in | Accumulated OCI into Earnings | |||||||||||||||||||||||||||||||
Other | (Effective Portion) | |||||||||||||||||||||||||||||||
Comprehensive | ||||||||||||||||||||||||||||||||
Income ("OCI") | ||||||||||||||||||||||||||||||||
on Derivatives | ||||||||||||||||||||||||||||||||
(Effective Portion) | ||||||||||||||||||||||||||||||||
Three months ended | Location | Three months | ||||||||||||||||||||||||||||||
January 31, 2014 | ended January 31, | |||||||||||||||||||||||||||||||
2014 | ||||||||||||||||||||||||||||||||
In millions | In millions | |||||||||||||||||||||||||||||||
Cash flow hedges: | ||||||||||||||||||||||||||||||||
Foreign exchange contracts | $ | 175 | Net revenue | $ | (63 | ) | ||||||||||||||||||||||||||
Foreign exchange contracts | (87 | ) | Cost of products | (23 | ) | |||||||||||||||||||||||||||
Foreign exchange contracts | — | Other operating expenses | (4 | ) | ||||||||||||||||||||||||||||
Foreign exchange contracts | (18 | ) | Interest and other, net | (19 | ) | |||||||||||||||||||||||||||
| | | | | | | | | | |||||||||||||||||||||||
Total cash flow hedges | $ | 70 | $ | (109 | ) | |||||||||||||||||||||||||||
| | | | | | | | | | |||||||||||||||||||||||
| | | | | | | | | | |||||||||||||||||||||||
Net investment hedges: | ||||||||||||||||||||||||||||||||
Foreign exchange contracts | $ | 66 | Interest and other, net | $ | — | |||||||||||||||||||||||||||
| | | | | | | | | | |||||||||||||||||||||||
| | | | | | | | | | |||||||||||||||||||||||
Gain (Loss) | Gain (Loss) Reclassified from | |||||||||||||||||||||||||||||||
Recognized in | Accumulated OCI into Earnings | |||||||||||||||||||||||||||||||
OCI on Derivatives | (Effective Portion) | |||||||||||||||||||||||||||||||
(Effective Portion) | ||||||||||||||||||||||||||||||||
Three months ended | Location | Three months | ||||||||||||||||||||||||||||||
January 31, 2013 | ended January 31, | |||||||||||||||||||||||||||||||
2013 | ||||||||||||||||||||||||||||||||
In millions | In millions | |||||||||||||||||||||||||||||||
Cash flow hedges: | ||||||||||||||||||||||||||||||||
Foreign exchange contracts | $ | (199 | ) | Net revenue | $ | (57 | ) | |||||||||||||||||||||||||
Foreign exchange contracts | (125 | ) | Cost of products | (3 | ) | |||||||||||||||||||||||||||
Foreign exchange contracts | 8 | Other operating expenses | 1 | |||||||||||||||||||||||||||||
Foreign exchange contracts | 2 | Interest and other, net | (5 | ) | ||||||||||||||||||||||||||||
| | | | | | | | | | |||||||||||||||||||||||
Total cash flow hedges | $ | (314 | ) | $ | (64 | ) | ||||||||||||||||||||||||||
| | | | | | | | | | |||||||||||||||||||||||
| | | | | | | | | | |||||||||||||||||||||||
Net investment hedges: | ||||||||||||||||||||||||||||||||
Foreign exchange contracts | $ | (15 | ) | Interest and other, net | $ | — | ||||||||||||||||||||||||||
| | | | | | | | | | |||||||||||||||||||||||
| | | | | | | | | | |||||||||||||||||||||||
As of January 31, 2014, no portion of the hedging instruments gain or loss was excluded from the assessment of effectiveness for fair value, cash flow or net investment hedges. As of January 31, 2013, the portion of hedging instruments gain or loss excluded from the assessment of effectiveness was not material for fair value, cash flow or net investment hedges. Hedge ineffectiveness for fair value, cash flow and net investment hedges was not material in the three months ended January 31, 2014 and 2013. | ||||||||||||||||||||||||||||||||
As of January 31, 2014, HP expects to reclassify an estimated net Accumulated other comprehensive loss of approximately $28 million, net of taxes, to earnings in the next twelve months along with the earnings effects of the related forecasted transactions associated with cash flow hedges. | ||||||||||||||||||||||||||||||||
The pre-tax effect of derivative instruments not designated as hedging instruments on the Consolidated Condensed Statements of Earnings for the three months ended January 31, 2014 and 2013 were as follows: | ||||||||||||||||||||||||||||||||
Gain (Loss) Recognized in Earnings on Derivatives | ||||||||||||||||||||||||||||||||
Location | Three months ended | |||||||||||||||||||||||||||||||
January 31, 2014 | ||||||||||||||||||||||||||||||||
In millions | ||||||||||||||||||||||||||||||||
Foreign exchange contracts | Interest and other, net | $ | 190 | |||||||||||||||||||||||||||||
Other derivatives | Interest and other, net | (10 | ) | |||||||||||||||||||||||||||||
Interest rate contracts | Interest and other, net | — | ||||||||||||||||||||||||||||||
| | | | | | | ||||||||||||||||||||||||||
Total | $ | 180 | ||||||||||||||||||||||||||||||
| | | | | | | ||||||||||||||||||||||||||
| | | | | | | ||||||||||||||||||||||||||
Gain (Loss) Recognized in Earnings on Derivatives | ||||||||||||||||||||||||||||||||
Location | Three months ended | |||||||||||||||||||||||||||||||
January 31, 2013 | ||||||||||||||||||||||||||||||||
In millions | ||||||||||||||||||||||||||||||||
Foreign exchange contracts | Interest and other, net | $ | (40 | ) | ||||||||||||||||||||||||||||
Other derivatives | Interest and other, net | 7 | ||||||||||||||||||||||||||||||
Interest rate contracts | Interest and other, net | 2 | ||||||||||||||||||||||||||||||
| | | | | | | ||||||||||||||||||||||||||
Total | $ | (31 | ) | |||||||||||||||||||||||||||||
| | | | | | | ||||||||||||||||||||||||||
| | | | | | | ||||||||||||||||||||||||||
Financing_Receivables_and_Oper
Financing Receivables and Operating Leases | 3 Months Ended | |||||||
Jan. 31, 2014 | ||||||||
Financing Receivables and Operating Leases | ' | |||||||
Financing Receivables and Operating Leases | ' | |||||||
Note 9: Financing Receivables and Operating Leases | ||||||||
Financing receivables represent sales-type and direct-financing leases resulting from the placement of HP and third-party products. These receivables typically have terms from two to five years and are usually collateralized by a security interest in the underlying assets. Financing receivables also include billed receivables from operating leases. The components of financing receivables, which are included in Financing receivables, net and Long-term financing receivables and other assets in the accompanying Consolidated Condensed Balance Sheets, were as follows: | ||||||||
January 31, | October 31, | |||||||
2014 | 2013 | |||||||
In millions | ||||||||
Minimum lease payments receivable | $ | 7,198 | $ | 7,505 | ||||
Unguaranteed residual value | 249 | 252 | ||||||
Unearned income | (597 | ) | (604 | ) | ||||
| | | | | | | | |
Financing receivables, gross | 6,850 | 7,153 | ||||||
Allowance for doubtful accounts | (132 | ) | (131 | ) | ||||
| | | | | | | | |
Financing receivables, net | 6,718 | 7,022 | ||||||
Less current portion | (3,054 | ) | (3,144 | ) | ||||
| | | | | | | | |
Amounts due after one year, net | $ | 3,664 | $ | 3,878 | ||||
| | | | | | | | |
| | | | | | | | |
Credit Quality Indicators | ||||||||
Due to the homogenous nature of its leasing transactions, HP manages its financing receivables on an aggregate basis when assessing and monitoring credit risk. Credit risk is generally diversified due to the large number of entities comprising HP's customer base and their dispersion across many different industries and geographical regions. HP evaluates the credit quality of an obligor at lease inception and monitors that credit quality over the term of a transaction. HP assigns risk ratings to each lease based on the creditworthiness of the obligor and other variables that augment or mitigate the inherent credit risk of a particular transaction. Such variables include the underlying value and liquidity of the collateral, the essential use of the equipment, the term of the lease, and the inclusion of guarantees, letters of credit, security deposits or other credit enhancements. | ||||||||
The credit risk profile of gross financing receivables, based on internally assigned ratings, was as follows: | ||||||||
January 31, | October 31, | |||||||
2014 | 2013 | |||||||
In millions | ||||||||
Risk Rating | ||||||||
Low | $ | 3,724 | $ | 3,948 | ||||
Moderate | 3,000 | 3,084 | ||||||
High | 126 | 121 | ||||||
| | | | | | | | |
Total | $ | 6,850 | $ | 7,153 | ||||
| | | | | | | | |
| | | | | | | | |
Accounts rated low risk typically have the equivalent of a Standard & Poor's rating of BBB- or higher, while accounts rated moderate risk generally have the equivalent of BB+ or lower. HP classifies accounts as high risk when it considers the financing receivable to be impaired or when management believes that there is a near-term risk of impairment. | ||||||||
Allowance for Doubtful Accounts | ||||||||
The allowance for doubtful accounts for financing receivables is comprised of a general reserve and a specific reserve. HP maintains general reserve percentages on a regional basis and bases such percentages on several factors, including consideration of historical credit losses and portfolio delinquencies, trends in the overall weighted-average risk rating of the portfolio, current economic conditions and information derived from competitive benchmarking. HP excludes accounts evaluated as part of the specific reserve from the general reserve analysis. HP establishes a specific reserve for leases with identified exposures, such as customer defaults, bankruptcy or other events, that make it unlikely that HP will recover its investment in the lease. For individually evaluated receivables, HP determines the expected cash flow for the receivable, which includes consideration of estimated proceeds from disposition of the collateral, and calculates an estimate of the potential loss and the probability of loss. For those accounts where a loss is probable, HP records a specific reserve. HP generally records a write-off or specific reserve when an account reaches 180 days past due, or sooner if HP determines that the account is not collectible. | ||||||||
The allowance for doubtful accounts for financing receivables as of January 31, 2014, and changes during the three months ended January 31, 2014 were as follows: | ||||||||
Three months ended | ||||||||
January 31, 2014 | ||||||||
In millions | ||||||||
Balance at beginning of period | $ | 131 | ||||||
Provision for doubtful accounts | 7 | |||||||
Deductions, net of recoveries | (6 | ) | ||||||
| | | | | ||||
Balance at end of period | $ | 132 | ||||||
| | | | | ||||
| | | | | ||||
The allowance and related gross financing receivables collectively and individually evaluated for loss were as follows: | ||||||||
January 31, | October 31, | |||||||
2014 | 2013 | |||||||
In millions | ||||||||
Allowance for financing receivables collectively evaluated for loss | $ | 93 | $ | 95 | ||||
Allowance for financing receivables individually evaluated for loss | 39 | 36 | ||||||
| | | | | | | | |
Total | $ | 132 | $ | 131 | ||||
| | | | | | | | |
| | | | | | | | |
Gross financing receivables collectively evaluated for loss | $ | 6,510 | $ | 6,773 | ||||
Gross financing receivables individually evaluated for loss | 340 | 380 | ||||||
| | | | | | | | |
Total | $ | 6,850 | $ | 7,153 | ||||
| | | | | | | | |
| | | | | | | | |
Non-Accrual and Past-Due Financing Receivables | ||||||||
HP considers a financing receivable to be past due when the minimum payment is not received by the contractually specified due date. HP generally places financing receivables on non-accrual status (suspension of interest accrual) and considers such receivables to be non-performing at the earlier of the time at which full payment of principal and interest becomes doubtful or the receivable becomes contractually 90 days past due. Subsequently, HP may recognize revenue on non-accrual financing receivables as payments are received (i.e., on a cash basis) if HP deems the recorded financing receivable to be fully collectible; however, if there is doubt regarding the ultimate collectability of the recorded financing receivable, HP applies all cash receipts to reduce the carrying amount of the financing receivable (i.e., the cost recovery method). In certain circumstances, such as when HP deems a delinquency to be of an administrative nature, financing receivables may accrue interest after they reach 90 days past due. The non-accrual status of a financing receivable may not impact a customer's risk rating. After all of a customer's delinquent principal and interest balances are settled, HP may return the related financing receivable to accrual status. | ||||||||
The following table summarizes the aging and non-accrual status of gross financing receivables: | ||||||||
January 31, | October 31, | |||||||
2014 | 2013 | |||||||
In millions | ||||||||
Billed(1): | ||||||||
Current 1-30 days | $ | 242 | $ | 217 | ||||
Past due 31-60 days | 38 | 50 | ||||||
Past due 61-90 days | 24 | 15 | ||||||
Past due >90 days | 56 | 46 | ||||||
Unbilled sales-type and direct-financing lease receivables | 6,490 | 6,825 | ||||||
| | | | | | | | |
Total gross financing receivables | $ | 6,850 | $ | 7,153 | ||||
| | | | | | | | |
| | | | | | | | |
Gross financing receivables on non-accrual status(2) | $ | 191 | $ | 199 | ||||
| | | | | | | | |
| | | | | | | | |
Gross financing receivables 90 days past due and still accruing interest(2) | $ | 149 | $ | 181 | ||||
| | | | | | | | |
| | | | | | | | |
-1 | ||||||||
Includes billed operating lease receivables and billed sales-type and direct-financing lease receivables. | ||||||||
-2 | ||||||||
Includes billed operating lease receivables and billed and unbilled sales-type and direct-financing lease receivables. | ||||||||
Operating Leases | ||||||||
Operating lease assets included in machinery and equipment in the Consolidated Condensed Balance Sheets were as follows: | ||||||||
January 31, | October 31, | |||||||
2014 | 2013 | |||||||
In millions | ||||||||
Equipment leased to customers | $ | 3,751 | $ | 3,822 | ||||
Accumulated depreciation | (1,404 | ) | (1,452 | ) | ||||
| | | | | | | | |
Operating lease assets, net | $ | 2,347 | $ | 2,370 | ||||
| | | | | | | | |
| | | | | | | | |
Guarantees
Guarantees | 3 Months Ended | ||||
Jan. 31, 2014 | |||||
Guarantees | ' | ||||
Guarantees | ' | ||||
Note 10: Guarantees | |||||
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. | |||||
HP has entered into service contracts with certain of its clients that are supported by financing arrangements. If a service contract is terminated as a result of HP's non-performance under the contract or failure to comply with the terms of the financing arrangement, HP could, under certain circumstances, be required to acquire certain assets related to the service contract. HP believes the likelihood of it being required to acquire a material amount of assets under these arrangements is remote. | |||||
Indemnifications | |||||
In the ordinary course of business, HP enters into contractual arrangements under which HP may agree to indemnify the 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 against claims of intellectual property infringement made by third parties arising from the vendor's use of HP's software products and certain other matters. Such indemnification obligations may not be subject to maximum loss clauses. Historically, payments made related to these indemnifications have been immaterial. | |||||
Warranty | |||||
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, 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 as of January 31, 2014, and changes during the three months ended January 31, 2014 were as follows: | |||||
Three months ended | |||||
January 31, 2014 | |||||
In millions | |||||
Balance at beginning of period | $ | 2,031 | |||
Accruals for warranties issued | 447 | ||||
Adjustments related to pre-existing warranties (including changes in estimates) | 7 | ||||
Settlements made (in cash or in kind) | (481 | ) | |||
| | | | | |
Balance at end of period | $ | 2,004 | |||
| | | | | |
| | | | | |
Borrowings
Borrowings | 3 Months Ended | |||||||||||||
Jan. 31, 2014 | ||||||||||||||
Borrowings | ' | |||||||||||||
Borrowings | ' | |||||||||||||
Note 11: Borrowings | ||||||||||||||
Notes Payable and Short-Term Borrowings | ||||||||||||||
Notes payable and short-term borrowings, including the current portion of long-term debt, were as follows: | ||||||||||||||
January 31, 2014 | October 31, 2013 | |||||||||||||
Amount | Weighted- | Amount | Weighted- | |||||||||||
Outstanding | Average | Outstanding | Average | |||||||||||
Interest | Interest | |||||||||||||
Rate | Rate | |||||||||||||
In millions | In millions | |||||||||||||
Current portion of long-term debt | $ | 5,882 | 2.7 | % | $ | 5,226 | 2.8 | % | ||||||
Commercial paper(1) | 308 | 0.4 | % | 327 | 0.4 | % | ||||||||
Notes payable to banks, lines of credit and other(1) | 431 | 3.7 | % | 426 | 1.7 | % | ||||||||
| | | | | | | | | | | | | | |
$ | 6,621 | $ | 5,979 | |||||||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
-1 | ||||||||||||||
Commercial paper includes $308 million and $327 million and Notes payable to banks, lines of credit and other includes $389 million and $368 million at January 31, 2014 and October 31, 2013, respectively, of borrowing and funding-related activity associated with HP Financial Services ("HPFS") and its subsidiaries. | ||||||||||||||
Long-Term Debt | ||||||||||||||
Long-term debt was as follows: | ||||||||||||||
January 31, | October 31, | |||||||||||||
2014 | 2013 | |||||||||||||
In millions | ||||||||||||||
U.S. Dollar Global Notes | ||||||||||||||
2006 Shelf Registration Statement: | ||||||||||||||
$500 issued at discount to par at a price of 99.694% in February 2007 at 5.4%, due March 2017 | $ | 499 | $ | 499 | ||||||||||
$750 issued at discount to par at a price of 99.932% in March 2008 at 5.5%, due March 2018 | 750 | 750 | ||||||||||||
$2,000 issued at discount to par at a price of 99.561% in December 2008 at 6.125%, paid March 2014 | 2,000 | 1,999 | ||||||||||||
$1,500 issued at discount to par at a price of 99.993% in February 2009 at 4.75%, due June 2014 | 1,500 | 1,500 | ||||||||||||
2009 Shelf Registration Statement: | ||||||||||||||
$1,100 issued at discount to par at a price of 99.887% in September 2010 at 2.125%, due September 2015 | 1,100 | 1,100 | ||||||||||||
$650 issued at discount to par at a price of 99.911% in December 2010 at 2.2%, due December 2015 | 650 | 650 | ||||||||||||
$1,350 issued at discount to par at a price of 99.827% in December 2010 at 3.75%, due December 2020 | 1,349 | 1,349 | ||||||||||||
$500 issued at par in May 2011 at three-month USD LIBOR plus 0.4%, due May 2014 | 500 | 500 | ||||||||||||
$500 issued at discount to par at a price of 99.971% in May 2011 at 1.55%, due May 2014 | 500 | 500 | ||||||||||||
$1,000 issued at discount to par at a price of 99.958% in May 2011 at 2.65%, due June 2016 | 1,000 | 1,000 | ||||||||||||
$1,250 issued at discount to par at a price of 99.799% in May 2011 at 4.3%, due June 2021 | 1,248 | 1,248 | ||||||||||||
$750 issued at discount to par at a price of 99.977% in September 2011 at 2.35%, due March 2015 | 750 | 750 | ||||||||||||
$1,300 issued at discount to par at a price of 99.784% in September 2011 at 3.0%, due September 2016 | 1,298 | 1,298 | ||||||||||||
$1,000 issued at discount to par at a price of 99.816% in September 2011 at 4.375%, due September 2021 | 999 | 999 | ||||||||||||
$1,200 issued at discount to par at a price of 99.863% in September 2011 at 6.0%, due September 2041 | 1,198 | 1,198 | ||||||||||||
$350 issued at par in September 2011 at three-month USD LIBOR plus 1.55%, due September 2014 | 350 | 350 | ||||||||||||
$650 issued at discount to par at a price of 99.946% in December 2011 at 2.625%, due December 2014 | 650 | 650 | ||||||||||||
$850 issued at discount to par at a price of 99.790% in December 2011 at 3.3%, due December 2016 | 849 | 849 | ||||||||||||
$1,500 issued at discount to par at a price of 99.707% in December 2011 at 4.65%, due December 2021 | 1,496 | 1,496 | ||||||||||||
$1,500 issued at discount to par at a price of 99.985% in March 2012 at 2.6%, due September 2017 | 1,500 | 1,500 | ||||||||||||
$500 issued at discount to par at a price of 99.771% in March 2012 at 4.05%, due September 2022 | 499 | 499 | ||||||||||||
2012 Shelf Registration Statement: | ||||||||||||||
$750 issued at par in January 2014 at three-month USD LIBOR plus 0.94%, due January 2019 | 750 | — | ||||||||||||
$1,250 issued at discount to par at a price of 99.954% in January 2014 at 2.75%, due January 2019 | 1,249 | — | ||||||||||||
| | | | | | | | |||||||
22,684 | 20,684 | |||||||||||||
EDS Senior Notes | ||||||||||||||
$300 issued October 1999 at 7.45%, due October 2029 | 314 | 314 | ||||||||||||
Other, including capital lease obligations, at 0.00%-8.50%, due in calendar years 2014-2024(1) | 740 | 689 | ||||||||||||
Fair value adjustment related to hedged debt | 115 | 147 | ||||||||||||
Less: current portion | (5,882 | ) | (5,226 | ) | ||||||||||
| | | | | | | | |||||||
Total long-term debt | $ | 17,971 | $ | 16,608 | ||||||||||
| | | | | | | | |||||||
| | | | | | | | |||||||
-1 | ||||||||||||||
Other, including capital lease obligations includes $211 million and $244 million at January 31, 2014 and October 31, 2013, respectively, of borrowing and funding-related activity associated with HPFS and its subsidiaries that are collateralized by receivables and underlying assets associated with the related capital and operating leases. For both the periods presented, the carrying amount of the assets approximated the carrying amount of the borrowings. | ||||||||||||||
As disclosed in Note 8, HP uses interest rate swaps to mitigate interest rate risk in connection with certain fixed-rate global notes in order to achieve primarily U.S. dollar LIBOR-based floating interest expense. The interest rates in the table above have not been adjusted to reflect the impact of any interest rate swaps. | ||||||||||||||
HP may redeem some or all of the fixed-rate U.S. Dollar Global Notes and EDS Senior Notes set forth in the above table at any time in accordance with the terms thereof. The U.S. Dollar Global Notes are senior unsecured debt. | ||||||||||||||
In May 2012, HP filed a shelf registration statement (the "2012 Shelf Registration Statement") with the Securities Exchange Commission ("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. The 2012 Shelf Registration Statement replaced the registration statement filed in May 2009. | ||||||||||||||
HP's Board of Directors has authorized the issuance of up to $16.0 billion in aggregate principal amount of commercial paper by HP. HP's subsidiaries are authorized to issue up to an additional $1.0 billion in aggregate principal amount of commercial paper. HP maintains two commercial paper programs, and a wholly-owned subsidiary maintains a third program. HP's U.S. program provides for the issuance of U.S. dollar-denominated commercial paper up to a maximum aggregate principal amount of $16.0 billion. HP's euro commercial paper program, which was established in September 2012, 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 $3.0 billion or the equivalent in those alternative currencies. The combined aggregate principal amount of commercial paper outstanding under those programs at any one time cannot exceed the $16.0 billion authorized by HP's Board of Directors. The HP subsidiary's Euro Commercial Paper/Certificate of Deposit Programme provides for the issuance of commercial paper in various currencies of up to a maximum aggregate principal amount of $500 million. | ||||||||||||||
HP maintains senior unsecured committed credit facilities primarily to support the issuance of commercial paper. HP has a $3.0 billion five-year credit facility that expires in March 2017 and a $4.5 billion four-year credit facility that expires in February 2015. Both facilities support the U.S. commercial paper program and the euro commercial paper program. In addition, the five-year credit facility was amended in September 2012 to permit borrowings in euros and British pounds, with the amounts available in euros and pounds being limited to the U.S. dollar equivalent of $2.2 billion and $300 million, respectively. Commitment fees, interest rates and other terms of borrowing under the credit facilities vary based on HP's external credit ratings. HP's ability to have an outstanding U.S. commercial paper balance that exceeds the $7.5 billion supported by these credit facilities is subject to a number of factors, including liquidity conditions and business performance. | ||||||||||||||
As of January 31, 2014, HP had the capacity to issue an unspecified amount of additional debt securities, common stock, preferred stock, depositary shares and warrants under the 2012 Shelf Registration Statement. As of that date, HP also had up to $17.6 billion of available borrowing resources, including $16.2 billion in available capacity under its commercial paper programs and $1.4 billion relating to uncommitted lines of credit. The extent to which HP is able to utilize the 2012 Shelf Registration Statement and the commercial paper programs as sources of liquidity at any given time is subject to a number of factors, including market demand for HP securities and commercial paper, HP's financial performance, HP's credit ratings and market conditions generally. | ||||||||||||||
Interest expense on borrowings recognized in the Consolidated Condensed Statements of Earnings was as follows: | ||||||||||||||
Three months | ||||||||||||||
ended | ||||||||||||||
January 31 | ||||||||||||||
Expense | Location | 2014 | 2013 | |||||||||||
In millions | ||||||||||||||
Financing interest | Financing interest | $ | 72 | $ | 80 | |||||||||
Interest expense | Interest and other, net | 99 | 122 | |||||||||||
| | | | | | | | | | |||||
Total interest expense | $ | 171 | $ | 202 | ||||||||||
| | | | | | | | | | |||||
| | | | | | | | | | |||||
Income_Taxes
Income Taxes | 3 Months Ended | |||||||
Jan. 31, 2014 | ||||||||
Income Taxes | ' | |||||||
Income Taxes | ' | |||||||
Note 12: Income Taxes | ||||||||
Provision for Taxes | ||||||||
HP's effective tax rate was 22.3% and 21.7% for the three months ended January 31, 2014 and 2013, respectively. HP's effective tax rate generally differs from the U.S. federal statutory tax rate of 35% due to favorable tax rates associated with certain earnings from HP's operations in lower-tax jurisdictions throughout the world. HP has not provided U.S. taxes for all foreign earnings because HP plans to reinvest some of those earnings indefinitely outside the United States. | ||||||||
In the three months ended January 31, 2014, HP recorded $22 million of net tax charges related to discrete items. These amounts included $37 million of various tax charges and $15 million of tax benefits on restructuring charges. | ||||||||
In the three months ended January 31, 2013, HP recorded $5 million of net tax charges related to discrete items. These amounts consisted primarily of a tax charge of $150 million related to a past uncertain tax position offset by approximately $50 million of various adjustments to estimated tax provisions of foreign jurisdictions as well as $45 million of benefits associated with restructuring charges, various uncertain tax positions and valuation allowance adjustments. In addition, in January 2013, the American Taxpayer Relief Act of 2012 was signed into law. HP recorded a tax benefit of $50 million arising from the retroactive research and development credit provided by that legislation in the first quarter of fiscal 2013. | ||||||||
Uncertain Tax Positions | ||||||||
HP is subject to income tax in the United States and approximately 80 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. HP believes it has provided adequate reserves for all tax deficiencies or reductions in tax benefits that could result from federal, state and foreign tax audits. HP regularly assesses the likely outcomes of these audits in order to determine the appropriateness of our tax provision. HP adjusts its uncertain tax positions to reflect the impact of negotiations, settlements, rulings, advice of legal counsel, and other information and events pertaining to a particular audit. However, income tax audits are inherently unpredictable and there can be no assurance that HP will accurately predict the outcome of these audits. The amounts ultimately paid on resolution of an audit could be materially different from the amounts previously included in the Provision for taxes and therefore the resolution of one or more of these uncertainties in any particular period could have a material impact on net income or cash flows. | ||||||||
As of January 31, 2014, the amount of unrecognized tax benefits was $3.5 billion, of which up to $1.8 billion would affect HP's effective tax rate if realized. HP recognizes interest income from favorable settlements and income tax receivables and interest expense and penalties accrued on unrecognized tax benefits in Provision for taxes in the Consolidated Condensed Statements of Earnings. As of January 31, 2014, HP had accrued $212 million for interest and penalties. | ||||||||
HP engages in continuous discussions and negotiations with taxing authorities regarding tax matters in various jurisdictions. HP does not expect complete resolution of any U.S. Internal Revenue Service audit cycle within the next 12 months. However, it is reasonably possible that certain federal, foreign and state tax issues may be concluded in the next 12 months, including issues involving transfer pricing and other matters. Accordingly, HP believes it is reasonably possible that its existing unrecognized tax benefits may be reduced by an amount up to $1.2 billion within the next 12 months. | ||||||||
Deferred Tax Assets and Liabilities | ||||||||
Current and long-term deferred tax assets and liabilities are presented in the Consolidated Condensed Balance Sheets as follows: | ||||||||
January 31, | October 31, | |||||||
2014 | 2013 | |||||||
In millions | ||||||||
Current deferred tax assets | $ | 3,362 | $ | 3,893 | ||||
Current deferred tax liabilities | (454 | ) | (375 | ) | ||||
Long-term deferred tax assets | 1,253 | 1,346 | ||||||
Long-term deferred tax liabilities | (2,131 | ) | (2,668 | ) | ||||
| | | | | | | | |
Net deferred tax position | $ | 2,030 | $ | 2,196 | ||||
| | | | | | | | |
| | | | | | | | |
Stockholders_Equity
Stockholders' Equity | 3 Months Ended | ||||||||||||||||
Jan. 31, 2014 | |||||||||||||||||
Stockholders' Equity | ' | ||||||||||||||||
Stockholders' Equity | ' | ||||||||||||||||
Note 13: Stockholders' Equity | |||||||||||||||||
Share Repurchase Program | |||||||||||||||||
HP's share repurchase program authorizes both open market and private repurchase transactions. In the three months ended January 31, 2014, HP executed share repurchases of 21 million shares, 20 million shares of which were settled for $565 million. HP had 1 million shares repurchased in the first quarter of fiscal 2014 that will be settled in the second quarter of fiscal 2014. HP paid $253 million in connection with repurchases of 19 million shares during the three months ended January 31, 2013. The shares repurchased and settled in the three months ended January 31, 2014 and 2013 were all open market transactions. As of January 31, 2014, HP had remaining authorization of $7.1 billion for future share repurchases. | |||||||||||||||||
Reclassifications and Taxes related to Items of Other Comprehensive Income (Loss) | |||||||||||||||||
Three months ended January 31 | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
In millions | |||||||||||||||||
Other comprehensive income (loss): | |||||||||||||||||
Net change in unrealized (losses) gains on available-for-sale securities: | |||||||||||||||||
Unrealized (losses) gains recognized in OCI, net of tax benefit of $1 million in 2014 and net of tax expense of $33 million in 2013 | $ | — | $ | (30 | ) | ||||||||||||
Reclassifications of (gains) losses into earnings, with no tax effect in 2014 and 2013 | (1 | ) | — | ||||||||||||||
| | | | | | | | ||||||||||
(1 | ) | (30 | ) | ||||||||||||||
| | | | | | | | ||||||||||
Net change in unrealized gains (losses) on cash flow hedges: | |||||||||||||||||
Unrealized gains (losses) recognized in OCI, net of tax expense of $40 million in 2014 and net of tax benefit of $102 million in 2013 | 30 | (212 | ) | ||||||||||||||
Reclassifications of losses (gains) into earnings, net of tax benefit of $34 million in 2014 and net of tax benefit of $17 million in 2013(1) | 75 | 47 | |||||||||||||||
| | | | | | | | ||||||||||
105 | (165 | ) | |||||||||||||||
| | | | | | | | ||||||||||
Net change in unrealized components of defined benefit plans(2): | |||||||||||||||||
Amortization of actuarial loss and prior service benefit, net of tax benefit of $12 million in 2014 and net of tax benefit of $5 million in 2013 | 51 | 78 | |||||||||||||||
Curtailments, settlements and other, with no tax effect in 2014 and net of tax of $1 million in 2013 | — | 12 | |||||||||||||||
| | | | | | | | ||||||||||
51 | 90 | ||||||||||||||||
| | | | | | | | ||||||||||
Net change in cumulative translation adjustment, net of tax expense of $20 million in 2014 and net of tax benefit of $18 million in 2013 | (44 | ) | (8 | ) | |||||||||||||
| | | | | | | | ||||||||||
Other comprehensive income (loss) | $ | 111 | $ | (113 | ) | ||||||||||||
| | | | | | | | ||||||||||
| | | | | | | | ||||||||||
-1 | |||||||||||||||||
Reclassification of pre-tax losses on cash flow hedges into the Consolidated Condensed Statements of Earnings was as follows: | |||||||||||||||||
Three months ended January 31 | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
In millions | |||||||||||||||||
Net revenue | 63 | 57 | |||||||||||||||
Cost of products | 23 | 3 | |||||||||||||||
Other operating expenses | 4 | (1 | ) | ||||||||||||||
Interest and other, net | 19 | 5 | |||||||||||||||
-2 | |||||||||||||||||
These components are included in the computation of net pension and post-retirement benefit (credit) cost in Note 14. | |||||||||||||||||
The components of accumulated other comprehensive loss, net of taxes as of January 31, 2014, and changes during the three months ended January 31, 2014 were as follows: | |||||||||||||||||
Net | Net | Unrealized | Cumulative | Accumulated | |||||||||||||
unrealized | unrealized | components | translation | other | |||||||||||||
gain on | loss on | of defined | adjustment | comprehensive | |||||||||||||
available- | cash flow | benefit plans | loss | ||||||||||||||
for-sale | hedges | ||||||||||||||||
securities | |||||||||||||||||
In millions | |||||||||||||||||
Balance at beginning of period | $ | 76 | $ | (188 | ) | $ | (3,084 | ) | $ | (582 | ) | $ | (3,778 | ) | |||
Other comprehensive income (loss) before reclassifications | — | 30 | — | (44 | ) | (14 | ) | ||||||||||
Amounts reclassified from accumulated other comprehensive income | (1 | ) | 75 | 51 | — | 125 | |||||||||||
| | | | | | | | | | | | | | | | | |
Balance at end of period | $ | 75 | $ | (83 | ) | $ | (3,033 | ) | $ | (626 | ) | $ | (3,667 | ) | |||
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Retirement_and_PostRetirement_
Retirement and Post-Retirement Benefit Plans | 3 Months Ended | |||||||||||||||||||
Jan. 31, 2014 | ||||||||||||||||||||
Retirement and Post-Retirement Benefit Plans | ' | |||||||||||||||||||
Retirement and Post-Retirement Benefit Plans | ' | |||||||||||||||||||
Note 14: Retirement and Post-Retirement Benefit Plans | ||||||||||||||||||||
HP's net pension and post-retirement benefit (credit) costs were as follows: | ||||||||||||||||||||
Three months ended January 31 | ||||||||||||||||||||
U.S. | Non-U.S. | Post- | ||||||||||||||||||
Defined | Defined | Retirement | ||||||||||||||||||
Benefit Plans | Benefit Plans | Benefit Plans | ||||||||||||||||||
2014 | 2013 | 2014 | 2013 | 2014 | 2013 | |||||||||||||||
In millions | ||||||||||||||||||||
Service cost | $ | — | $ | — | $ | 78 | $ | 86 | $ | 1 | $ | 2 | ||||||||
Interest cost | 142 | 140 | 183 | 172 | 8 | 8 | ||||||||||||||
Expected return on plan assets | (203 | ) | (211 | ) | (282 | ) | (257 | ) | (8 | ) | (8 | ) | ||||||||
Amortization and deferrals: | ||||||||||||||||||||
Actuarial loss (gain) | 4 | 20 | 78 | 87 | (3 | ) | — | |||||||||||||
Prior service benefit | — | — | (6 | ) | (7 | ) | (10 | ) | (17 | ) | ||||||||||
| | | | | | | | | | | | | | | | | | | | |
Net periodic benefit (credit) cost | $ | (57 | ) | $ | (51 | ) | $ | 51 | $ | 81 | $ | (12 | ) | $ | (15 | ) | ||||
Curtailment gain | — | — | — | — | — | (3 | ) | |||||||||||||
Settlement loss | — | 5 | — | — | — | — | ||||||||||||||
Special termination benefits | — | — | 6 | 3 | (11 | ) | — | |||||||||||||
| | | | | | | | | | | | | | | | | | | | |
Net benefit (credit) cost | $ | (57 | ) | $ | (46 | ) | $ | 57 | $ | 84 | $ | (23 | ) | $ | (18 | ) | ||||
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
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. | ||||||||||||||||||||
HP previously disclosed in its Consolidated Financial Statements for the fiscal year ended October 31, 2013 that it expected to contribute in fiscal 2014 approximately $617 million to its non-U.S. pension plans and expected to pay approximately $33 million to cover benefit payments to U.S. non-qualified plan participants. HP expected to pay approximately $109 million to cover benefit claims for HP's post-retirement benefit plans. | ||||||||||||||||||||
During the three months ended January 31, 2014, HP contributed $72 million to its non-U.S. pension plans, paid $6 million to cover benefit payments to U.S. non-qualified plan participants, and paid $26 million to cover benefit claims under HP's post-retirement benefit plans. During the remainder of fiscal 2014, HP anticipates making additional contributions of approximately $545 million to its non-U.S. pension plans and approximately $27 million to its U.S. non-qualified plan participants and expects to pay approximately $83 million to cover benefit claims under HP's post-retirement benefit plans. | ||||||||||||||||||||
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. | ||||||||||||||||||||
Litigation_and_Contingencies
Litigation and Contingencies | 3 Months Ended |
Jan. 31, 2014 | |
Litigation and Contingencies | ' |
Litigation and Contingencies | ' |
Note 15: Litigation and Contingencies | |
HP is involved in lawsuits, claims, investigations and proceedings, including those identified below, consisting of intellectual property, 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 January 31, 2014, 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. 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. As described below, proceedings are ongoing or have been concluded involving HP in certain European Union ("EU") member countries, including litigation in Germany, Belgium and Austria, seeking to impose or modify levies upon equipment (such as multifunction devices ("MFDs"), personal computers ("PCs") and printers) and alleging that these devices enable producing private copies of copyrighted materials. Descriptions of some of the ongoing proceedings are included below. The levies are generally based upon the number of products sold and the per-product amounts of the levies, which vary. Some EU member 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 some other EU member 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. | |
VerwertungsGesellschaft Wort ("VG Wort"), a collection agency representing certain copyright holders, instituted legal proceedings against HP in the Stuttgart Civil Court seeking to impose levies on printers. On December 22, 2004, the court held that HP is liable for payments regarding all printers using ASCII code sold in Germany but did not determine the amount payable per unit. HP appealed this decision in January 2005 to the Stuttgart Court of Appeals. On May 11, 2005, the Stuttgart Court of Appeals issued a decision confirming that levies are due. On June 6, 2005, HP filed an appeal to the German Federal Supreme Court in Karlsruhe. On December 6, 2007, the German Federal Supreme Court issued a judgment that printers are not subject to levies under existing law. VG Wort appealed the decision by filing a claim with the German Federal Constitutional Court challenging the ruling that printers are not subject to levies. On September 21, 2010, the Constitutional Court published a decision holding that the German Federal Supreme Court erred by not referring questions on interpretation of German copyright law to the Court of Justice of the European Union ("CJEU") and therefore revoked the German Federal Supreme Court decision and remitted the matter to it. On July 21, 2011, the German Federal Supreme Court stayed the proceedings and referred several questions to the CJEU with regard to the interpretation of the European Copyright Directive. On June 27, 2013, the CJEU issued its decision responding to those questions. The German Federal Supreme Court subsequently scheduled a joint hearing on this matter with other cases relating to reprographic levies on printers and PCs that was held on October 31, 2013. The German Federal Supreme Court adopted a decision on January 22, 2014 reopening the oral hearing and scheduling a new hearing for April 30, 2014. | |
In September 2003, VG Wort filed a lawsuit against Fujitsu Technology Solutions GmbH ("Fujitsu") in the Munich Civil Court in Munich, Germany seeking to impose levies on PCs. This is an industry test case in Germany, and HP has agreed not to object to the delay if VG Wort sues HP for such levies on PCs following a final decision against Fujitsu. On December 23, 2004, the Munich Civil Court held that PCs are subject to a levy and that Fujitsu must pay €12 plus compound interest for each PC sold in Germany since March 2001. Fujitsu appealed this decision in January 2005 to the Munich Court of Appeals. On December 15, 2005, the Munich Court of Appeals affirmed the Munich Civil Court decision. Fujitsu filed an appeal with the German Federal Supreme Court in February 2006. On October 2, 2008, the German Federal Supreme Court issued a judgment that PCs were not photocopiers within the meaning of the German copyright law that was in effect until December 31, 2007 and, therefore, were not subject to the levies on photocopiers established by that law. VG Wort subsequently filed a claim with the German Federal Constitutional Court challenging that ruling. In January 2011, the Constitutional Court published a decision holding that the German Federal Supreme Court decision was inconsistent with the German Constitution and revoking the German Federal Supreme Court decision. The Constitutional Court also remitted the matter to the German Federal Supreme Court for further action. On July 21, 2011, the German Federal Supreme Court stayed the proceedings and referred several questions to the CJEU with regard to the interpretation of the European Copyright Directive. On June 27, 2013, the CJEU issued its decision responding to those questions. The German Federal Supreme Court subsequently scheduled a joint hearing on that matter with other cases relating to reprographic levies on printers that was held on October 31, 2013. The German Federal Supreme Court adopted a decision on January 22, 2014 reopening the oral hearing and scheduling a new hearing for April 30, 2014. | |
Reprobel, a cooperative society with the authority to collect and distribute the remuneration for reprography to Belgian copyright holders, requested by extra-judicial 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 French-speaking chambers of 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 copyright levies payable on such MFDs must be assessed based on the copying speed when operated in the normal print mode set by default in the device. On November 16, 2012, the court issued a decision holding that Belgium law is not in conformity with EU law in a number of respects and ordered that, by November 2013, Reprobel substantiate that the amounts claimed by Reprobel are commensurate with the harm resulting from legitimate copying under the reprographic exception. HP subsequently appealed that court decision to the Courts of Appeal in Brussels seeking to confirm that the Belgian law is not in conformity with EU law and that, if Belgian law is interpreted in a manner consistent with EU law, no payments by HP are required or, alternatively, the payments already made by HP are sufficient to comply with its obligations under Belgian law. On October 23, 2013, the Court of Appeal in Brussels stayed the proceedings and referred several questions to the CJEU relating to whether the Belgian reprographic copyright levies system is in conformity with EU law. | |
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 matters described above. However, the ultimate resolution of these matters and the associated financial impact on HP, including the number of units impacted and the amount of levies imposed, remains uncertain. | |
Fair Labor Standards Act Litigation. HP is involved in several lawsuits in which the plaintiffs are seeking unpaid overtime compensation and other damages based on allegations that various employees of EDS or HP have been misclassified as exempt employees under the Fair Labor Standards Act and/or in violation of the California Labor Code or other state laws. Those matters include the following: | |
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Cunningham and Cunningham, et al. v. Electronic Data Systems Corporation is a purported collective action filed on May 10, 2006 in the United States District Court for the Southern District of New York claiming that current and former EDS employees allegedly involved in installing and/or maintaining computer software and hardware were misclassified as exempt employees. Another purported collective action, Steavens, et al. v. Electronic Data Systems Corporation, which was filed on October 23, 2007, is also now pending in the same court alleging similar facts. The Steavens case has been consolidated for pretrial purposes with the Cunningham case. On December 14, 2010, the court granted conditional certification of a class consisting of employees in 20 legacy EDS job codes in the consolidated Cunningham and Steavens matter. Approximately 2,600 current and former EDS employees have filed consents to opt in to the litigation. Plaintiffs had alleged separate "opt-out" classes based on the overtime laws of the states of California, Washington, Massachusetts and New York, but plaintiffs have dismissed those claims. | |
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Salva v. Hewlett-Packard Company is a purported collective action filed on June 15, 2012 in the United States District Court for the Western District of New York alleging that certain information technology employees allegedly involved in installing and/or maintaining computer software and hardware were misclassified as exempt employees under the Fair Labor Standards Act. On August 31, 2012, HP filed its answer to plaintiffs' complaint and filed counterclaims against two of the three named plaintiffs. Also on August 31, 2012, HP filed a motion to transfer venue to the United States District Court for the Eastern District of Texas. A hearing on HP's motion to transfer venue was scheduled for November 21, 2012, but was postponed by the court. | |
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Karlbom, et al. v. Electronic Data Systems Corporation is a class action filed on March 16, 2009 in California Superior Court alleging facts similar to the Cunningham and Steavens matters. In March 2010, the court stayed the matter; that stay was lifted in October 2012. | |
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Blake, et al. v. Hewlett-Packard Company is a purported nationwide collective action filed on February 17, 2011 in the United States District Court for the Southern District of Texas claiming that a class of information technology support personnel were misclassified as exempt employees under the Fair Labor Standards Act. On February 10, 2012, plaintiffs filed a motion requesting that the court conditionally certify the case as a collective action. On July 11, 2013, the court denied plaintiffs' motion for conditional certification in its entirety. Only one opt-in plaintiff had joined the named plaintiff in the lawsuit at the time that the motion was filed. | |
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Benedict v. Hewlett-Packard Company is a purported collective action filed on January 10, 2013 in the United States District Court for the Northern District of California alleging that certain technical support employees allegedly involved in installing, maintaining and/or supporting computer software and/or hardware for HP were misclassified as exempt employees under the Fair Labor Standards Act. The plaintiff has also alleged that HP violated California law by, among other things, allegedly improperly classifying these employees as exempt. On September 20, 2013, the plaintiffs filed a motion for conditional class certification. On February 13, 2014, the court granted the plaintiff's motion for conditional class certification. | |
State of South Carolina Department of Social Services Contract Dispute. In October 2012, the State of South Carolina Department of Social Services and related government agencies ("SCDSS") filed a proceeding before South Carolina's Chief Procurement Officer ("CPO") against Hewlett-Packard State & Local Enterprise Services, Inc., a subsidiary of HP ("HPSLES"). The dispute arises from a contract between SCDSS and HPSLES for the design, implementation and maintenance of a Child Support Enforcement and a Family Court Case Management System (the "CFS System"). SCDSS seeks aggregate damages of approximately $275 million, a declaration that HPSLES is in material breach of the contract and, therefore, that termination of the contract for cause by SCDSS would be appropriate, and a declaration that HPSLES is required to perform certain additional disputed work that expands the scope of the original contract. In November 2012, HPSLES filed responsive pleadings asserting defenses and seeking payment of past-due invoices totaling more than $12 million. On July 10, 2013, SCDSS terminated the contract with HPSLES for cause, and, in its termination notice, SCDSS asserted that HPSLES is responsible for all future federal penalties until the CFS System achieves federal certification, sought an immediate order requiring HPSLES to transfer to SCDSS all work completed and in progress, and indicated that it intends to seek suspension and debarment of HPSLES from contracting with the State of South Carolina. HPSLES is disputing the termination as improper and defective. In addition, on August 9, 2013, HPSLES filed its own affirmative claim within the proceeding alleging that SCDSS materially breached the contract by its improper termination and that SCDSS was a primary and material cause of the project delays. On September 4, 2013, the CPO denied SCDSS's motion for injunctive relief seeking immediate transfer of the system assets to SCDSS and indicated that the CPO would address that request following a hearing on the merits. The hearing on the merits before the CPO concluded on February 25, 2014. Proposed orders are due to be submitted on March 26, 2014, and closing arguments are scheduled for April 30, 2014. | |
India Directorate of Revenue Intelligence Proceedings. On April 30 and May 10, 2010, the India Directorate of Revenue Intelligence (the "DRI") issued show cause notices to Hewlett-Packard India Sales Private Ltd ("HPI"), a subsidiary of HP, seven then-current HP employees and one former HP employee alleging that HP 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 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 products and spare parts and to not interrupt the transaction of business by HP in 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 HPI and the named individuals of approximately $386 million, of which HPI had already deposited $9 million. On December 11, 2012, HPI voluntarily deposited an additional $10 million in connection with the products-related show cause notice. | |
On April 20, 2012, the Commissioner issued an order on the parts-related show cause notice affirming certain duties and penalties against HPI and certain of the named individuals of approximately $17 million, of which HPI had already deposited $7 million. After the order, HPI deposited an additional $3 million in connection with the parts-related show cause notice so as to avoid certain penalties. | |
HPI 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 HPI to deposit an additional $24 million against the products order, which HPI deposited in March 2013. The Customs Tribunal did not order any additional deposit to be made under the parts order. In December 2013, HPI 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 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. A hearing has been set for June 10, 2014. | |
Russia GPO and Other FCPA Investigations. The German Public Prosecutor's Office ("German PPO") has been conducting an investigation into allegations that current and former employees of HP engaged in bribery, embezzlement and tax evasion relating to a transaction between Hewlett-Packard ISE GmbH in Germany, a former subsidiary of HP, and the General Prosecutor's Office of the Russian Federation. The approximately €35 million transaction, which was referred to as the Russia GPO deal, spanned the years 2001 to 2006 and was for the delivery and installation of an IT network. The German PPO has issued an indictment of four individuals, including one current and two former HP employees, on charges including bribery, breach of trust and tax evasion. The German PPO has also requested that HP be made an associated party to the case, and, if that request is granted, HP would participate in any portion of the court proceedings that could ultimately bear on the question of whether HP should be subject to potential disgorgement of profits based on the conduct of the indicted current and former employees. | |
The U.S. Department of Justice and the SEC have been conducting an investigation into the Russia GPO deal and potential violations of the Foreign Corrupt Practices Act ("FCPA"). These U.S. enforcement agencies, as well as the Polish Central Anti-Corruption Bureau, are also conducting investigations into potential FCPA violations by an employee of Hewlett-Packard Polska Sp. z o.o., an indirect subsidiary of HP, in connection with certain public-sector transactions in Poland. In addition, the same U.S. enforcement agencies are conducting investigations into certain other public-sector transactions in Russia, Poland, the Commonwealth of Independent States, and Mexico, among other countries. | |
HP is cooperating with these investigating agencies and is in advanced discussions with the U.S. enforcement agencies to resolve their investigations. | |
Under the FCPA, a person or an entity could be subject to fines, civil penalties of up to $725,000 per violation and equitable remedies, including disgorgement of profits, pre-judgment interest and other injunctive relief. In addition, criminal penalties could range from the greater of $25 million per violation or twice the gross pecuniary gain or loss from the violation. | |
ECT Proceedings. In January 2011, the postal service of Brazil, Empresa Brasileira de Correios e Telégrafos ("ECT"), notified an HP subsidiary in Brazil ("HP Brazil") that it had initiated administrative proceedings to consider whether to suspend HP Brazil's right to bid and contract with ECT related to alleged improprieties in the bidding and contracting processes whereby employees of HP Brazil and employees of several other companies allegedly coordinated their bids and fixed results for three ECT contracts in 2007 and 2008. In late July 2011, ECT notified HP Brazil it had decided to apply the penalties against HP Brazil and suspend HP Brazil's right to bid and contract with ECT for five years, based upon the evidence before it. In August 2011, HP Brazil appealed ECT's decision. In April 2013, ECT rejected HP Brazil's appeal, and the administrative proceedings were closed with the penalties against HP Brazil remaining in place. In parallel, in September 2011, HP Brazil filed a civil action against ECT seeking to have ETC's decision revoked. HP Brazil also requested an injunction suspending the application of the penalties until a final ruling on the merits of the case. The court of first instance has not issued a decision on the merits of the case, but it has denied HP Brazil's request for injunctive relief. HP Brazil appealed the denial of its request for injunctive relief to the intermediate appellate court, which issued a preliminary ruling denying the request for injunctive relief but reducing the length of the sanctions from five to two years. HP Brazil appealed that decision and, in December 2011, obtained a ruling staying enforcement of ECT's sanctions until a final ruling on the merits of the case. HP expects the court of first instance to issue a decision on the merits of the case before the end of the first six months of calendar year 2014 and any subsequent appeal on the merits to last several years. | |
Stockholder Litigation. As described below, HP is involved in various stockholder litigation matters commenced against certain current and former HP executive officers and/or certain current and former members of HP's Board of Directors in which the plaintiffs are seeking to recover damages related to HP's allegedly inflated stock price, certain compensation paid by HP to the defendants, other damages and/or injunctive relief: | |
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Saginaw Police & Fire Pension Fund v. Marc L. Andreessen, et al. is a lawsuit filed on October 19, 2010 in the United States District Court for the Northern District of California alleging, among other things, that the defendants breached their fiduciary duties and were unjustly enriched by consciously disregarding HP's alleged violations of the FCPA. On August 15, 2011, the defendants filed a motion to dismiss the lawsuit. On March 21, 2012, the court granted the defendants' motion to dismiss, and the court entered judgment in the defendants' favor and closed the case on May 29, 2012. On June 28, 2012, the plaintiff filed an appeal with the United States Court of Appeals for the Ninth Circuit. The appeal has been fully briefed. A new argument date has not yet been set. | |
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A.J. Copeland v. Raymond J. Lane, et al. ("Copeland I") is a lawsuit filed on March 7, 2011 in the United States District Court for the Northern District of California alleging, among other things, that the defendants breached their fiduciary duties and wasted corporate assets in connection with HP's alleged violations of the FCPA, HP's severance payments made to Mark Hurd (a former Chairman of HP's Board of Directors and HP's Chief Executive Officer), and HP's acquisition of 3PAR Inc. The lawsuit also alleges violations of Section 14(a) of the Securities Exchange Act of 1934 (the "Exchange Act") in connection with HP's 2010 and 2011 proxy statements. On February 8, 2012, the defendants filed a motion to dismiss the lawsuit. On October 10, 2012, the court granted the defendants' motion to dismiss with leave to file an amended complaint. On November 1, 2012, plaintiff filed an amended complaint adding an unjust enrichment claim and claims that the defendants violated Section 14(a) of the Exchange Act and breached their fiduciary duties in connection with HP's 2012 proxy statement. On December 13, 14 and 17, 2012, the defendants moved to dismiss the amended complaint. On December 28, 2012, plaintiff moved for leave to file a third amended complaint. On May 6, 2013, the court denied the motion for leave to amend, granted the motions to dismiss with prejudice and entered judgment in the defendants' favor. On May 31, 2013, plaintiff filed an appeal with the United States Court of Appeals for the Ninth Circuit. The appeal has been fully briefed. | |
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A.J. Copeland v. Léo Apotheker, et al. ("Copeland II") is a lawsuit filed on February 10, 2014 in the United States District Court for the Northern District of California alleging, among other things, that the defendants used their control over HP and its corporate suffrage process in effectuating, directly participating in and/or aiding and abetting violations of Section 14(a) of the Exchange Act and Rule 14a-9 promulgated thereunder, violations of Sections 10(b) and 20(a) of the Exchange Act and Rule 10b-5 promulgated thereunder. The complaint asserts claims for breach of fiduciary duty, waste of corporate assets, unjust enrichment, and breach of the duty of candor. The claims arise out of the circumstances at HP relating to its 2013 and 2014 proxy statements, the departure of Mr. Hurd as Chairman of HP's Board of Directors and HP's Chief Executive Officer, alleged violations of the FCPA, and HP's acquisition of 3PAR Inc. and Autonomy Corporation plc ("Autonomy"). On February 25, 2014, the court issued an order granting HP's administrative motion to relateCopeland II toCopeland I. | |
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Richard Gammel v. Hewlett-Packard Company, et al. is a putative securities class action filed on September 13, 2011 in the United States District Court for the Central District of California alleging, among other things, that from November 22, 2010 to August 18, 2011, the defendants violated Sections 10(b) and 20(a) of the Exchange Act by concealing material information and making false statements about HP's business model, the future of the webOS operating system, and HP's commitment to developing and integrating webOS products, including the TouchPad tablet PC. On April 11, 2012, the defendants filed a motion to dismiss the lawsuit. On September 4, 2012, the court granted the defendants' motion to dismiss and gave plaintiff 30 days to file an amended complaint. On October 19, 2012, plaintiff filed an amended complaint asserting the same causes of action but dropping one of the defendants and shortening the period that the alleged violations of the Exchange Act occurred to February 9, 2011 to August 18, 2011. On December 3, 2012, the defendants moved to dismiss the amended complaint. On May 8, 2013, the court granted the defendants' motion to dismiss in part and denied it in part. As a result of the court's ruling, the alleged class period in the action runs from June 1, 2011 to August 18, 2011. The parties commenced mediation before a private mediator on December 3, 2013. | |
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Ernesto Espinoza v. Léo Apotheker, et al. and Larry Salat v. Léo Apotheker, et al. are consolidated lawsuits filed on September 21, 2011 in the United States District Court for the Central District of California alleging, among other things, that the defendants violated Section 10(b) and 20(a) of the Exchange Act by concealing material information and making false statements about HP's business model and the future of webOS, the TouchPad and HP's PC business. The lawsuits also allege that the defendants breached their fiduciary duties, wasted corporate assets and were unjustly enriched when they authorized HP's repurchase of its own stock on August 29, 2010 and July 21, 2011. These lawsuits were previously stayed pending developments in the Gammel matter, but those stays have been lifted. The plaintiffs filed an amended consolidated complaint on August 21, 2013, and, on October 28, 2013, the defendants filed a motion to stay these matters. In an order dated February 13, 2014, the court granted the motion to stay and set a conference for August 11, 2014. The court has scheduled a jury trial to begin on July 14, 2015. | |
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Luis Gonzalez v. Léo Apotheker, et al. and Richard Tyner v. Léo Apotheker, et al. are consolidated lawsuits filed on September 29, 2011 and October 5, 2011, respectively, in California Superior Court alleging, among other things, that the defendants breached their fiduciary duties, wasted corporate assets and were unjustly enriched by concealing material information and making false statements about HP's business model and the future of webOS, the TouchPad and HP's PC business and by authorizing HP's repurchase of its own stock on August 29, 2010 and July 21, 2011. The lawsuits are currently stayed pending resolution of the Espinoza/Salat consolidated action in federal court. The court has scheduled a status conference for March 17, 2014. | |
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Cement & Concrete Workers District Council Pension Fund v. Hewlett-Packard Company, et al. is a putative securities class action filed on August 3, 2012 in the United States District Court for the Northern District of California alleging, among other things, that from November 13, 2007 to August 6, 2010 the defendants violated Sections 10(b) and 20(a) of the Exchange Act by making statements regarding HP's Standards of Business Conduct ("SBC") that were false and misleading because Mr. Hurd, who was serving as HP's Chairman and Chief Executive Officer during that period, had been violating the SBC and concealing his misbehavior in a manner that jeopardized his continued employment with HP. On February 7, 2013, the defendants moved to dismiss the amended complaint. On August 9, 2013, the court granted the defendants' motion to dismiss with leave to amend the complaint by September 9, 2013. The plaintiffs filed an amended complaint on September 9, 2013, and the defendants moved to dismiss that complaint on October 24, 2013. A hearing on the defendants' motion to dismiss the amended complaint is scheduled for March 13, 2014. | |
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 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 November 21, 2012, representatives of the U.S. Department of Justice advised HP that they had opened an investigation relating to Autonomy. On February 6, 2013, representatives of the U.K. Serious Fraud Office advised HP that they had also opened an investigation relating to Autonomy. HP is cooperating with the three investigating agencies. | |
Litigation. As described below, HP is involved in various stockholder litigation relating to, among other things, its November 20, 2012 announcement that it recorded a non-cash charge for the impairment of goodwill and intangible assets within its Software segment of approximately $8.8 billion in the fourth quarter of its 2012 fiscal year and HP's statements that, based on HP's findings from an ongoing investigation, the majority of this impairment charge related to accounting improprieties, misrepresentations to the market and disclosure failures at Autonomy that occurred prior to and in connection with HP's acquisition of Autonomy and the impact of those improprieties, failures and misrepresentations on the expected future financial performance of the Autonomy business over the long term. This stockholder litigation was commenced against, among others, certain current and former HP executive officers, certain current and former members of HP's Board of Directors, and certain advisors to HP. The plaintiffs in these litigation matters are seeking to recover certain compensation paid by HP to the defendants and/or other damages. These matters include the following: | |
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In re HP Securities Litigation consists of two consolidated putative class actions filed on November 26 and 30, 2012 in the United States District Court for the Northern District of California alleging, among other things, that from August 19, 2011 to November 20, 2012, the defendants violated Sections 10(b) and 20(a) of the Exchange Act by concealing material information and making false statements related to HP's acquisition of Autonomy and the financial performance of HP's enterprise services business. On May 3, 2013, the lead plaintiff filed a consolidated complaint alleging that, during that same period, all of the defendants violated Sections 10(b) and 20(a) of the Exchange Act and SEC Rule 10b-5(b) by concealing material information and making false statements related to HP's acquisition of Autonomy and that certain defendants violated SEC Rule 10b-5(a) and (c) by engaging in a "scheme" to defraud investors. On July 2, 2013, HP filed a motion to dismiss the lawsuit. On November 26, 2013, the court granted in part and denied in part HP's motion to dismiss, allowing claims to proceed against HP and Margaret C. Whitman based on alleged statements and/or omissions made on or after May 23, 2012. The court dismissed all of the plaintiff's claims that were based on alleged statements and/or omissions made between August 19, 2011 and May 22, 2012. | |
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In re Hewlett-Packard Shareholder Derivative Litigation consists of seven consolidated lawsuits filed beginning on November 26, 2012 in the United States District Court for the Northern District of California alleging, among other things, that the defendants violated Sections 10(b) and 20(a) of the Exchange Act by concealing material information and making false statements related to HP's acquisition of Autonomy and the financial performance of HP's enterprise services business. The lawsuits also allege that the defendants breached their fiduciary duties, wasted corporate assets and were unjustly enriched in connection with HP's acquisition of Autonomy and by causing HP to repurchase its own stock at allegedly inflated prices between August 2011 and October 2012. One lawsuit further alleges that certain individual defendants engaged in or assisted insider trading and thereby breached their fiduciary duties, were unjustly enriched and violated Sections 25402 and 25403 of the California Corporations Code. On May 3, 2013, the lead plaintiff filed a consolidated complaint alleging, among other things, that the defendants concealed material information and made false statements related to HP's acquisition of Autonomy and Autonomy's IDOL technology and thereby violated Sections 10(b) and 20(a) of the Exchange Act, breached their fiduciary duties, engaged in "abuse of control" over HP and corporate waste and were unjustly enriched. The litigation was stayed by agreement until July 31, 2013. On July 30, 2013, HP filed a motion to further stay the litigation until HP's Board of Directors decides whether to pursue any of the claims asserted in the litigation or the court rules on HP's motion to dismiss the consolidated complaint in the In re HP Securities Litigation matter. The court extended the stay of the litigation until March 31, 2014. | |
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In re HP ERISA Litigation consists of three consolidated putative class actions filed beginning on December 6, 2012 in the United States District Court for the Northern District of California alleging, among other things, that from August 18, 2011 to November 22, 2012, the defendants breached their fiduciary obligations to HP's 401(k) Plan and its participants and thereby violated Sections 404(a)(1) and 405(a) of the Employee Retirement Income Security Act of 1974, as amended, by concealing negative information regarding the financial performance of Autonomy and HP's enterprise services business and by failing to restrict participants from investing in HP stock. On August 16, 2013, HP filed a motion to dismiss the lawsuit. The motion to dismiss was heard on February 28, 2014. | |
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Vincent Ho v. Margaret C. Whitman, et al. is a lawsuit filed on January 22, 2013 in California Superior Court alleging, among other things, that the defendants breached their fiduciary duties and wasted corporate assets in connection with HP's acquisition of Autonomy and by causing HP to repurchase its own stock at allegedly inflated prices between August 2011 and October 2012. On April 22, 2013, the court stayed the lawsuit pending resolution of the In re Hewlett-Packard Shareholder Derivative Litigation matter in federal court. Two additional derivative actions, James Gould v. Margaret C. Whitman, et al. and Leroy Noel v. Margaret C. Whitman, et al., were filed in California Superior Court on July 26, 2013 and August 16, 2013, respectively, containing substantially similar allegations and seeking substantially similar relief. Those actions also have been stayed pending resolution of the In re Hewlett-Packard Shareholder Derivative Litigation matter. | |
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 non-compliant 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. | |
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Note 16: Segment Information | ||||||||||||||||||||||||||
Description of Segments | ||||||||||||||||||||||||||
HP is a leading global provider of products, technologies, software, solutions and services to individual consumers, small- and medium-sized businesses ("SMBs"), and large enterprises, including customers in the government, health and education sectors. HP's offerings span personal computing and other access devices; imaging and printing-related products and services; multi-vendor customer services, including infrastructure technology and business process outsourcing, application development and support services, and consulting and integration services; enterprise information technology ("IT") infrastructure, including enterprise server and storage technology, networking products and solutions, and technology support and maintenance; and IT management software, information management solutions and security intelligence/risk management solutions. | ||||||||||||||||||||||||||
HP's operations are organized into seven reportable segments for financial reporting purposes: Personal Systems, Printing, the Enterprise Group, Enterprise Services, Software, HP Financial Services and Corporate Investments. HP's organizational structure is based on a number of factors that management uses to evaluate, view and run its business operations, which include, but are not limited to, customer base, homogeneity of products and technology. The reportable segments are based on this organizational structure and information reviewed by HP's management to evaluate segment results. | ||||||||||||||||||||||||||
The Personal Systems segment and the Printing segment are structured beneath a broader Printing and Personal Systems Group ("PPS"). While PPS is not a reportable segment, HP sometimes provides financial data aggregating the Personal Systems and the Printing segments within it in order to provide a supplementary view of its business. | ||||||||||||||||||||||||||
A description of the types of products and services provided by segment follows. | ||||||||||||||||||||||||||
The Printing and Personal Systems Group's mission is to leverage the respective strengths of the Personal Systems business and the Printing business by creating a unified business that is customer-focused and poised to capitalize on rapidly shifting industry trends. Each of the segments within PPS is described below. | ||||||||||||||||||||||||||
Personal Systems provides commercial personal computers ("PCs"), consumer PCs, workstations, thin clients, tablets, retail point-of-sale ("POS") systems, calculators and other related accessories, software, support and services for the commercial and consumer markets. HP groups commercial notebooks, commercial desktops, commercial tablets and workstations into commercial clients and consumer notebooks, consumer desktops and consumer tablets into consumer clients when describing its performance in these markets. Described below are HP's global business capabilities within Personal Systems. | ||||||||||||||||||||||||||
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Commercial PCs are optimized for use by commercial customers, including enterprise and SMB customers, and for connectivity, reliability and manageability in networked environments. Commercial PCs include the HP ProBook and HP EliteBook lines of notebooks; the HP Pro and HP Elite lines of business desktops and all-in-ones, retail POS systems, HP Thin Clients and HP ElitePad Tablet PCs. Commercial PCs also include Workstations that are designed and optimized to reliably operate in high performance and demanding application environments including Z desktop workstations, Z all-in-ones and Z mobile workstations. | ||||||||||||||||||||||||||
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Consumer PCs include the HP Spectre, HP ENVY, HP Pavilion, HP Chromebooks and HP Split series of multi-media consumer notebooks, consumer tablets, hybrids (detachable tablets), desktops, including the TouchSmart line of touch-enabled notebooks and all-in-one desktops. Consumer PCs also use the Compaq and Slate sub-brands for certain product offerings. | ||||||||||||||||||||||||||
Printing provides consumer and commercial printer hardware, supplies, media, software and services, as well as scanning devices. Printing is also focused on imaging solutions in the commercial markets. HP groups LaserJet, large format and Indigo printers into commercial hardware and inkjet printers into consumer hardware when describing our performance in these markets. Described below are HP's global business capabilities within Printing. | ||||||||||||||||||||||||||
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Inkjet and Printing Solutions delivers HP's consumer and SMB inkjet solutions (hardware, supplies, media, and web-connected hardware and services). It includes single-function and all-in-one inkjet printers. Ongoing initiatives and programs such as Ink in the Office and Ink Advantage and newer initiatives such as Instant Ink are meant to provide innovative printing solutions to consumers and SMBs and include HP's Officejet Premium and Officejet Pro inkjet product portfolios. | ||||||||||||||||||||||||||
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LaserJet and Enterprise Solutions delivers HP's commercial and laserjet products, services and solutions to SMB and enterprise segments, including LaserJet printers and supplies (toner), multi-function devices, scanners, web-connected hardware and managed services, and enterprise software solutions, such as Web Jetadmin. Our Managed Print Services business provides printing equipment, supplies, support, workflow optimization and security services for SMB and enterprise customers around the world, utilizing proprietary HP tools and fleet management solutions as well as third-party software. | ||||||||||||||||||||||||||
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Graphics Solutions offers large format printing (Designjet and Scitex) and supplies, Indigo digital presses and supplies, inkjet high-speed production solutions and supplies, specialty printing systems and graphics services. | ||||||||||||||||||||||||||
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Software and Web Services delivers a suite of offerings, including photo-storage and printing offerings (such as Snapfish), document storage, entertainment services, web-connected printing, and PC back-up and related services. | ||||||||||||||||||||||||||
The Enterprise Group provides servers, storage, networking and technology services that, when combined with HP's Cloud solutions, enable the customers to manage applications across public cloud, virtual private cloud, private cloud and traditional IT environments. Described below are HP's business units and capabilities within EG. | ||||||||||||||||||||||||||
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Industry Standard Servers offers ProLiant servers, running primarily Windows, Linux and virtualization platforms from software providers such as Microsoft Corporation and VMware, Inc. and open sourced software from other major vendors while leveraging x86 processors from Intel Corporation and Advanced Micro Devices, Inc. The business spans a range of server product lines, including microservers, towers, traditional rack, density-optimized rack and blades, as well as hyperscale solutions for large, distributed computing companies who buy and deploy nodes at a massive scale. The recently launched HP Moonshot servers, which operate on ARM-based, AMD-based and Intel® Atom™-based processors, offer reduced cost, space, energy and complexity compared to traditional servers. | ||||||||||||||||||||||||||
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Business Critical Systems offers HP Integrity servers based on the Intel® Itanium®-based processor, HP Integrity NonStop solutions and mission critical x86 ProLiant Servers. | ||||||||||||||||||||||||||
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Storage offers traditional storage and Converged Storage solutions. Traditional storage includes tape, storage networking and legacy external disk products such as EVA and XP. Converged Storage solutions include 3PAR StoreServ, StoreOnce, StoreVirtual, and StoreAll products. | ||||||||||||||||||||||||||
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Networking offers switches, routers, wireless local area network ("WLAN") and network management products that span the data center, campus and branch environments and deliver software-defined networking and unified communications capabilities. HP's unified wired and wireless networking offerings include both WLAN access points and controllers/switches. | ||||||||||||||||||||||||||
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Technology Services provides technology consulting and support service focused on cloud, mobility and big data and provides IT organizations with advice, design, implementation, migration and optimization of HP's Enterprise Group platforms: servers, storage, networking and converged infrastructure. Support services include Datacenter Care, Foundation Care, Proactive Care, Flexible Capacity services and Lifecycle Event services. These services are available in the form of service contracts, pre-packaged offerings or on a customized basis. | ||||||||||||||||||||||||||
Enterprise Services provides technology consulting, outsourcing and support services across infrastructure, applications and business process domains. ES is divided into Infrastructure Technology Outsourcing and Application and Business Services. | ||||||||||||||||||||||||||
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Infrastructure Technology Outsourcing delivers comprehensive services that encompass the management of data centers, IT security, cloud computing, workplace technology, network, unified communications, and enterprise service management. | ||||||||||||||||||||||||||
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Application and Business Services helps clients develop, revitalize and manage their applications and information assets. The portfolio also includes intellectual property-based industry solutions along with technologies and related services, all of which help clients better manage their critical business processes for customer relationship management, finance and administration, human resources, payroll and document processing. | ||||||||||||||||||||||||||
Software provides IT management, information management, big data and security solutions for businesses and enterprises of all sizes to help them navigate the new style of IT. HP's IT management solutions help customers deliver applications and services that perform to defined standards and automate and assure the underlying infrastructure, be it traditional, cloud or hybrid. HP's big data solutions include the HP HAVEn Big Data platform, which, together with the Autonomy, Vertica, and security products, is designed to help customers manage their structured and unstructured information securely. HP's security solutions provide security from the infrastructure through applications and information. | ||||||||||||||||||||||||||
HP's software offerings include licenses, support, professional services and Software-as-a-Service ("SaaS"). Described below are HP's global business capabilities within Software. | ||||||||||||||||||||||||||
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IT Operations Management, which is part of our IT Management offerings, provides software required to automate routine IT tasks and to pinpoint IT problems when they occur, helping enterprises to reduce operational costs and improve the reliability of applications running in a traditional, cloud or hybrid environment. | ||||||||||||||||||||||||||
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Application Delivery Management, which is part of our IT Management offerings, provides software that enables organizations to deliver high performance applications for the new style of IT by automating the processes required to ensure the quality and scalability of desktop, web, mobile and cloud-based applications. | ||||||||||||||||||||||||||
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Enterprise Security software is designed to disrupt fraud, hackers and cyber criminals by scanning software and websites for security vulnerabilities, improving network defenses and providing real-time warning of threats as they emerge. | ||||||||||||||||||||||||||
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HP Autonomy offers a wide-array of software that enable enterprises to monetize and protect their information such as video, audio and text documents through solutions for marketing optimization, information governance and e-discovery. | ||||||||||||||||||||||||||
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Vertica is HP's next-generation Big Data analytics software, designed to capture and analyze information at massive scale and speed while reducing costs by using open-system infrastructure. | ||||||||||||||||||||||||||
HP Financial Services acts as a strategic enabler for HP by providing financing for customers to purchase complete IT solutions, including hardware, software and services from HP. HPFS offers financial solutions to customers to manage to the lowest total cost of ownership—from planning and acquiring technology all the way to replacing or retiring it. HPFS offers leasing, financing, utility programs and asset management services for large enterprise customers. HPFS also helps customers to manage the risks of older or surplus IT equipment, which helps provide full life cycle coverage to HPFS customers. | ||||||||||||||||||||||||||
Corporate Investments includes HP Labs and certain business incubation projects. | ||||||||||||||||||||||||||
Segment Data | ||||||||||||||||||||||||||
HP derives the results of the business segments directly from its internal management reporting system. The accounting policies HP uses to derive segment results are substantially the same as those the consolidated company uses. Management measures the performance of each segment based on several metrics, including earnings from operations. Management uses these results, in part, to evaluate the performance of, and to assign resources to, each of the segments. | ||||||||||||||||||||||||||
Segment revenue includes revenues from sales to external customers and intersegment revenues that reflect transactions between the segments that are carried out at an arm's-length transfer price. Intersegment revenues primarily consist of sales of hardware and software that are sourced internally and, in the majority of the cases, are classified as operating leases within HPFS. HP's consolidated net revenue is derived and reported after the elimination of intersegment revenues from such arrangements in accordance with U.S. GAAP. | ||||||||||||||||||||||||||
Financing interest in the Consolidated Condensed Statements of Earnings reflects interest expense on debt attributable to HPFS. Debt attributable to HPFS consists of intercompany equity that is treated as debt for segment reporting purposes, intercompany debt and borrowing and funding-related activity associated with HPFS and its subsidiaries. | ||||||||||||||||||||||||||
HP does not allocate to its segments certain operating expenses, which it manages at the corporate level. These unallocated costs include certain corporate governance costs, stock-based compensation expense, amortization of intangible assets, restructuring charges and acquisition-related charges. | ||||||||||||||||||||||||||
Effective at the beginning of its first quarter of fiscal 2014, HP implemented certain organizational changes to align its segment financial reporting more closely with its current business structure. These organizational changes include: | ||||||||||||||||||||||||||
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transferring the HP Exstream business from the Commercial Hardware business unit within the Printing segment to the Software segment; | ||||||||||||||||||||||||||
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transferring the Personal Systems trade and warranty support business from the TS business unit within the EG segment to the Other business unit within the Personal Systems segment; | ||||||||||||||||||||||||||
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transferring the spare and replacement parts business supporting the Personal Systems and Printing segments from the TS business unit within the EG segment to the Other business unit within the Personal Systems segment and the Commercial Hardware business unit within the Printing segment, respectively; | ||||||||||||||||||||||||||
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transferring certain cloud-related incubation activities previously reported in Corporate and unallocated costs and eliminations and in the EG segment to the Corporate Investments segment. | ||||||||||||||||||||||||||
In addition, HP transferred certain intrasegment eliminations from the ES segment and the EG segment to corporate intersegment revenue eliminations. | ||||||||||||||||||||||||||
HP has reflected these changes to its segment information in prior periods on an as-if basis, which has resulted in the transfer of revenue among the Printing, Personal Systems, EG, ES and Software segments and the transfer of operating profit among the Printing, Personal Systems, EG, Software and Corporation Investments segments. These changes had no impact on the previously reported financial results for the HPFS segment. In addition, none of these changes impacted HP's previously reported consolidated net revenue, earnings from operations, net earnings or net earnings per share. The organizational changes did not have a material effect on segment assets. | ||||||||||||||||||||||||||
There have been no material changes to the total assets of HP's individual segments since October 31, 2013. | ||||||||||||||||||||||||||
Selected segment operating results were as follows: | ||||||||||||||||||||||||||
Personal Systems | ||||||||||||||||||||||||||
and Printing | ||||||||||||||||||||||||||
Personal | Printing | Enterprise | Enterprise | Software | HP | Corporate | Total | |||||||||||||||||||
Systems | Group | Services | Financial | Investments | ||||||||||||||||||||||
Services | ||||||||||||||||||||||||||
In millions | ||||||||||||||||||||||||||
Three months ended January 31, 2014 | ||||||||||||||||||||||||||
Net revenue | $ | 8,310 | $ | 5,782 | $ | 6,791 | $ | 5,283 | $ | 846 | $ | 854 | $ | 288 | $ | 28,154 | ||||||||||
Eliminations of intersegment net revenue and other | 220 | 33 | 202 | 312 | 70 | 16 | — | $ | 853 | |||||||||||||||||
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Total segment net revenue | $ | 8,530 | $ | 5,815 | $ | 6,993 | $ | 5,595 | $ | 916 | $ | 870 | $ | 288 | $ | 29,007 | ||||||||||
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Earnings from operations | $ | 279 | $ | 979 | $ | 1,006 | $ | 57 | $ | 145 | $ | 101 | $ | 121 | $ | 2,688 | ||||||||||
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Three months ended January 31, 2013 | ||||||||||||||||||||||||||
Net revenue | $ | 8,068 | $ | 5,904 | $ | 6,748 | $ | 5,792 | $ | 897 | $ | 946 | $ | 4 | $ | 28,359 | ||||||||||
Eliminations of intersegment net revenue and other | 164 | 42 | 200 | 246 | 54 | 11 | — | 717 | ||||||||||||||||||
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Total segment net revenue | $ | 8,232 | $ | 5,946 | $ | 6,948 | $ | 6,038 | $ | 951 | $ | 957 | $ | 4 | $ | 29,076 | ||||||||||
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Earnings (Loss) from operations | $ | 233 | $ | 967 | $ | 1,070 | $ | 76 | $ | 155 | $ | 101 | $ | (73 | ) | $ | 2,529 | |||||||||
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The reconciliation of segment operating results to HP consolidated results was as follows: | ||||||||||||||||||||||||||
Three months ended | ||||||||||||||||||||||||||
January 31 | ||||||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||||
In millions | ||||||||||||||||||||||||||
Net Revenue: | ||||||||||||||||||||||||||
Total segment | $ | 29,007 | $ | 29,076 | ||||||||||||||||||||||
Elimination of intersegment net revenue and other | (853 | ) | (717 | ) | ||||||||||||||||||||||
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Total HP consolidated | $ | 28,154 | $ | 28,359 | ||||||||||||||||||||||
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Earnings before taxes: | ||||||||||||||||||||||||||
Total segment earnings from operations | $ | 2,688 | $ | 2,529 | ||||||||||||||||||||||
Corporate and unallocated costs and eliminations | (121 | ) | (109 | ) | ||||||||||||||||||||||
Unallocated costs related to stock-based compensation | (170 | ) | (184 | ) | ||||||||||||||||||||||
Amortization of intangible assets | (283 | ) | (350 | ) | ||||||||||||||||||||||
Restructuring charges | (114 | ) | (130 | ) | ||||||||||||||||||||||
Acquisition-related charges | (3 | ) | (4 | ) | ||||||||||||||||||||||
Interest and other, net | (163 | ) | (179 | ) | ||||||||||||||||||||||
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Total HP consolidated | $ | 1,834 | $ | 1,573 | ||||||||||||||||||||||
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Net revenue by segment and business unit was as follows: | ||||||||||||||||||||||||||
Three months ended | ||||||||||||||||||||||||||
January 31 | ||||||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||||
In millions | ||||||||||||||||||||||||||
Notebooks | $ | 4,335 | $ | 4,128 | ||||||||||||||||||||||
Desktops | 3,274 | 3,321 | ||||||||||||||||||||||||
Workstations | 533 | 535 | ||||||||||||||||||||||||
Other | 388 | 248 | ||||||||||||||||||||||||
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Personal Systems | 8,530 | 8,232 | ||||||||||||||||||||||||
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Supplies | 3,795 | 3,893 | ||||||||||||||||||||||||
Commercial Hardware | 1,347 | 1,374 | ||||||||||||||||||||||||
Consumer Hardware | 673 | 679 | ||||||||||||||||||||||||
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Printing | 5,815 | 5,946 | ||||||||||||||||||||||||
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Total Personal Systems and Printing | 14,345 | 14,178 | ||||||||||||||||||||||||
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Industry Standard Servers | 3,178 | 2,994 | ||||||||||||||||||||||||
Technology Services | 2,123 | 2,207 | ||||||||||||||||||||||||
Storage | 834 | 833 | ||||||||||||||||||||||||
Networking | 630 | 608 | ||||||||||||||||||||||||
Business Critical Systems | 228 | 306 | ||||||||||||||||||||||||
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Enterprise Group | 6,993 | 6,948 | ||||||||||||||||||||||||
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Infrastructure Technology Outsourcing | 3,501 | 3,855 | ||||||||||||||||||||||||
Application and Business Services | 2,094 | 2,183 | ||||||||||||||||||||||||
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Enterprise Services | 5,595 | 6,038 | ||||||||||||||||||||||||
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Software | 916 | 951 | ||||||||||||||||||||||||
HP Financial Services | 870 | 957 | ||||||||||||||||||||||||
Corporate Investments | 288 | 4 | ||||||||||||||||||||||||
| | | | | | | | |||||||||||||||||||
Total segment net revenue | 29,007 | 29,076 | ||||||||||||||||||||||||
| | | | | | | | |||||||||||||||||||
Eliminations of intersegment net revenue and other | (853 | ) | (717 | ) | ||||||||||||||||||||||
| | | | | | | | |||||||||||||||||||
Total HP consolidated net revenue | $ | 28,154 | $ | 28,359 | ||||||||||||||||||||||
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Basis_of_Presentation_Policies
Basis of Presentation Policies (Policies) | 3 Months Ended |
Jan. 31, 2014 | |
Basis of Presentation | ' |
Principle of Consolidation Policy | ' |
The accompanying unaudited Consolidated Condensed Financial Statements include the accounts of HP and other subsidiaries and affiliates in which HP has a controlling financial interest. Non-controlling interests are presented as a separate component within Total stockholder's equity in the Consolidated Condensed Balance Sheets. Net earnings attributable to the non-controlling interests are eliminated within Interest and other, net in the Consolidated Condensed Statements of Earnings and are not presented separately as they were not material for any period presented. HP has eliminated all significant intercompany accounts and transactions. | |
Use of Estimates | ' |
Use of Estimates | |
The preparation of financial statements in accordance with U.S. generally accepted accounting principles ("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. | |
Segment Reorganization | ' |
Segment Reorganization | |
HP has implemented certain segment and business unit realignments in order to align its segment financial reporting more closely with its current business structure. Prior year segment and business unit financial information have been made to conform to the current-year presentation. None of the changes impacts HP's previously reported consolidated net revenue, earnings from operations, net earnings or net earnings per share. See Note 16 for a further discussion of HP's segment reorganization. | |
Accounting Pronouncements | ' |
Accounting Pronouncements | |
In July 2013, the Financial Accounting Standards Board ("FASB") issued a new accounting standard requiring the presentation of certain unrecognized tax benefits as reductions to deferred tax assets rather than as liabilities in the Consolidated Condensed Balance Sheets when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. HP will be required to adopt this new standard on a prospective basis in the first quarter of fiscal 2015; however, early adoption is permitted as is retrospective application. HP is currently evaluating the timing, transition method and impact of this new standard on its Consolidated Condensed Financial Statements. | |
Transfers and Servicing Trade Receivables Policy | ' |
HP has third-party financing arrangements consisting of revolving short-term financing intended to facilitate the working capital requirements of certain customers. These financing arrangements, which in one case provides for partial recourse, result in a transfer of HP's trade receivables and risk to the third party. As these transfers qualify for sales accounting treatment, the trade receivables are derecognized from the Consolidated Condensed Balance Sheets upon transfer, and HP receives a payment for the trade receivables from the third party within a mutually agreed upon time period. For the arrangement involving an element of recourse, the recourse obligation is measured using market data from similar transactions and reported as a current liability in the Consolidated Condensed Balance Sheets. | |
Fair Value Policy | ' |
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 | |
Valuation techniques used by HP are based upon observable and unobservable inputs. Observable or market inputs reflect market data obtained from independent sources, while unobservable inputs reflect HP's assumptions about market participant assumptions based on the best information available. 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 in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. | |
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. | |
Valuation Techniques | |
Cash Equivalents and Investments: HP holds time deposits, money market funds, mutual funds, other debt securities primarily consisting of corporate and foreign 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 instruments were based on quoted market prices or model driven valuations using inputs primarily derived from or corroborated by observable market data, and in certain instances internally developed valuation models that utilize assumptions which cannot be corroborated with observable market data. | |
Derivative Instruments: As discussed in Note 8, HP holds forwards, swaps and options to hedge certain foreign currency and interest rate exposures. When prices in active markets are not available for the identical asset or liability, 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. | |
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 upon 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. | |
Derivative Financial Instruments | ' |
Derivative Instruments | |
HP is a global company exposed to foreign currency exchange rate fluctuations and interest rate changes in the normal course of its business. As part of its risk management strategy, HP uses derivative instruments, primarily forward contracts, option contracts, interest rate swaps, and total return swaps, to hedge certain foreign currency, interest rate and, to a lesser extent, equity exposures. HP's objective is to offset gains and losses resulting from these exposures with losses and gains on the derivative contracts used to hedge them, thereby reducing volatility of earnings or protecting fair values of assets and liabilities. HP does not have any leveraged derivatives and does not use derivative contracts for speculative purposes. HP designates its derivatives as fair value hedges, cash flow hedges or hedges of the foreign currency exposure of a net investment in a foreign operation ("net investment hedges"). Additionally, for derivatives not designated as hedging instruments, HP categorizes those economic hedges as other derivatives. HP recognizes all derivative instruments at fair value in the Consolidated Condensed Balance Sheets. HP classifies cash flows from its derivative programs as operating activities in the Consolidated Condensed Statements of Cash Flows. | |
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. To mitigate counterparty credit risk, HP has a policy of only entering into contracts with carefully selected major financial institutions based upon their credit ratings and other factors, and HP maintains dollar risk limits that correspond to each institution's credit rating and other factors. HP's established policies and procedures for mitigating credit risk include reviewing and establishing limits for credit exposure and periodically re-assessing the creditworthiness of counterparties. Master netting agreements mitigate credit exposure to counterparties by permitting HP to net amounts due from HP to a counterparty against amounts due to HP from the same counterparty under certain conditions. | |
To further mitigate credit exposure to counterparties, HP has collateral security agreements that allow HP 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 on the derivatives' net liability position. Such funds are generally transferred within two business days of the due date. | |
Fair Value Hedges | |
HP issues long-term debt in U.S. dollars based on market conditions at the time of financing. HP may enter into fair value hedges, such as interest rate swaps, to reduce the exposure of its debt portfolio to interest rate risk and achieve a primarily U.S. dollar LIBOR-based floating interest expense. The swap transactions generally involve principal and interest obligations for U.S. dollar-denominated amounts. Alternatively, HP may choose not to swap fixed for floating interest payments or may terminate a previously executed swap if it believes a larger proportion of fixed-rate debt would be beneficial. | |
When investing in fixed-rate instruments, HP may enter into interest rate swaps that convert the fixed interest payments into variable interest payments and may designate these swaps as fair value hedges. | |
For derivative instruments that are designated and qualify as fair value hedges, HP recognizes the gain or loss on the derivative instrument, as well as the offsetting loss or gain on the hedged item, in Interest and other, net in the Consolidated Condensed Statements of Earnings in the period of change. | |
Cash Flow Hedges | |
HP uses a combination of forward contracts and options designated as cash flow hedges to protect against the foreign currency exchange rate risks inherent in its forecasted net revenue and, to a lesser extent, cost of sales, operating expenses, and intercompany loans denominated in currencies other than the U.S. dollar. HP's foreign currency cash flow hedges mature generally within twelve months; however, certain leasing revenue-related forward contracts and intercompany loan forward contracts extend for the duration of the lease or loan term, which can be up to five years. | |
For derivative instruments that are designated and qualify as cash flow hedges, HP initially records the effective portion of the gain or loss on the derivative instrument in Accumulated other comprehensive loss as a separate component of stockholders' equity in 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. During the three months ended January 31, 2014, HP did not discontinue any cash flow hedge for which it was probable that a forecasted transaction would not occur. During the three months ended January 31, 2013 there was no significant impact to results of operations as a result of discontinued cash flow hedges. | |
Net Investment Hedges | |
HP uses forward contracts designated as net investment hedges to hedge net investments in certain foreign subsidiaries whose functional currency is the local currency. These derivative instruments are designated as net investment hedges and, as such, HP records the effective portion of the gain or loss on the derivative instrument together with changes in the fair value of the hedged items in Cumulative translation adjustment as a separate component of stockholders' equity in the Consolidated Condensed Balance Sheets. | |
Other Derivatives | |
Other derivatives not designated as hedging instruments consist primarily of forward contracts HP uses to hedge foreign currency-denominated balance sheet exposures. HP also uses total return swaps and, to a lesser extent, interest rate swaps, based on equity or fixed income indices, to hedge its executive deferred compensation plan liability. | |
For derivative instruments not designated as hedging instruments, HP recognizes changes in fair value in earnings in the period of change. HP recognizes the gain or loss on foreign currency forward contracts used to hedge balance sheet exposures in Interest and other, net in the Consolidated Condensed Statements of Earnings in the same period as the remeasurement gain and loss of the related foreign currency-denominated assets and liabilities. HP recognizes the gain or loss on the total return swaps and interest rate swaps in Interest and other, net in the same period as the gain or loss from changes in the fair value of amounts owed to participants in the executive deferred compensation plan. | |
Hedge Effectiveness Policy | ' |
Hedge Effectiveness | |
For interest rate swaps designated as fair value hedges, HP measures effectiveness by offsetting the change in fair value of the hedged instrument with the change in fair value of the derivative. For foreign currency options and forward contracts designated as cash flow or net investment hedges, HP measures effectiveness by comparing the cumulative change in the hedge contract with the cumulative change in 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. | |
Receivables Financing Allowance and Reserves Policy | ' |
Allowance for Doubtful Accounts | |
The allowance for doubtful accounts for financing receivables is comprised of a general reserve and a specific reserve. HP maintains general reserve percentages on a regional basis and bases such percentages on several factors, including consideration of historical credit losses and portfolio delinquencies, trends in the overall weighted-average risk rating of the portfolio, current economic conditions and information derived from competitive benchmarking. HP excludes accounts evaluated as part of the specific reserve from the general reserve analysis. HP establishes a specific reserve for leases with identified exposures, such as customer defaults, bankruptcy or other events, that make it unlikely that HP will recover its investment in the lease. For individually evaluated receivables, HP determines the expected cash flow for the receivable, which includes consideration of estimated proceeds from disposition of the collateral, and calculates an estimate of the potential loss and the probability of loss. For those accounts where a loss is probable, HP records a specific reserve. HP generally records a write-off or specific reserve when an account reaches 180 days past due, or sooner if HP determines that the account is not collectible. | |
Financing Receivables, Non-Accrual and Past Due Status Policy | ' |
Non-Accrual and Past-Due Financing Receivables | |
HP considers a financing receivable to be past due when the minimum payment is not received by the contractually specified due date. HP generally places financing receivables on non-accrual status (suspension of interest accrual) and considers such receivables to be non-performing at the earlier of the time at which full payment of principal and interest becomes doubtful or the receivable becomes contractually 90 days past due. Subsequently, HP may recognize revenue on non-accrual financing receivables as payments are received (i.e., on a cash basis) if HP deems the recorded financing receivable to be fully collectible; however, if there is doubt regarding the ultimate collectability of the recorded financing receivable, HP applies all cash receipts to reduce the carrying amount of the financing receivable (i.e., the cost recovery method). In certain circumstances, such as when HP deems a delinquency to be of an administrative nature, financing receivables may accrue interest after they reach 90 days past due. The non-accrual status of a financing receivable may not impact a customer's risk rating. After all of a customer's delinquent principal and interest balances are settled, HP may return the related financing receivable to accrual status. | |
Warranty Policy | ' |
Warranty | |
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, ongoing product failure rates, as well as specific product class failures outside of HP's baseline experience, affect the estimated warranty obligation. | |
Litigation and Contingencies Policy | ' |
HP is involved in lawsuits, claims, investigations and proceedings, including those identified below, consisting of intellectual property, 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 January 31, 2014, 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. 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. | |
Segment Reporting Policy | ' |
HP derives the results of the business segments directly from its internal management reporting system. The accounting policies HP uses to derive segment results are substantially the same as those the consolidated company uses. Management measures the performance of each segment based on several metrics, including earnings from operations. Management uses these results, in part, to evaluate the performance of, and to assign resources to, each of the segments. | |
Segment revenue includes revenues from sales to external customers and intersegment revenues that reflect transactions between the segments that are carried out at an arm's-length transfer price. Intersegment revenues primarily consist of sales of hardware and software that are sourced internally and, in the majority of the cases, are classified as operating leases within HPFS. HP's consolidated net revenue is derived and reported after the elimination of intersegment revenues from such arrangements in accordance with U.S. GAAP. | |
StockBased_Compensation_Tables
Stock-Based Compensation (Tables) | 3 Months Ended | |||||||||||||
Jan. 31, 2014 | ||||||||||||||
Share-based compensation | ' | |||||||||||||
Schedule of stock based compensation expense and the resulting tax benefits | ' | |||||||||||||
Three months | Three months | |||||||||||||
ended | ended | |||||||||||||
January 31, | January 31, | |||||||||||||
2014 | 2013 | |||||||||||||
In millions | ||||||||||||||
Stock-based compensation expense | $ | 170 | $ | 184 | ||||||||||
Income tax benefit | (53 | ) | (57 | ) | ||||||||||
| | | | | | | | |||||||
Stock-based compensation expense, net of tax | $ | 117 | $ | 127 | ||||||||||
| | | | | | | | |||||||
| | | | | | | | |||||||
Schedule of changes in non-vested restricted stock awards | ' | |||||||||||||
Three months ended | ||||||||||||||
January 31, 2014 | ||||||||||||||
Shares | Weighted- | |||||||||||||
Average | ||||||||||||||
Grant Date | ||||||||||||||
Fair Value | ||||||||||||||
Per Share | ||||||||||||||
In thousands | ||||||||||||||
Outstanding at beginning of period | 32,262 | $ | 21 | |||||||||||
Granted | 21,013 | $ | 27 | |||||||||||
Vested | (11,918 | ) | $ | 24 | ||||||||||
Forfeited | (557 | ) | $ | 21 | ||||||||||
| | | | | | | | |||||||
Outstanding at end of period | 40,800 | $ | 23 | |||||||||||
| | | | | | | | |||||||
| | | | | | | | |||||||
Stock Options | ' | |||||||||||||
Share-based compensation | ' | |||||||||||||
Schedule of weighted-average fair value and the assumptions used to measure fair value | ' | |||||||||||||
Three months | ||||||||||||||
ended | ||||||||||||||
January 31 | ||||||||||||||
2014 | 2013 | |||||||||||||
Weighted-average fair value of grants per option(1) | $ | 7.45 | $ | 4.01 | ||||||||||
Expected volatility(2) | 34 | % | 42 | % | ||||||||||
Risk-free interest rate(3) | 1.79 | % | 0.98 | % | ||||||||||
Expected dividend yield(4) | 2.15 | % | 3.77 | % | ||||||||||
Expected term in months(5) | 69 | 70 | ||||||||||||
-1 | ||||||||||||||
The fair value calculation was based on stock options granted during the period. | ||||||||||||||
-2 | ||||||||||||||
For the three months ended January 31, 2014, expected volatility for stock options subject to service-based vesting was determined using implied volatility from traded options on HP's stock whereas for performance-contingent stock options, expected volatility was determined using historical volatility. For the three months ended January 31, 2013, expected volatility for stock options subject to service-based vesting and performance-contingent stock options was determined using implied volatility from traded options on HP's stock. | ||||||||||||||
-3 | ||||||||||||||
The risk-free interest rate was determined using the yield on U.S. Treasury zero-coupon issues. | ||||||||||||||
-4 | ||||||||||||||
The expected dividend yield was determined using a constant dividend yield during the expected term of the option. | ||||||||||||||
-5 | ||||||||||||||
For stock options subject to service-based vesting, expected term was determined using historical exercise and post-vesting termination patterns; and for performance-contingent stock options, expected term represents an output from the lattice model. | ||||||||||||||
Schedule of changes in option awards outstanding | ' | |||||||||||||
Three months ended January 31, 2014 | ||||||||||||||
Shares | Weighted- | Weighted- | Aggregate | |||||||||||
Average | Average | Intrinsic | ||||||||||||
Exercise | Remaining | Value | ||||||||||||
Price | Contractual | |||||||||||||
Term | ||||||||||||||
In thousands | In years | In millions | ||||||||||||
Outstanding at beginning of period | 84,042 | $ | 27 | |||||||||||
Granted | 8,600 | $ | 27 | |||||||||||
Exercised | (2,240 | ) | $ | 17 | ||||||||||
Forfeited/cancelled/expired | (18,362 | ) | $ | 32 | ||||||||||
| | | | | | | | | | | | | | |
Outstanding at end of period | 72,040 | $ | 26 | 5 | $ | 481 | ||||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Vested and expected to vest at end of period | 66,593 | $ | 26 | 4.8 | $ | 432 | ||||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Exercisable at end of period | 34,307 | $ | 33 | 2.9 | $ | 138 | ||||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Net_Earnings_Per_Share_Tables
Net Earnings Per Share (Tables) | 3 Months Ended | |||||||
Jan. 31, 2014 | ||||||||
Net Earnings Per Share | ' | |||||||
Basic and diluted net EPS calculations | ' | |||||||
Three months | ||||||||
ended January 31 | ||||||||
2014 | 2013 | |||||||
In millions, except | ||||||||
per share amounts | ||||||||
Numerator: | ||||||||
Net earnings(1) | $ | 1,425 | $ | 1,232 | ||||
| | | | | | | | |
| | | | | | | | |
Denominator: | ||||||||
Weighted-average shares used to compute basic net EPS | 1,907 | 1,953 | ||||||
Dilutive effect of employee stock plans | 28 | 3 | ||||||
| | | | | | | | |
Weighted-average shares used to compute diluted net EPS | 1,935 | 1,956 | ||||||
| | | | | | | | |
| | | | | | | | |
Net earnings per share: | ||||||||
Basic | $ | 0.75 | $ | 0.63 | ||||
Diluted | $ | 0.74 | $ | 0.63 | ||||
-1 | ||||||||
Net earnings available to participating securities were not significant for the three months ended January 31, 2014 and 2013. HP considers restricted stock that provides the holder with a non-forfeitable right to receive dividends to be a participating security. | ||||||||
Balance_Sheet_Details_Tables
Balance Sheet Details (Tables) | 3 Months Ended | |||||||
Jan. 31, 2014 | ||||||||
Balance Sheet Details | ' | |||||||
Accounts Receivable, Net | ' | |||||||
January 31, | October 31, | |||||||
2014 | 2013 | |||||||
In millions | ||||||||
Accounts receivable | $ | 13,760 | $ | 16,208 | ||||
Allowance for doubtful accounts | (268 | ) | (332 | ) | ||||
| | | | | | | | |
$ | 13,492 | $ | 15,876 | |||||
| | | | | | | | |
| | | | | | | | |
Schedule of allowance for doubtful accounts - accounts receivable | ' | |||||||
Three months ended | ||||||||
January 31, 2014 | ||||||||
In millions | ||||||||
Allowance for doubtful accounts—accounts receivable: | ||||||||
Balance at beginning of period | $ | 332 | ||||||
Provision for doubtful accounts | (11 | ) | ||||||
Deductions, net of recoveries | (53 | ) | ||||||
| | | | | ||||
Balance at end of period | $ | 268 | ||||||
| | | | | ||||
| | | | | ||||
Schedule of maximum program capacity and available program capacity under financing arrangements | ' | |||||||
January 31, | October 31, | |||||||
2014 | 2013 | |||||||
In millions | ||||||||
Non-recourse arrangements: | ||||||||
Aggregate maximum program capacity | $ | 759 | $ | 764 | ||||
Aggregate available capacity | $ | 451 | $ | 450 | ||||
Aggregate utilized capacity | $ | 308 | $ | 314 | ||||
Partial-recourse arrangement: | ||||||||
Maximum program capacity | $ | 637 | $ | 631 | ||||
Available capacity | $ | 172 | $ | 177 | ||||
Utilized capacity | $ | 465 | $ | 454 | ||||
Total arrangements: | ||||||||
Aggregate maximum program capacity | $ | 1,396 | $ | 1,395 | ||||
Aggregate available capacity | $ | 623 | $ | 627 | ||||
Aggregate utilized capacity | $ | 773 | $ | 768 | ||||
Inventory | ' | |||||||
January 31, | October 31, | |||||||
2014 | 2013 | |||||||
In millions | ||||||||
Finished goods | $ | 3,757 | $ | 3,847 | ||||
Purchased parts and fabricated assemblies | 2,247 | 2,199 | ||||||
| | | | | | | | |
$ | 6,004 | $ | 6,046 | |||||
| | | | | | | | |
| | | | | | | | |
Property, Plant and Equipment | ' | |||||||
January 31, | October 31, | |||||||
2014 | 2013 | |||||||
In millions | ||||||||
Land | $ | 553 | $ | 626 | ||||
Buildings and leasehold improvements | 8,876 | 8,942 | ||||||
Machinery and equipment, including equipment held for lease | 16,737 | 16,565 | ||||||
| | | | | | | | |
26,166 | 26,133 | |||||||
| | | | | | | | |
Accumulated depreciation | (14,907 | ) | (14,670 | ) | ||||
| | | | | | | | |
$ | 11,259 | $ | 11,463 | |||||
| | | | | | | | |
| | | | | | | | |
Goodwill_and_Intangible_Assets1
Goodwill and Intangible Assets (Tables) | 3 Months Ended | |||||||||||||||||||||||||
Jan. 31, 2014 | ||||||||||||||||||||||||||
Goodwill and Intangible Assets | ' | |||||||||||||||||||||||||
Goodwill | ' | |||||||||||||||||||||||||
Goodwill allocated to HP's reportable segments as of January 31, 2014 and changes in the carrying amount of goodwill during the three months ended January 31, 2014 are as follows: | ||||||||||||||||||||||||||
Personal | Printing | Enterprise | Enterprise | Software | HP | Corporate | Total | |||||||||||||||||||
Systems | Group | Services(2) | Financial | Investments | ||||||||||||||||||||||
Services | ||||||||||||||||||||||||||
In millions | ||||||||||||||||||||||||||
Balance at beginning of period(1) | $ | 2,588 | $ | 2,591 | $ | 16,864 | $ | 97 | $ | 8,840 | $ | 144 | $ | — | $ | 31,124 | ||||||||||
Goodwill adjustments | — | — | 8 | (1 | ) | — | — | — | 7 | |||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Balance at end of period(1) | $ | 2,588 | $ | 2,591 | $ | 16,872 | $ | 96 | $ | 8,840 | $ | 144 | $ | — | $ | 31,131 | ||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
-1 | ||||||||||||||||||||||||||
Goodwill at January 31, 2014 and October 31, 2013 is net of accumulated impairment losses of $14,518 million. Of that amount, $7,961 million relates to the Enterprise Services ("ES") segment, $5,744 million relates to Software, and the remaining $813 million relates to Corporate Investments. | ||||||||||||||||||||||||||
-2 | ||||||||||||||||||||||||||
Goodwill at January 31, 2014 and October 31, 2013 relates to the MphasiS Limited reporting unit. | ||||||||||||||||||||||||||
Intangible Assets | ' | |||||||||||||||||||||||||
January 31, 2014 | October 31, 2013 | |||||||||||||||||||||||||
Gross | Accumulated | Accumulated | Net | Gross | Accumulated | Accumulated | Net | |||||||||||||||||||
Amortization | Impairment | Amortization | Impairment | |||||||||||||||||||||||
Loss | Loss | |||||||||||||||||||||||||
In millions | ||||||||||||||||||||||||||
Customer contracts, customer lists and distribution agreements | $ | 5,321 | $ | (2,847 | ) | $ | (856 | ) | $ | 1,618 | $ | 5,321 | $ | (2,709 | ) | $ | (856 | ) | $ | 1,756 | ||||||
Developed and core technology and patents | 5,265 | (2,089 | ) | (2,138 | ) | 1,038 | 5,331 | (1,966 | ) | (2,138 | ) | 1,227 | ||||||||||||||
Trade name and trade marks | 1,730 | (233 | ) | (1,336 | ) | 161 | 1,730 | (211 | ) | (1,336 | ) | 183 | ||||||||||||||
In-process research and development | 3 | — | — | 3 | 3 | — | — | 3 | ||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Total intangible assets | $ | 12,319 | $ | (5,169 | ) | $ | (4,330 | ) | $ | 2,820 | $ | 12,385 | $ | (4,886 | ) | $ | (4,330 | ) | $ | 3,169 | ||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Estimated future amortization expense related to finite-lived purchased intangible assets | ' | |||||||||||||||||||||||||
Estimated future amortization expense related to finite-lived intangible assets at January 31, 2014 is as follows: | ||||||||||||||||||||||||||
Fiscal year: | In millions | |||||||||||||||||||||||||
2014 (remaining 9 months) | $ | 715 | ||||||||||||||||||||||||
2015 | 864 | |||||||||||||||||||||||||
2016 | 645 | |||||||||||||||||||||||||
2017 | 237 | |||||||||||||||||||||||||
2018 | 145 | |||||||||||||||||||||||||
2019 | 110 | |||||||||||||||||||||||||
Thereafter | 101 | |||||||||||||||||||||||||
| | | | | ||||||||||||||||||||||
Total | $ | 2,817 | ||||||||||||||||||||||||
| | | | | ||||||||||||||||||||||
| | | | | ||||||||||||||||||||||
Restructuring_Charges_Tables
Restructuring Charges (Tables) | 3 Months Ended | ||||||||||||||||||||||
Jan. 31, 2014 | |||||||||||||||||||||||
Restructuring Charges | ' | ||||||||||||||||||||||
Summary of Restructuring Plans | ' | ||||||||||||||||||||||
As of January 31, | |||||||||||||||||||||||
Three months | 2014 | ||||||||||||||||||||||
ended | |||||||||||||||||||||||
January 31, | |||||||||||||||||||||||
2014 | |||||||||||||||||||||||
Balance, | Charges | Cash | Other | Balance, | Total | Total | |||||||||||||||||
October 31, | Payments | Adjustments | January 31, | Costs | Expected | ||||||||||||||||||
2013 | and Non-Cash | 2014 | Incurred | Costs to Be | |||||||||||||||||||
Settlements | to Date | Incurred | |||||||||||||||||||||
In millions | |||||||||||||||||||||||
Fiscal 2012 Plan: | |||||||||||||||||||||||
Severance and EER | $ | 945 | $ | 59 | $ | (333 | ) | $ | 4 | $ | 675 | $ | 3,095 | $ | 3,500 | ||||||||
Infrastructure and other | 40 | 56 | (35 | ) | — | 61 | 303 | 600 | |||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | |
Total 2012 Plan | 985 | 115 | (368 | ) | 4 | 736 | 3,398 | 4,100 | |||||||||||||||
Other Plans: | |||||||||||||||||||||||
Severance | 10 | — | (2 | ) | — | 8 | 2,629 | 2,629 | |||||||||||||||
Infrastructure | 122 | (1 | ) | (11 | ) | — | 110 | 1,438 | 1,443 | ||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | |
Total Other Plans | 132 | (1 | ) | (13 | ) | — | 118 | 4,067 | 4,072 | ||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | |
Total restructuring plans | $ | 1,117 | $ | 114 | $ | (381 | ) | $ | 4 | $ | 854 | $ | 7,465 | $ | 8,172 | ||||||||
| | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
Fair_Value_Tables
Fair Value (Tables) | 3 Months Ended | |||||||||||||||||||||||||
Jan. 31, 2014 | ||||||||||||||||||||||||||
Fair Value | ' | |||||||||||||||||||||||||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | ' | |||||||||||||||||||||||||
As of January 31, 2014 | As of October 31, 2013 | |||||||||||||||||||||||||
Fair Value | Fair Value | |||||||||||||||||||||||||
Measured Using | Total | Measured Using | Total | |||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Balance | Level 1 | Level 2 | Level 3 | Balance | |||||||||||||||||||
In millions | ||||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||
Time deposits | $ | — | $ | 3,385 | $ | — | $ | 3,385 | $ | — | $ | 2,221 | $ | — | $ | 2,221 | ||||||||||
Money market funds | 9,627 | — | — | 9,627 | 6,819 | — | — | 6,819 | ||||||||||||||||||
Mutual funds | — | 359 | — | 359 | — | 313 | — | 313 | ||||||||||||||||||
Marketable equity securities | 8 | 7 | — | 15 | 10 | 5 | — | 15 | ||||||||||||||||||
Foreign bonds | 9 | 385 | — | 394 | 9 | 387 | — | 396 | ||||||||||||||||||
Other debt securities | — | 2 | 46 | 48 | — | 2 | 47 | 49 | ||||||||||||||||||
Derivatives: | ||||||||||||||||||||||||||
Interest rate contracts | — | 141 | — | 141 | — | 156 | — | 156 | ||||||||||||||||||
Foreign exchange contracts | — | 556 | — | 556 | — | 284 | 3 | 287 | ||||||||||||||||||
Other derivatives | — | 3 | — | 3 | — | 9 | — | 9 | ||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Total assets | $ | 9,644 | $ | 4,838 | $ | 46 | $ | 14,528 | $ | 6,838 | $ | 3,377 | $ | 50 | $ | 10,265 | ||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Liabilities | ||||||||||||||||||||||||||
Derivatives: | ||||||||||||||||||||||||||
Interest rate contracts | $ | — | $ | 116 | $ | — | $ | 116 | $ | — | $ | 107 | $ | — | $ | 107 | ||||||||||
Foreign exchange contracts | — | 447 | 5 | 452 | — | 547 | 2 | 549 | ||||||||||||||||||
Other derivatives | — | 4 | — | 4 | — | — | — | — | ||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Total liabilities | $ | — | $ | 567 | $ | 5 | $ | 572 | $ | — | $ | 654 | $ | 2 | $ | 656 | ||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Financial_Instruments_Tables
Financial Instruments (Tables) | 3 Months Ended | |||||||||||||||||||||||||||||||
Jan. 31, 2014 | ||||||||||||||||||||||||||||||||
Financial Instruments | ' | |||||||||||||||||||||||||||||||
Schedule of cash equivalents and available-for-sale investments | ' | |||||||||||||||||||||||||||||||
January 31, 2014 | October 31, 2013 | |||||||||||||||||||||||||||||||
Cost | Gross | Gross | Fair | Cost | Gross | Gross | Fair | |||||||||||||||||||||||||
Unrealized | Unrealized | Value | Unrealized | Unrealized | Value | |||||||||||||||||||||||||||
Gain | Loss | Gain | Loss | |||||||||||||||||||||||||||||
In millions | ||||||||||||||||||||||||||||||||
Cash Equivalents | ||||||||||||||||||||||||||||||||
Time deposits | $ | 3,338 | $ | — | $ | — | $ | 3,338 | $ | 2,207 | $ | — | $ | — | $ | 2,207 | ||||||||||||||||
Money market funds | 9,627 | — | — | 9,627 | 6,819 | — | — | 6,819 | ||||||||||||||||||||||||
Mutual funds | 261 | — | — | 261 | 13 | — | — | 13 | ||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | |||||||
Total cash equivalents | 13,226 | — | — | 13,226 | 9,039 | — | — | 9,039 | ||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | |||||||
Available-for-Sale Investments | ||||||||||||||||||||||||||||||||
Debt securities: | ||||||||||||||||||||||||||||||||
Time deposits | 47 | — | — | 47 | 14 | — | — | 14 | ||||||||||||||||||||||||
Foreign bonds | 307 | 87 | — | 394 | 310 | 86 | — | 396 | ||||||||||||||||||||||||
Other debt securities | 63 | — | (15 | ) | 48 | 64 | — | (15 | ) | 49 | ||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | |||||||
Total debt securities | 417 | 87 | (15 | ) | 489 | 388 | 86 | (15 | ) | 459 | ||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | |||||||
Equity securities: | ||||||||||||||||||||||||||||||||
Mutual funds | 98 | — | — | 98 | 300 | — | — | 300 | ||||||||||||||||||||||||
Equity securities in public companies | 8 | 3 | — | 11 | 5 | 6 | — | 11 | ||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | |||||||
Total equity securities | 106 | 3 | — | 109 | 305 | 6 | — | 311 | ||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | |||||||
Total available-for-sale investments | 523 | 90 | (15 | ) | 598 | 693 | 92 | (15 | ) | 770 | ||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | |||||||
Total cash equivalents and available-for-sale investments | $ | 13,749 | $ | 90 | $ | (15 | ) | $ | 13,824 | $ | 9,732 | $ | 92 | $ | (15 | ) | $ | 9,809 | ||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | |||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | |||||||
Schedule of contractual maturities of short- and long-term investments in available-for-sale debt securities | ' | |||||||||||||||||||||||||||||||
January 31, | ||||||||||||||||||||||||||||||||
2014 | ||||||||||||||||||||||||||||||||
Cost | Fair | |||||||||||||||||||||||||||||||
Value | ||||||||||||||||||||||||||||||||
In millions | ||||||||||||||||||||||||||||||||
Due in one to five years | $ | 34 | $ | 34 | ||||||||||||||||||||||||||||
Due in more than five years | 383 | 455 | ||||||||||||||||||||||||||||||
| | | | | | | | |||||||||||||||||||||||||
$ | 417 | $ | 489 | |||||||||||||||||||||||||||||
| | | | | | | | |||||||||||||||||||||||||
| | | | | | | | |||||||||||||||||||||||||
Schedule of gross notional and fair value of derivative instruments in the Consolidated Condensed Balance Sheets | ' | |||||||||||||||||||||||||||||||
As of January 31, 2014 | As of October 31, 2013 | |||||||||||||||||||||||||||||||
Gross | Other | Long-Term | Other | Long-Term | Gross | Other | Long-Term | Other | Long-Term | |||||||||||||||||||||||
Notional(1) | Current | Financing | Accrued | Other | Notional(1) | Current | Financing | Accrued | Other | |||||||||||||||||||||||
Assets | Receivables | Liabilities | Liabilities | Assets | Receivables | Liabilities | Liabilities | |||||||||||||||||||||||||
and Other | and Other | |||||||||||||||||||||||||||||||
Assets | Assets | |||||||||||||||||||||||||||||||
In millions | ||||||||||||||||||||||||||||||||
Derivatives designated as hedging instruments | ||||||||||||||||||||||||||||||||
Fair value hedges: | ||||||||||||||||||||||||||||||||
Interest rate contracts | $ | 12,350 | $ | 14 | $ | 127 | $ | — | $ | 116 | $ | 11,100 | $ | 31 | $ | 125 | $ | — | $ | 107 | ||||||||||||
Cash flow hedges: | ||||||||||||||||||||||||||||||||
Foreign exchange contracts | 22,035 | 226 | 60 | 234 | 106 | 22,463 | 79 | 40 | 341 | 80 | ||||||||||||||||||||||
Net investment hedges: | ||||||||||||||||||||||||||||||||
Foreign exchange contracts | 1,957 | 60 | 67 | 7 | 9 | 1,920 | 30 | 40 | 20 | 12 | ||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total derivatives designated as hedging instruments | 36,342 | 300 | 254 | 241 | 231 | 35,483 | 140 | 205 | 361 | 199 | ||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Derivatives not designated as hedging instruments | ||||||||||||||||||||||||||||||||
Foreign exchange contracts | 12,652 | 98 | 45 | 64 | 32 | 16,048 | 72 | 26 | 76 | 20 | ||||||||||||||||||||||
Other derivatives | 310 | 2 | 1 | 4 | — | 344 | 8 | 1 | — | — | ||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total derivatives not designated as hedging instruments | 12,962 | 100 | 46 | 68 | 32 | 16,392 | 80 | 27 | 76 | 20 | ||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total derivatives | $ | 49,304 | $ | 400 | $ | 300 | $ | 309 | $ | 263 | $ | 51,875 | $ | 220 | $ | 232 | $ | 437 | $ | 219 | ||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
-1 | ||||||||||||||||||||||||||||||||
Represents the amount of contracts that were outstanding as of January 31, 2014 and October 31, 2013, respectively. | ||||||||||||||||||||||||||||||||
Schedule of information related to the potential effect of entity's master netting agreements and collateral security agreements | ' | |||||||||||||||||||||||||||||||
As of January 31, 2014 | ||||||||||||||||||||||||||||||||
In the Consolidated Condensed Balance Sheets | ||||||||||||||||||||||||||||||||
(i) | (ii) | (iii) =i)-(ii) | (iv) | (v) | (vi) =iii)-(iv)-(v) | |||||||||||||||||||||||||||
Gross Amounts Not Offset | ||||||||||||||||||||||||||||||||
Gross Amount | Gross Amount | Net Amount | Derivatives | Financial | Net Amount | |||||||||||||||||||||||||||
Recognized | Offset | Presented | Collateral | |||||||||||||||||||||||||||||
In millions | ||||||||||||||||||||||||||||||||
Derivative assets | $ | 700 | $ | — | $ | 700 | $ | 363 | $ | 180 | $ | 157 | ||||||||||||||||||||
Derivative liabilities | $ | 572 | $ | — | $ | 572 | $ | 363 | $ | 155 | -1 | $ | 54 | |||||||||||||||||||
-1 | ||||||||||||||||||||||||||||||||
Of the $155 million of collateral posted, $62 million was through re-use of counterparty cash collateral and $93 million was in cash. | ||||||||||||||||||||||||||||||||
As of October 31, 2013 | ||||||||||||||||||||||||||||||||
In the Consolidated Condensed Balance Sheets | ||||||||||||||||||||||||||||||||
(i) | (ii) | (iii) =i)-(ii) | (iv) | (v) | (vi) =iii)-(iv)-(v) | |||||||||||||||||||||||||||
Gross Amounts Not Offset | ||||||||||||||||||||||||||||||||
Gross Amount | Gross Amount | Net Amount | Derivatives | Financial | Net Amount | |||||||||||||||||||||||||||
Recognized | Offset | Presented | Collateral | |||||||||||||||||||||||||||||
In millions | ||||||||||||||||||||||||||||||||
Derivative assets | $ | 452 | $ | — | $ | 452 | $ | 372 | $ | 30 | $ | 50 | ||||||||||||||||||||
Derivative liabilities | $ | 656 | $ | — | $ | 656 | $ | 372 | $ | 283 | -1 | $ | 1 | |||||||||||||||||||
-1 | ||||||||||||||||||||||||||||||||
Of the $283 million of collateral posted, $30 million was through re-use of counterparty cash collateral and $253 million was in cash. | ||||||||||||||||||||||||||||||||
Schedule of pre-tax effect of derivative instruments and related hedged items in a fair value hedging relationship | ' | |||||||||||||||||||||||||||||||
Gain (Loss) Recognized in Earnings on Derivative and Related Hedged Item | ||||||||||||||||||||||||||||||||
Derivative Instrument | Location | Three | Hedged Item | Location | Three | |||||||||||||||||||||||||||
months | months | |||||||||||||||||||||||||||||||
ended | ended | |||||||||||||||||||||||||||||||
January 31, | January 31, | |||||||||||||||||||||||||||||||
2014 | 2014 | |||||||||||||||||||||||||||||||
In millions | In millions | |||||||||||||||||||||||||||||||
Interest rate contracts | Interest and other, net | $ | (24 | ) | Fixed-rate debt | Interest and other, net | $ | 24 | ||||||||||||||||||||||||
Gain (Loss) Recognized in Earnings on Derivative and Related Hedged Item | ||||||||||||||||||||||||||||||||
Derivative Instrument | Location | Three | Hedged Item | Location | Three | |||||||||||||||||||||||||||
months | months | |||||||||||||||||||||||||||||||
ended | ended | |||||||||||||||||||||||||||||||
January 31, | January 31, | |||||||||||||||||||||||||||||||
2013 | 2013 | |||||||||||||||||||||||||||||||
In millions | In millions | |||||||||||||||||||||||||||||||
Interest rate contracts | Interest and other, net | $ | (99 | ) | Fixed-rate debt | Interest and other, net | $ | 98 | ||||||||||||||||||||||||
Schedule of pre-tax effect of derivative instruments in cash flow and net investment hedging relationships | ' | |||||||||||||||||||||||||||||||
Gain (Loss) | Gain (Loss) Reclassified from | |||||||||||||||||||||||||||||||
Recognized in | Accumulated OCI into Earnings | |||||||||||||||||||||||||||||||
Other | (Effective Portion) | |||||||||||||||||||||||||||||||
Comprehensive | ||||||||||||||||||||||||||||||||
Income ("OCI") | ||||||||||||||||||||||||||||||||
on Derivatives | ||||||||||||||||||||||||||||||||
(Effective Portion) | ||||||||||||||||||||||||||||||||
Three months ended | Location | Three months | ||||||||||||||||||||||||||||||
January 31, 2014 | ended January 31, | |||||||||||||||||||||||||||||||
2014 | ||||||||||||||||||||||||||||||||
In millions | In millions | |||||||||||||||||||||||||||||||
Cash flow hedges: | ||||||||||||||||||||||||||||||||
Foreign exchange contracts | $ | 175 | Net revenue | $ | (63 | ) | ||||||||||||||||||||||||||
Foreign exchange contracts | (87 | ) | Cost of products | (23 | ) | |||||||||||||||||||||||||||
Foreign exchange contracts | — | Other operating expenses | (4 | ) | ||||||||||||||||||||||||||||
Foreign exchange contracts | (18 | ) | Interest and other, net | (19 | ) | |||||||||||||||||||||||||||
| | | | | | | | | | |||||||||||||||||||||||
Total cash flow hedges | $ | 70 | $ | (109 | ) | |||||||||||||||||||||||||||
| | | | | | | | | | |||||||||||||||||||||||
| | | | | | | | | | |||||||||||||||||||||||
Net investment hedges: | ||||||||||||||||||||||||||||||||
Foreign exchange contracts | $ | 66 | Interest and other, net | $ | — | |||||||||||||||||||||||||||
| | | | | | | | | | |||||||||||||||||||||||
| | | | | | | | | | |||||||||||||||||||||||
Gain (Loss) | Gain (Loss) Reclassified from | |||||||||||||||||||||||||||||||
Recognized in | Accumulated OCI into Earnings | |||||||||||||||||||||||||||||||
OCI on Derivatives | (Effective Portion) | |||||||||||||||||||||||||||||||
(Effective Portion) | ||||||||||||||||||||||||||||||||
Three months ended | Location | Three months | ||||||||||||||||||||||||||||||
January 31, 2013 | ended January 31, | |||||||||||||||||||||||||||||||
2013 | ||||||||||||||||||||||||||||||||
In millions | In millions | |||||||||||||||||||||||||||||||
Cash flow hedges: | ||||||||||||||||||||||||||||||||
Foreign exchange contracts | $ | (199 | ) | Net revenue | $ | (57 | ) | |||||||||||||||||||||||||
Foreign exchange contracts | (125 | ) | Cost of products | (3 | ) | |||||||||||||||||||||||||||
Foreign exchange contracts | 8 | Other operating expenses | 1 | |||||||||||||||||||||||||||||
Foreign exchange contracts | 2 | Interest and other, net | (5 | ) | ||||||||||||||||||||||||||||
| | | | | | | | | | |||||||||||||||||||||||
Total cash flow hedges | $ | (314 | ) | $ | (64 | ) | ||||||||||||||||||||||||||
| | | | | | | | | | |||||||||||||||||||||||
| | | | | | | | | | |||||||||||||||||||||||
Net investment hedges: | ||||||||||||||||||||||||||||||||
Foreign exchange contracts | $ | (15 | ) | Interest and other, net | $ | — | ||||||||||||||||||||||||||
| | | | | | | | | | |||||||||||||||||||||||
| | | | | | | | | | |||||||||||||||||||||||
Schedule of pre-tax effect of derivative instruments not designated as hedging instruments on the Consolidated Statements of Earnings | ' | |||||||||||||||||||||||||||||||
Gain (Loss) Recognized in Earnings on Derivatives | ||||||||||||||||||||||||||||||||
Location | Three months ended | |||||||||||||||||||||||||||||||
January 31, 2014 | ||||||||||||||||||||||||||||||||
In millions | ||||||||||||||||||||||||||||||||
Foreign exchange contracts | Interest and other, net | $ | 190 | |||||||||||||||||||||||||||||
Other derivatives | Interest and other, net | (10 | ) | |||||||||||||||||||||||||||||
Interest rate contracts | Interest and other, net | — | ||||||||||||||||||||||||||||||
| | | | | | | ||||||||||||||||||||||||||
Total | $ | 180 | ||||||||||||||||||||||||||||||
| | | | | | | ||||||||||||||||||||||||||
| | | | | | | ||||||||||||||||||||||||||
Gain (Loss) Recognized in Earnings on Derivatives | ||||||||||||||||||||||||||||||||
Location | Three months ended | |||||||||||||||||||||||||||||||
January 31, 2013 | ||||||||||||||||||||||||||||||||
In millions | ||||||||||||||||||||||||||||||||
Foreign exchange contracts | Interest and other, net | $ | (40 | ) | ||||||||||||||||||||||||||||
Other derivatives | Interest and other, net | 7 | ||||||||||||||||||||||||||||||
Interest rate contracts | Interest and other, net | 2 | ||||||||||||||||||||||||||||||
| | | | | | | ||||||||||||||||||||||||||
Total | $ | (31 | ) | |||||||||||||||||||||||||||||
| | | | | | | ||||||||||||||||||||||||||
| | | | | | | ||||||||||||||||||||||||||
Financing_Receivables_and_Oper1
Financing Receivables and Operating Leases (Tables) | 3 Months Ended | |||||||
Jan. 31, 2014 | ||||||||
Financing Receivables and Operating Leases | ' | |||||||
Components of financing receivables | ' | |||||||
January 31, | October 31, | |||||||
2014 | 2013 | |||||||
In millions | ||||||||
Minimum lease payments receivable | $ | 7,198 | $ | 7,505 | ||||
Unguaranteed residual value | 249 | 252 | ||||||
Unearned income | (597 | ) | (604 | ) | ||||
| | | | | | | | |
Financing receivables, gross | 6,850 | 7,153 | ||||||
Allowance for doubtful accounts | (132 | ) | (131 | ) | ||||
| | | | | | | | |
Financing receivables, net | 6,718 | 7,022 | ||||||
Less current portion | (3,054 | ) | (3,144 | ) | ||||
| | | | | | | | |
Amounts due after one year, net | $ | 3,664 | $ | 3,878 | ||||
| | | | | | | | |
| | | | | | | | |
Credit risk profile of gross financing receivables | ' | |||||||
January 31, | October 31, | |||||||
2014 | 2013 | |||||||
In millions | ||||||||
Risk Rating | ||||||||
Low | $ | 3,724 | $ | 3,948 | ||||
Moderate | 3,000 | 3,084 | ||||||
High | 126 | 121 | ||||||
| | | | | | | | |
Total | $ | 6,850 | $ | 7,153 | ||||
| | | | | | | | |
| | | | | | | | |
Schedule of changes in allowance for doubtful accounts for financing receivables | ' | |||||||
Three months ended | ||||||||
January 31, 2014 | ||||||||
In millions | ||||||||
Balance at beginning of period | $ | 131 | ||||||
Provision for doubtful accounts | 7 | |||||||
Deductions, net of recoveries | (6 | ) | ||||||
| | | | | ||||
Balance at end of period | $ | 132 | ||||||
| | | | | ||||
| | | | | ||||
Allowance and related gross financing receivables collectively and individually evaluated for loss | ' | |||||||
January 31, | October 31, | |||||||
2014 | 2013 | |||||||
In millions | ||||||||
Allowance for financing receivables collectively evaluated for loss | $ | 93 | $ | 95 | ||||
Allowance for financing receivables individually evaluated for loss | 39 | 36 | ||||||
| | | | | | | | |
Total | $ | 132 | $ | 131 | ||||
| | | | | | | | |
| | | | | | | | |
Gross financing receivables collectively evaluated for loss | $ | 6,510 | $ | 6,773 | ||||
Gross financing receivables individually evaluated for loss | 340 | 380 | ||||||
| | | | | | | | |
Total | $ | 6,850 | $ | 7,153 | ||||
| | | | | | | | |
| | | | | | | | |
Summary of the aging and non-accrual status of gross financing receivables | ' | |||||||
January 31, | October 31, | |||||||
2014 | 2013 | |||||||
In millions | ||||||||
Billed(1): | ||||||||
Current 1-30 days | $ | 242 | $ | 217 | ||||
Past due 31-60 days | 38 | 50 | ||||||
Past due 61-90 days | 24 | 15 | ||||||
Past due >90 days | 56 | 46 | ||||||
Unbilled sales-type and direct-financing lease receivables | 6,490 | 6,825 | ||||||
| | | | | | | | |
Total gross financing receivables | $ | 6,850 | $ | 7,153 | ||||
| | | | | | | | |
| | | | | | | | |
Gross financing receivables on non-accrual status(2) | $ | 191 | $ | 199 | ||||
| | | | | | | | |
| | | | | | | | |
Gross financing receivables 90 days past due and still accruing interest(2) | $ | 149 | $ | 181 | ||||
| | | | | | | | |
| | | | | | | | |
-1 | ||||||||
Includes billed operating lease receivables and billed sales-type and direct-financing lease receivables. | ||||||||
-2 | ||||||||
Includes billed operating lease receivables and billed and unbilled sales-type and direct-financing lease receivables. | ||||||||
Schedule of operating lease assets included in machinery and equipment | ' | |||||||
January 31, | October 31, | |||||||
2014 | 2013 | |||||||
In millions | ||||||||
Equipment leased to customers | $ | 3,751 | $ | 3,822 | ||||
Accumulated depreciation | (1,404 | ) | (1,452 | ) | ||||
| | | | | | | | |
Operating lease assets, net | $ | 2,347 | $ | 2,370 | ||||
| | | | | | | | |
| | | | | | | | |
Guarantees_Tables
Guarantees (Tables) | 3 Months Ended | ||||
Jan. 31, 2014 | |||||
Guarantees | ' | ||||
Changes in aggregate product warranty liabilities | ' | ||||
Three months ended | |||||
January 31, 2014 | |||||
In millions | |||||
Balance at beginning of period | $ | 2,031 | |||
Accruals for warranties issued | 447 | ||||
Adjustments related to pre-existing warranties (including changes in estimates) | 7 | ||||
Settlements made (in cash or in kind) | (481 | ) | |||
| | | | | |
Balance at end of period | $ | 2,004 | |||
| | | | | |
| | | | | |
Borrowings_Tables
Borrowings (Tables) | 3 Months Ended | |||||||||||||
Jan. 31, 2014 | ||||||||||||||
Borrowings | ' | |||||||||||||
Schedule of notes payable and short-term borrowings, including the current portion of long-term debt | ' | |||||||||||||
January 31, 2014 | October 31, 2013 | |||||||||||||
Amount | Weighted- | Amount | Weighted- | |||||||||||
Outstanding | Average | Outstanding | Average | |||||||||||
Interest | Interest | |||||||||||||
Rate | Rate | |||||||||||||
In millions | In millions | |||||||||||||
Current portion of long-term debt | $ | 5,882 | 2.7 | % | $ | 5,226 | 2.8 | % | ||||||
Commercial paper(1) | 308 | 0.4 | % | 327 | 0.4 | % | ||||||||
Notes payable to banks, lines of credit and other(1) | 431 | 3.7 | % | 426 | 1.7 | % | ||||||||
| | | | | | | | | | | | | | |
$ | 6,621 | $ | 5,979 | |||||||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
-1 | ||||||||||||||
Commercial paper includes $308 million and $327 million and Notes payable to banks, lines of credit and other includes $389 million and $368 million at January 31, 2014 and October 31, 2013, respectively, of borrowing and funding-related activity associated with HP Financial Services ("HPFS") and its subsidiaries. | ||||||||||||||
Schedule of long-term debt | ' | |||||||||||||
January 31, | October 31, | |||||||||||||
2014 | 2013 | |||||||||||||
In millions | ||||||||||||||
U.S. Dollar Global Notes | ||||||||||||||
2006 Shelf Registration Statement: | ||||||||||||||
$500 issued at discount to par at a price of 99.694% in February 2007 at 5.4%, due March 2017 | $ | 499 | $ | 499 | ||||||||||
$750 issued at discount to par at a price of 99.932% in March 2008 at 5.5%, due March 2018 | 750 | 750 | ||||||||||||
$2,000 issued at discount to par at a price of 99.561% in December 2008 at 6.125%, paid March 2014 | 2,000 | 1,999 | ||||||||||||
$1,500 issued at discount to par at a price of 99.993% in February 2009 at 4.75%, due June 2014 | 1,500 | 1,500 | ||||||||||||
2009 Shelf Registration Statement: | ||||||||||||||
$1,100 issued at discount to par at a price of 99.887% in September 2010 at 2.125%, due September 2015 | 1,100 | 1,100 | ||||||||||||
$650 issued at discount to par at a price of 99.911% in December 2010 at 2.2%, due December 2015 | 650 | 650 | ||||||||||||
$1,350 issued at discount to par at a price of 99.827% in December 2010 at 3.75%, due December 2020 | 1,349 | 1,349 | ||||||||||||
$500 issued at par in May 2011 at three-month USD LIBOR plus 0.4%, due May 2014 | 500 | 500 | ||||||||||||
$500 issued at discount to par at a price of 99.971% in May 2011 at 1.55%, due May 2014 | 500 | 500 | ||||||||||||
$1,000 issued at discount to par at a price of 99.958% in May 2011 at 2.65%, due June 2016 | 1,000 | 1,000 | ||||||||||||
$1,250 issued at discount to par at a price of 99.799% in May 2011 at 4.3%, due June 2021 | 1,248 | 1,248 | ||||||||||||
$750 issued at discount to par at a price of 99.977% in September 2011 at 2.35%, due March 2015 | 750 | 750 | ||||||||||||
$1,300 issued at discount to par at a price of 99.784% in September 2011 at 3.0%, due September 2016 | 1,298 | 1,298 | ||||||||||||
$1,000 issued at discount to par at a price of 99.816% in September 2011 at 4.375%, due September 2021 | 999 | 999 | ||||||||||||
$1,200 issued at discount to par at a price of 99.863% in September 2011 at 6.0%, due September 2041 | 1,198 | 1,198 | ||||||||||||
$350 issued at par in September 2011 at three-month USD LIBOR plus 1.55%, due September 2014 | 350 | 350 | ||||||||||||
$650 issued at discount to par at a price of 99.946% in December 2011 at 2.625%, due December 2014 | 650 | 650 | ||||||||||||
$850 issued at discount to par at a price of 99.790% in December 2011 at 3.3%, due December 2016 | 849 | 849 | ||||||||||||
$1,500 issued at discount to par at a price of 99.707% in December 2011 at 4.65%, due December 2021 | 1,496 | 1,496 | ||||||||||||
$1,500 issued at discount to par at a price of 99.985% in March 2012 at 2.6%, due September 2017 | 1,500 | 1,500 | ||||||||||||
$500 issued at discount to par at a price of 99.771% in March 2012 at 4.05%, due September 2022 | 499 | 499 | ||||||||||||
2012 Shelf Registration Statement: | ||||||||||||||
$750 issued at par in January 2014 at three-month USD LIBOR plus 0.94%, due January 2019 | 750 | — | ||||||||||||
$1,250 issued at discount to par at a price of 99.954% in January 2014 at 2.75%, due January 2019 | 1,249 | — | ||||||||||||
| | | | | | | | |||||||
22,684 | 20,684 | |||||||||||||
EDS Senior Notes | ||||||||||||||
$300 issued October 1999 at 7.45%, due October 2029 | 314 | 314 | ||||||||||||
Other, including capital lease obligations, at 0.00%-8.50%, due in calendar years 2014-2024(1) | 740 | 689 | ||||||||||||
Fair value adjustment related to hedged debt | 115 | 147 | ||||||||||||
Less: current portion | (5,882 | ) | (5,226 | ) | ||||||||||
| | | | | | | | |||||||
Total long-term debt | $ | 17,971 | $ | 16,608 | ||||||||||
| | | | | | | | |||||||
| | | | | | | | |||||||
-1 | ||||||||||||||
Other, including capital lease obligations includes $211 million and $244 million at January 31, 2014 and October 31, 2013, respectively, of borrowing and funding-related activity associated with HPFS and its subsidiaries that are collateralized by receivables and underlying assets associated with the related capital and operating leases. For both the periods presented, the carrying amount of the assets approximated the carrying amount of the borrowings. | ||||||||||||||
Schedule of interest expense on borrowings recognized in the Consolidated Condensed Statements of Earnings | ' | |||||||||||||
Three months | ||||||||||||||
ended | ||||||||||||||
January 31 | ||||||||||||||
Expense | Location | 2014 | 2013 | |||||||||||
In millions | ||||||||||||||
Financing interest | Financing interest | $ | 72 | $ | 80 | |||||||||
Interest expense | Interest and other, net | 99 | 122 | |||||||||||
| | | | | | | | | | |||||
Total interest expense | $ | 171 | $ | 202 | ||||||||||
| | | | | | | | | | |||||
| | | | | | | | | | |||||
Income_Taxes_Tables
Income Taxes (Tables) | 3 Months Ended | |||||||
Jan. 31, 2014 | ||||||||
Income Taxes | ' | |||||||
Schedule of current and long-term deferred tax assets and liabilities | ' | |||||||
January 31, | October 31, | |||||||
2014 | 2013 | |||||||
In millions | ||||||||
Current deferred tax assets | $ | 3,362 | $ | 3,893 | ||||
Current deferred tax liabilities | (454 | ) | (375 | ) | ||||
Long-term deferred tax assets | 1,253 | 1,346 | ||||||
Long-term deferred tax liabilities | (2,131 | ) | (2,668 | ) | ||||
| | | | | | | | |
Net deferred tax position | $ | 2,030 | $ | 2,196 | ||||
| | | | | | | | |
| | | | | | | | |
Stockholders_Equity_Tables
Stockholders' Equity (Tables) | 3 Months Ended | ||||||||||||||||
Jan. 31, 2014 | |||||||||||||||||
Stockholders' Equity | ' | ||||||||||||||||
Schedule of reclassifications and taxes related to items of other comprehensive income (loss) | ' | ||||||||||||||||
Three months ended January 31 | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
In millions | |||||||||||||||||
Other comprehensive income (loss): | |||||||||||||||||
Net change in unrealized (losses) gains on available-for-sale securities: | |||||||||||||||||
Unrealized (losses) gains recognized in OCI, net of tax benefit of $1 million in 2014 and net of tax expense of $33 million in 2013 | $ | — | $ | (30 | ) | ||||||||||||
Reclassifications of (gains) losses into earnings, with no tax effect in 2014 and 2013 | (1 | ) | — | ||||||||||||||
| | | | | | | | ||||||||||
(1 | ) | (30 | ) | ||||||||||||||
| | | | | | | | ||||||||||
Net change in unrealized gains (losses) on cash flow hedges: | |||||||||||||||||
Unrealized gains (losses) recognized in OCI, net of tax expense of $40 million in 2014 and net of tax benefit of $102 million in 2013 | 30 | (212 | ) | ||||||||||||||
Reclassifications of losses (gains) into earnings, net of tax benefit of $34 million in 2014 and net of tax benefit of $17 million in 2013(1) | 75 | 47 | |||||||||||||||
| | | | | | | | ||||||||||
105 | (165 | ) | |||||||||||||||
| | | | | | | | ||||||||||
Net change in unrealized components of defined benefit plans(2): | |||||||||||||||||
Amortization of actuarial loss and prior service benefit, net of tax benefit of $12 million in 2014 and net of tax benefit of $5 million in 2013 | 51 | 78 | |||||||||||||||
Curtailments, settlements and other, with no tax effect in 2014 and net of tax of $1 million in 2013 | — | 12 | |||||||||||||||
| | | | | | | | ||||||||||
51 | 90 | ||||||||||||||||
| | | | | | | | ||||||||||
Net change in cumulative translation adjustment, net of tax expense of $20 million in 2014 and net of tax benefit of $18 million in 2013 | (44 | ) | (8 | ) | |||||||||||||
| | | | | | | | ||||||||||
Other comprehensive income (loss) | $ | 111 | $ | (113 | ) | ||||||||||||
| | | | | | | | ||||||||||
| | | | | | | | ||||||||||
-1 | |||||||||||||||||
Reclassification of pre-tax losses on cash flow hedges into the Consolidated Condensed Statements of Earnings was as follows: | |||||||||||||||||
Three months ended January 31 | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
In millions | |||||||||||||||||
Net revenue | 63 | 57 | |||||||||||||||
Cost of products | 23 | 3 | |||||||||||||||
Other operating expenses | 4 | (1 | ) | ||||||||||||||
Interest and other, net | 19 | 5 | |||||||||||||||
-2 | |||||||||||||||||
These components are included in the computation of net pension and post-retirement benefit (credit) cost in Note 14. | |||||||||||||||||
Accumulated Other Comprehensive loss, net of taxes | ' | ||||||||||||||||
Net | Net | Unrealized | Cumulative | Accumulated | |||||||||||||
unrealized | unrealized | components | translation | other | |||||||||||||
gain on | loss on | of defined | adjustment | comprehensive | |||||||||||||
available- | cash flow | benefit plans | loss | ||||||||||||||
for-sale | hedges | ||||||||||||||||
securities | |||||||||||||||||
In millions | |||||||||||||||||
Balance at beginning of period | $ | 76 | $ | (188 | ) | $ | (3,084 | ) | $ | (582 | ) | $ | (3,778 | ) | |||
Other comprehensive income (loss) before reclassifications | — | 30 | — | (44 | ) | (14 | ) | ||||||||||
Amounts reclassified from accumulated other comprehensive income | (1 | ) | 75 | 51 | — | 125 | |||||||||||
| | | | | | | | | | | | | | | | | |
Balance at end of period | $ | 75 | $ | (83 | ) | $ | (3,033 | ) | $ | (626 | ) | $ | (3,667 | ) | |||
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Retirement_and_PostRetirement_1
Retirement and Post-Retirement Benefit Plans (Tables) | 3 Months Ended | |||||||||||||||||||
Jan. 31, 2014 | ||||||||||||||||||||
Retirement and Post-Retirement Benefit Plans | ' | |||||||||||||||||||
Schedule of net pension and post-retirement benefit (credit) costs | ' | |||||||||||||||||||
Three months ended January 31 | ||||||||||||||||||||
U.S. | Non-U.S. | Post- | ||||||||||||||||||
Defined | Defined | Retirement | ||||||||||||||||||
Benefit Plans | Benefit Plans | Benefit Plans | ||||||||||||||||||
2014 | 2013 | 2014 | 2013 | 2014 | 2013 | |||||||||||||||
In millions | ||||||||||||||||||||
Service cost | $ | — | $ | — | $ | 78 | $ | 86 | $ | 1 | $ | 2 | ||||||||
Interest cost | 142 | 140 | 183 | 172 | 8 | 8 | ||||||||||||||
Expected return on plan assets | (203 | ) | (211 | ) | (282 | ) | (257 | ) | (8 | ) | (8 | ) | ||||||||
Amortization and deferrals: | ||||||||||||||||||||
Actuarial loss (gain) | 4 | 20 | 78 | 87 | (3 | ) | — | |||||||||||||
Prior service benefit | — | — | (6 | ) | (7 | ) | (10 | ) | (17 | ) | ||||||||||
| | | | | | | | | | | | | | | | | | | | |
Net periodic benefit (credit) cost | $ | (57 | ) | $ | (51 | ) | $ | 51 | $ | 81 | $ | (12 | ) | $ | (15 | ) | ||||
Curtailment gain | — | — | — | — | — | (3 | ) | |||||||||||||
Settlement loss | — | 5 | — | — | — | — | ||||||||||||||
Special termination benefits | — | — | 6 | 3 | (11 | ) | — | |||||||||||||
| | | | | | | | | | | | | | | | | | | | |
Net benefit (credit) cost | $ | (57 | ) | $ | (46 | ) | $ | 57 | $ | 84 | $ | (23 | ) | $ | (18 | ) | ||||
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Segment_Information_Tables
Segment Information (Tables) | 3 Months Ended | |||||||||||||||||||||||||
Jan. 31, 2014 | ||||||||||||||||||||||||||
Segment Information | ' | |||||||||||||||||||||||||
Schedule of Revenue and Earnings (Loss) from Operations, by Segment | ' | |||||||||||||||||||||||||
Personal Systems | ||||||||||||||||||||||||||
and Printing | ||||||||||||||||||||||||||
Personal | Printing | Enterprise | Enterprise | Software | HP | Corporate | Total | |||||||||||||||||||
Systems | Group | Services | Financial | Investments | ||||||||||||||||||||||
Services | ||||||||||||||||||||||||||
In millions | ||||||||||||||||||||||||||
Three months ended January 31, 2014 | ||||||||||||||||||||||||||
Net revenue | $ | 8,310 | $ | 5,782 | $ | 6,791 | $ | 5,283 | $ | 846 | $ | 854 | $ | 288 | $ | 28,154 | ||||||||||
Eliminations of intersegment net revenue and other | 220 | 33 | 202 | 312 | 70 | 16 | — | $ | 853 | |||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Total segment net revenue | $ | 8,530 | $ | 5,815 | $ | 6,993 | $ | 5,595 | $ | 916 | $ | 870 | $ | 288 | $ | 29,007 | ||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Earnings from operations | $ | 279 | $ | 979 | $ | 1,006 | $ | 57 | $ | 145 | $ | 101 | $ | 121 | $ | 2,688 | ||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Three months ended January 31, 2013 | ||||||||||||||||||||||||||
Net revenue | $ | 8,068 | $ | 5,904 | $ | 6,748 | $ | 5,792 | $ | 897 | $ | 946 | $ | 4 | $ | 28,359 | ||||||||||
Eliminations of intersegment net revenue and other | 164 | 42 | 200 | 246 | 54 | 11 | — | 717 | ||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Total segment net revenue | $ | 8,232 | $ | 5,946 | $ | 6,948 | $ | 6,038 | $ | 951 | $ | 957 | $ | 4 | $ | 29,076 | ||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Earnings (Loss) from operations | $ | 233 | $ | 967 | $ | 1,070 | $ | 76 | $ | 155 | $ | 101 | $ | (73 | ) | $ | 2,529 | |||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Schedule of Reconciliation of Revenues and Earnings before Taxes from Segments to Consolidated | ' | |||||||||||||||||||||||||
Three months ended | ||||||||||||||||||||||||||
January 31 | ||||||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||||
In millions | ||||||||||||||||||||||||||
Net Revenue: | ||||||||||||||||||||||||||
Total segment | $ | 29,007 | $ | 29,076 | ||||||||||||||||||||||
Elimination of intersegment net revenue and other | (853 | ) | (717 | ) | ||||||||||||||||||||||
| | | | | | | | |||||||||||||||||||
Total HP consolidated | $ | 28,154 | $ | 28,359 | ||||||||||||||||||||||
| | | | | | | | |||||||||||||||||||
| | | | | | | | |||||||||||||||||||
Earnings before taxes: | ||||||||||||||||||||||||||
Total segment earnings from operations | $ | 2,688 | $ | 2,529 | ||||||||||||||||||||||
Corporate and unallocated costs and eliminations | (121 | ) | (109 | ) | ||||||||||||||||||||||
Unallocated costs related to stock-based compensation | (170 | ) | (184 | ) | ||||||||||||||||||||||
Amortization of intangible assets | (283 | ) | (350 | ) | ||||||||||||||||||||||
Restructuring charges | (114 | ) | (130 | ) | ||||||||||||||||||||||
Acquisition-related charges | (3 | ) | (4 | ) | ||||||||||||||||||||||
Interest and other, net | (163 | ) | (179 | ) | ||||||||||||||||||||||
| | | | | | | | |||||||||||||||||||
Total HP consolidated | $ | 1,834 | $ | 1,573 | ||||||||||||||||||||||
| | | | | | | | |||||||||||||||||||
| | | | | | | | |||||||||||||||||||
Schedule of Revenue by Segment and Business Unit | ' | |||||||||||||||||||||||||
Three months ended | ||||||||||||||||||||||||||
January 31 | ||||||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||||
In millions | ||||||||||||||||||||||||||
Notebooks | $ | 4,335 | $ | 4,128 | ||||||||||||||||||||||
Desktops | 3,274 | 3,321 | ||||||||||||||||||||||||
Workstations | 533 | 535 | ||||||||||||||||||||||||
Other | 388 | 248 | ||||||||||||||||||||||||
| | | | | | | | |||||||||||||||||||
Personal Systems | 8,530 | 8,232 | ||||||||||||||||||||||||
| | | | | | | | |||||||||||||||||||
Supplies | 3,795 | 3,893 | ||||||||||||||||||||||||
Commercial Hardware | 1,347 | 1,374 | ||||||||||||||||||||||||
Consumer Hardware | 673 | 679 | ||||||||||||||||||||||||
| | | | | | | | |||||||||||||||||||
Printing | 5,815 | 5,946 | ||||||||||||||||||||||||
| | | | | | | | |||||||||||||||||||
Total Personal Systems and Printing | 14,345 | 14,178 | ||||||||||||||||||||||||
| | | | | | | | |||||||||||||||||||
Industry Standard Servers | 3,178 | 2,994 | ||||||||||||||||||||||||
Technology Services | 2,123 | 2,207 | ||||||||||||||||||||||||
Storage | 834 | 833 | ||||||||||||||||||||||||
Networking | 630 | 608 | ||||||||||||||||||||||||
Business Critical Systems | 228 | 306 | ||||||||||||||||||||||||
| | | | | | | | |||||||||||||||||||
Enterprise Group | 6,993 | 6,948 | ||||||||||||||||||||||||
| | | | | | | | |||||||||||||||||||
Infrastructure Technology Outsourcing | 3,501 | 3,855 | ||||||||||||||||||||||||
Application and Business Services | 2,094 | 2,183 | ||||||||||||||||||||||||
| | | | | | | | |||||||||||||||||||
Enterprise Services | 5,595 | 6,038 | ||||||||||||||||||||||||
| | | | | | | | |||||||||||||||||||
Software | 916 | 951 | ||||||||||||||||||||||||
HP Financial Services | 870 | 957 | ||||||||||||||||||||||||
Corporate Investments | 288 | 4 | ||||||||||||||||||||||||
| | | | | | | | |||||||||||||||||||
Total segment net revenue | 29,007 | 29,076 | ||||||||||||||||||||||||
| | | | | | | | |||||||||||||||||||
Eliminations of intersegment net revenue and other | (853 | ) | (717 | ) | ||||||||||||||||||||||
| | | | | | | | |||||||||||||||||||
Total HP consolidated net revenue | $ | 28,154 | $ | 28,359 | ||||||||||||||||||||||
| | | | | | | | |||||||||||||||||||
| | | | | | | | |||||||||||||||||||
StockBased_Compensation_Detail
Stock-Based Compensation (Details) (USD $) | 3 Months Ended | |
In Millions, except Share data in Thousands, unless otherwise specified | Jan. 31, 2014 | Jan. 31, 2013 |
Stock-Based Compensation | ' | ' |
Stock-based compensation expense | $170 | $184 |
Income tax benefit | -53 | -57 |
Stock-based compensation expense, net of tax | 117 | 127 |
Restricted Stock Awards | ' | ' |
Shares | ' | ' |
Outstanding at beginning of period (in shares) | 32,262 | ' |
Granted (in shares) | 21,013 | ' |
Vested (in shares) | -11,918 | ' |
Forfeited (in shares) | -557 | ' |
Outstanding at end of period (in shares) | 40,800 | ' |
Weighted-Average Grant Date Fair Value Per Share | ' | ' |
Outstanding at the beginning of period (in dollars per share) | $21 | ' |
Granted (in dollars per share) | $27 | ' |
Vested (in dollars per share) | $24 | ' |
Forfeited (in dollars per share) | $21 | ' |
Outstanding at the end of period (in dollars per share) | $23 | ' |
Unrecognized pre-tax stock-based compensation expense and recognition period | ' | ' |
Unrecognized pre-tax stock-based compensation expense | 692 | ' |
Remaining weighted-average vesting period over which pre-tax stock-based compensation expense expected to be recognized | '1 year 7 months 6 days | ' |
Stock Options | ' | ' |
Unrecognized pre-tax stock-based compensation expense and recognition period | ' | ' |
Unrecognized pre-tax stock-based compensation expense | 135 | ' |
Remaining weighted-average vesting period over which pre-tax stock-based compensation expense expected to be recognized | '2 years 2 months 12 days | ' |
Weighted-average fair value and the assumptions used to measure fair value | ' | ' |
Weighted- average fair value of grants per option (in dollars per share) | $7.45 | $4.01 |
Expected volatility (as a percent) | 34.00% | 42.00% |
Risk-free interest rate (as a percent) | 1.79% | 0.98% |
Expected dividend yield (as a percent) | 2.15% | 3.77% |
Expected term in months | '69 months | '70 months |
Shares | ' | ' |
Outstanding at beginning of period (in shares) | 84,042 | ' |
Granted (in shares) | 8,600 | ' |
Exercised (in shares) | -2,240 | ' |
Forfeited/cancelled/expired (in shares) | -18,362 | ' |
Outstanding at end of period (in shares) | 72,040 | ' |
Vested and expected to vest at end of period (in shares) | 66,593 | ' |
Exercisable at the end of period (in shares) | 34,307 | ' |
Weighted-Average Exercise Price | ' | ' |
Outstanding at beginning of period (in dollars per share) | $27 | ' |
Granted (in dollars per share) | $27 | ' |
Exercised (in dollars per share) | $17 | ' |
Forfeited/cancelled/expired (in dollars per share) | $32 | ' |
Outstanding at end of period (in dollars per share) | $26 | ' |
Vested and expected to vest at end of period (in dollars per share) | $26 | ' |
Exercisable at end of period (in dollars per share) | $33 | ' |
Weighted-Average Remaining Contractual Term | ' | ' |
Outstanding at end of period | '5 years | ' |
Vested and expected to vest at end of period | '4 years 9 months 18 days | ' |
Exercisable at end of period | '2 years 10 months 24 days | ' |
Aggregate Intrinsic Value | ' | ' |
Outstanding at end of period | 481 | ' |
Vested and expected to vest at end of period | 432 | ' |
Exercisable at end of period | 138 | ' |
Options exercised | $24 | ' |
Net_Earnings_Per_Share_Details
Net Earnings Per Share (Details) (USD $) | 3 Months Ended | |
In Millions, except Per Share data, unless otherwise specified | Jan. 31, 2014 | Jan. 31, 2013 |
Numerator: | ' | ' |
Net earnings | $1,425 | $1,232 |
Denominator: | ' | ' |
Weighted-average shares used to compute basic net EPS | 1,907 | 1,953 |
Dilutive effect of employee stock plans (in shares) | 28 | 3 |
Weighted-average shares used to compute diluted net EPS | 1,935 | 1,956 |
Net earnings per share: | ' | ' |
Basic (in dollars per share) | $0.75 | $0.63 |
Diluted (in dollars per share) | $0.74 | $0.63 |
Options with exercise price greater than market price of stock | ' | ' |
Other information related to EPS computation | ' | ' |
Antidilutive securities excluded from the calculation of EPS (in shares) | 30 | 74 |
Stock options combined exercise price unamortized fair value excess tax benefits greater than market price | ' | ' |
Other information related to EPS computation | ' | ' |
Antidilutive securities excluded from the calculation of EPS (in shares) | 7 | 12 |
Balance_Sheet_Details_Details
Balance Sheet Details (Details) (USD $) | 3 Months Ended | ||
Jan. 31, 2014 | Jan. 31, 2013 | Oct. 31, 2013 | |
item | |||
Accounts Receivable, Net | ' | ' | ' |
Accounts receivable | $13,760,000,000 | ' | $16,208,000,000 |
Allowance for doubtful accounts | -268,000,000 | ' | ' |
Accounts receivable, net | 13,492,000,000 | ' | 15,876,000,000 |
Allowance for doubtful accounts - accounts receivable: | ' | ' | ' |
Balance at beginning of period | 332,000,000 | ' | ' |
Provision for doubtful accounts | -11,000,000 | ' | ' |
Deductions, net of recoveries | -53,000,000 | ' | ' |
Balance at end of period | 268,000,000 | ' | ' |
Number of cases providing partial recourse | 1 | ' | ' |
Trade receivables sold | 1,500,000,000 | 1,500,000,000 | ' |
Non-recourse arrangements | ' | ' | ' |
Aggregate maximum program capacity | 759,000,000 | ' | 764,000,000 |
Aggregate available capacity | 451,000,000 | ' | 450,000,000 |
Aggregate utilized capacity | 308,000,000 | ' | 314,000,000 |
Partial-recourse arrangement | ' | ' | ' |
Maximum program capacity | 637,000,000 | ' | 631,000,000 |
Available capacity | 172,000,000 | ' | 177,000,000 |
Utilized capacity | 465,000,000 | ' | 454,000,000 |
Total arrangements | ' | ' | ' |
Aggregate maximum program capacity | 1,396,000,000 | ' | 1,395,000,000 |
Aggregate available capacity | 623,000,000 | ' | 627,000,000 |
Aggregate utilized capacity | 773,000,000 | ' | 768,000,000 |
Inventory | ' | ' | ' |
Finished goods | 3,757,000,000 | ' | 3,847,000,000 |
Purchased parts and fabricated assemblies | 2,247,000,000 | ' | 2,199,000,000 |
Inventory, net | $6,004,000,000 | ' | $6,046,000,000 |
Balance_Sheet_Details_Details_
Balance Sheet Details (Details 2) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Jan. 31, 2014 | Oct. 31, 2013 |
Property, Plant and Equipment, Gross | ' | ' |
Property, plant and equipment, gross | $26,166 | $26,133 |
Accumulated depreciation | -14,907 | -14,670 |
Property, plant and equipment, net | 11,259 | 11,463 |
Investment in property, plant and equipment | 878 | ' |
Sale and retirement of gross Property, Plant and Equipment | 766 | ' |
Accumulated depreciation on sale and retirement of property, plant and equipment | 560 | ' |
Land | ' | ' |
Property, Plant and Equipment, Gross | ' | ' |
Property, plant and equipment, gross | 553 | 626 |
Buildings and leasehold improvements | ' | ' |
Property, Plant and Equipment, Gross | ' | ' |
Property, plant and equipment, gross | 8,876 | 8,942 |
Machinery and equipment | ' | ' |
Property, Plant and Equipment, Gross | ' | ' |
Property, plant and equipment, gross | $16,737 | $16,565 |
Goodwill_and_Intangible_Assets2
Goodwill and Intangible Assets (Details) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Jan. 31, 2014 | Oct. 31, 2013 |
item | ||
Goodwill | ' | ' |
Balance at beginning of period | $31,124 | ' |
Goodwill adjustments | 7 | ' |
Balance at end of period | 31,131 | ' |
Accumulated impairment loss | 14,518 | 14,518 |
Number of reporting units within ES segment | 2 | ' |
Personal Systems | ' | ' |
Goodwill | ' | ' |
Balance at beginning of period | ' | 2,588 |
Balance at end of period | 2,588 | 2,588 |
Printing | ' | ' |
Goodwill | ' | ' |
Balance at beginning of period | ' | 2,591 |
Balance at end of period | 2,591 | 2,591 |
Enterprise Group | ' | ' |
Goodwill | ' | ' |
Balance at beginning of period | 16,864 | ' |
Goodwill adjustments | 8 | ' |
Balance at end of period | 16,872 | ' |
Enterprise Services segment | ' | ' |
Goodwill | ' | ' |
Balance at beginning of period | 97 | ' |
Goodwill adjustments | -1 | ' |
Balance at end of period | 96 | ' |
Accumulated impairment loss | 7,961 | 7,961 |
Software | ' | ' |
Goodwill | ' | ' |
Balance at beginning of period | ' | 8,840 |
Balance at end of period | 8,840 | 8,840 |
Accumulated impairment loss | 5,744 | 5,744 |
HP Financial Services | ' | ' |
Goodwill | ' | ' |
Balance at beginning of period | ' | 144 |
Balance at end of period | 144 | 144 |
Corporate Investments | ' | ' |
Goodwill | ' | ' |
Accumulated impairment loss | $813 | $813 |
Goodwill_and_Intangible_Assets3
Goodwill and Intangible Assets (Details 2) (USD $) | 3 Months Ended | 12 Months Ended |
In Millions, unless otherwise specified | Jan. 31, 2014 | Oct. 31, 2013 |
Intangible assets | ' | ' |
Amortizable intangible assets, accumulated amortization | ($5,169) | ($4,886) |
Finite-lived Intangible Assets, Accumulated Impairment Losses | -4,330 | -4,330 |
Amortizable intangible assets, net | 2,817 | ' |
Intangible assets, gross | 12,319 | 12,385 |
Total Intangible Assets- Net | 2,820 | 3,169 |
In-process research and development | ' | ' |
Intangible assets | ' | ' |
Amortizable intangible assets, gross | 3 | 3 |
Customer contracts, customer lists and distribution agreements | ' | ' |
Intangible assets | ' | ' |
Amortizable intangible assets, gross | 5,321 | 5,321 |
Amortizable intangible assets, accumulated amortization | -2,847 | -2,709 |
Finite-lived Intangible Assets, Accumulated Impairment Losses | -856 | -856 |
Amortizable intangible assets, net | 1,618 | 1,756 |
Developed and core technology and patents | ' | ' |
Intangible assets | ' | ' |
Amortizable intangible assets, gross | 5,265 | 5,331 |
Amortizable intangible assets, accumulated amortization | -2,089 | -1,966 |
Finite-lived Intangible Assets, Accumulated Impairment Losses | -2,138 | -2,138 |
Amortizable intangible assets, net | 1,038 | 1,227 |
Trade name and trade marks | ' | ' |
Intangible assets | ' | ' |
Amortizable intangible assets, gross | 1,730 | 1,730 |
Amortizable intangible assets, accumulated amortization | -233 | -211 |
Intangible Assets, Accumulated Impairment Losses | -1,336 | -1,336 |
Amortizable intangible assets, net | $161 | $183 |
Goodwill_and_Intangible_Assets4
Goodwill and Intangible Assets (Details 3) (USD $) | Jan. 31, 2014 |
In Millions, unless otherwise specified | |
Estimated future amortization expense related to finite-lived purchased intangible assets | ' |
2014 (remaining 9 months) | $715 |
2015 | 864 |
2016 | 645 |
2017 | 237 |
2018 | 145 |
2019 | 110 |
Thereafter | 101 |
Amortizable intangible assets, net | $2,817 |
Restructuring_Charges_Details
Restructuring Charges (Details) (USD $) | 3 Months Ended | ||
In Millions, unless otherwise specified | Jan. 31, 2014 | Jan. 31, 2013 | Oct. 31, 2013 |
Restructuring Reserve | ' | ' | ' |
Balance at the beginning of the period | $1,117 | ' | ' |
Charges | 114 | 130 | ' |
Cash Payments | -381 | ' | ' |
Other Adjustments and Non-Cash Settlements | 4 | ' | ' |
Balance at the end of the period | 854 | ' | ' |
Total Costs Incurred to Date | 7,465 | ' | ' |
Total Expected Costs to Be Incurred | 8,172 | ' | ' |
Short-term portion of restructuring reserve, recorded in Accrued restructuring | 630 | ' | 901 |
Long-term portion of restructuring reserve, recorded in Other liabilities | 224 | ' | 216 |
Fiscal 2012 Restructuring Plan | ' | ' | ' |
Restructuring Reserve | ' | ' | ' |
Balance at the beginning of the period | 985 | ' | ' |
Charges | 115 | ' | ' |
Cash Payments | -368 | ' | ' |
Other Adjustments and Non-Cash Settlements | 4 | ' | ' |
Balance at the end of the period | 736 | ' | ' |
Total Costs Incurred to Date | 3,398 | ' | ' |
Total Expected Costs to Be Incurred | 4,100 | ' | ' |
Expected positions to be eliminated | 34,000 | ' | ' |
Positions eliminated | 28,300 | ' | ' |
Fiscal 2012 Restructuring Plan | Severance and EER | ' | ' | ' |
Restructuring Reserve | ' | ' | ' |
Balance at the beginning of the period | 945 | ' | ' |
Charges | 59 | ' | ' |
Cash Payments | -333 | ' | ' |
Other Adjustments and Non-Cash Settlements | 4 | ' | ' |
Balance at the end of the period | 675 | ' | ' |
Total Costs Incurred to Date | 3,095 | ' | ' |
Fiscal 2012 Restructuring Plan | Infrastructure and other items | ' | ' | ' |
Restructuring Reserve | ' | ' | ' |
Balance at the beginning of the period | 40 | ' | ' |
Charges | 56 | ' | ' |
Cash Payments | -35 | ' | ' |
Balance at the end of the period | 61 | ' | ' |
Total Costs Incurred to Date | 303 | ' | ' |
Total Expected Costs to Be Incurred | 600 | ' | ' |
Other Plans | ' | ' | ' |
Restructuring Reserve | ' | ' | ' |
Balance at the beginning of the period | 132 | ' | ' |
Charges | -1 | ' | ' |
Cash Payments | -13 | ' | ' |
Balance at the end of the period | 118 | ' | ' |
Total Costs Incurred to Date | 4,067 | ' | ' |
Total Expected Costs to Be Incurred | 4,072 | ' | ' |
Expected additional cost in future period | 5 | ' | ' |
Other Plans | Severance and workforce reductions | ' | ' | ' |
Restructuring Reserve | ' | ' | ' |
Balance at the beginning of the period | 10 | ' | ' |
Cash Payments | -2 | ' | ' |
Balance at the end of the period | 8 | ' | ' |
Total Costs Incurred to Date | 2,629 | ' | ' |
Total Expected Costs to Be Incurred | 2,629 | ' | ' |
Other Plans | Infrastructure | ' | ' | ' |
Restructuring Reserve | ' | ' | ' |
Balance at the beginning of the period | 122 | ' | ' |
Charges | -1 | ' | ' |
Cash Payments | -11 | ' | ' |
Balance at the end of the period | 110 | ' | ' |
Total Costs Incurred to Date | 1,438 | ' | ' |
Total Expected Costs to Be Incurred | $1,443 | ' | ' |
Fair_Value_Details
Fair Value (Details) (USD $) | 3 Months Ended | |
Jan. 31, 2014 | Oct. 31, 2013 | |
Financial assets and liabilities measured at fair value on a recurring basis | ' | ' |
Transfers between levels within the fair value hierarchy | $0 | ' |
Fair Value and Carrying Value of Debt | ' | ' |
Fair value, short- and long-term debt | 24,800,000,000 | 22,700,000,000 |
Carrying value, short- and long-term debt | 24,600,000,000 | 22,600,000,000 |
Fair Value, Measurements, Recurring | Fair Value Measured Using Level 1 | ' | ' |
Financial assets and liabilities measured at fair value on a recurring basis | ' | ' |
Total assets, measured at fair value on a recurring basis | 9,644,000,000 | 6,838,000,000 |
Fair Value, Measurements, Recurring | Fair Value Measured Using Level 1 | Money market funds | ' | ' |
Financial assets and liabilities measured at fair value on a recurring basis | ' | ' |
Total assets, measured at fair value on a recurring basis | 9,627,000,000 | 6,819,000,000 |
Fair Value, Measurements, Recurring | Fair Value Measured Using Level 1 | Marketable equity securities | ' | ' |
Financial assets and liabilities measured at fair value on a recurring basis | ' | ' |
Total assets, measured at fair value on a recurring basis | 8,000,000 | 10,000,000 |
Fair Value, Measurements, Recurring | Fair Value Measured Using Level 1 | Foreign bonds | ' | ' |
Financial assets and liabilities measured at fair value on a recurring basis | ' | ' |
Total assets, measured at fair value on a recurring basis | 9,000,000 | 9,000,000 |
Fair Value, Measurements, Recurring | Fair Value Measured Using Level 2 | ' | ' |
Financial assets and liabilities measured at fair value on a recurring basis | ' | ' |
Total assets, measured at fair value on a recurring basis | 4,838,000,000 | 3,377,000,000 |
Total liabilities, measured at fair value on a recurring basis | 567,000,000 | 654,000,000 |
Fair Value, Measurements, Recurring | Fair Value Measured Using Level 2 | Time deposits | ' | ' |
Financial assets and liabilities measured at fair value on a recurring basis | ' | ' |
Total assets, measured at fair value on a recurring basis | 3,385,000,000 | 2,221,000,000 |
Fair Value, Measurements, Recurring | Fair Value Measured Using Level 2 | Mutual funds | ' | ' |
Financial assets and liabilities measured at fair value on a recurring basis | ' | ' |
Total assets, measured at fair value on a recurring basis | 359,000,000 | 313,000,000 |
Fair Value, Measurements, Recurring | Fair Value Measured Using Level 2 | Marketable equity securities | ' | ' |
Financial assets and liabilities measured at fair value on a recurring basis | ' | ' |
Total assets, measured at fair value on a recurring basis | 7,000,000 | 5,000,000 |
Fair Value, Measurements, Recurring | Fair Value Measured Using Level 2 | Foreign bonds | ' | ' |
Financial assets and liabilities measured at fair value on a recurring basis | ' | ' |
Total assets, measured at fair value on a recurring basis | 385,000,000 | 387,000,000 |
Fair Value, Measurements, Recurring | Fair Value Measured Using Level 2 | Other Debt Securities | ' | ' |
Financial assets and liabilities measured at fair value on a recurring basis | ' | ' |
Total assets, measured at fair value on a recurring basis | 2,000,000 | 2,000,000 |
Fair Value, Measurements, Recurring | Fair Value Measured Using Level 2 | Interest rate contracts | ' | ' |
Financial assets and liabilities measured at fair value on a recurring basis | ' | ' |
Total assets, measured at fair value on a recurring basis | 141,000,000 | 156,000,000 |
Total liabilities, measured at fair value on a recurring basis | 116,000,000 | 107,000,000 |
Fair Value, Measurements, Recurring | Fair Value Measured Using Level 2 | Foreign exchange contracts | ' | ' |
Financial assets and liabilities measured at fair value on a recurring basis | ' | ' |
Total assets, measured at fair value on a recurring basis | 556,000,000 | 284,000,000 |
Total liabilities, measured at fair value on a recurring basis | 447,000,000 | 547,000,000 |
Fair Value, Measurements, Recurring | Fair Value Measured Using Level 2 | Other derivatives | ' | ' |
Financial assets and liabilities measured at fair value on a recurring basis | ' | ' |
Total assets, measured at fair value on a recurring basis | 3,000,000 | 9,000,000 |
Total liabilities, measured at fair value on a recurring basis | 4,000,000 | ' |
Fair Value, Measurements, Recurring | Fair Value Measured Using Level 3 | ' | ' |
Financial assets and liabilities measured at fair value on a recurring basis | ' | ' |
Total assets, measured at fair value on a recurring basis | 46,000,000 | 50,000,000 |
Total liabilities, measured at fair value on a recurring basis | 5,000,000 | 2,000,000 |
Fair Value, Measurements, Recurring | Fair Value Measured Using Level 3 | Other Debt Securities | ' | ' |
Financial assets and liabilities measured at fair value on a recurring basis | ' | ' |
Total assets, measured at fair value on a recurring basis | 46,000,000 | 47,000,000 |
Fair Value, Measurements, Recurring | Fair Value Measured Using Level 3 | Foreign exchange contracts | ' | ' |
Financial assets and liabilities measured at fair value on a recurring basis | ' | ' |
Total assets, measured at fair value on a recurring basis | ' | 3,000,000 |
Total liabilities, measured at fair value on a recurring basis | 5,000,000 | 2,000,000 |
Fair Value, Measurements, Recurring | Estimate of Fair Value, Fair Value Disclosure | ' | ' |
Financial assets and liabilities measured at fair value on a recurring basis | ' | ' |
Total assets, measured at fair value on a recurring basis | 14,528,000,000 | 10,265,000,000 |
Total liabilities, measured at fair value on a recurring basis | 572,000,000 | 656,000,000 |
Fair Value, Measurements, Recurring | Estimate of Fair Value, Fair Value Disclosure | Time deposits | ' | ' |
Financial assets and liabilities measured at fair value on a recurring basis | ' | ' |
Total assets, measured at fair value on a recurring basis | 3,385,000,000 | 2,221,000,000 |
Fair Value, Measurements, Recurring | Estimate of Fair Value, Fair Value Disclosure | Money market funds | ' | ' |
Financial assets and liabilities measured at fair value on a recurring basis | ' | ' |
Total assets, measured at fair value on a recurring basis | 9,627,000,000 | 6,819,000,000 |
Fair Value, Measurements, Recurring | Estimate of Fair Value, Fair Value Disclosure | Mutual funds | ' | ' |
Financial assets and liabilities measured at fair value on a recurring basis | ' | ' |
Total assets, measured at fair value on a recurring basis | 359,000,000 | 313,000,000 |
Fair Value, Measurements, Recurring | Estimate of Fair Value, Fair Value Disclosure | Marketable equity securities | ' | ' |
Financial assets and liabilities measured at fair value on a recurring basis | ' | ' |
Total assets, measured at fair value on a recurring basis | 15,000,000 | 15,000,000 |
Fair Value, Measurements, Recurring | Estimate of Fair Value, Fair Value Disclosure | Foreign bonds | ' | ' |
Financial assets and liabilities measured at fair value on a recurring basis | ' | ' |
Total assets, measured at fair value on a recurring basis | 394,000,000 | 396,000,000 |
Fair Value, Measurements, Recurring | Estimate of Fair Value, Fair Value Disclosure | Other Debt Securities | ' | ' |
Financial assets and liabilities measured at fair value on a recurring basis | ' | ' |
Total assets, measured at fair value on a recurring basis | 48,000,000 | 49,000,000 |
Fair Value, Measurements, Recurring | Estimate of Fair Value, Fair Value Disclosure | Interest rate contracts | ' | ' |
Financial assets and liabilities measured at fair value on a recurring basis | ' | ' |
Total assets, measured at fair value on a recurring basis | 141,000,000 | 156,000,000 |
Total liabilities, measured at fair value on a recurring basis | 116,000,000 | 107,000,000 |
Fair Value, Measurements, Recurring | Estimate of Fair Value, Fair Value Disclosure | Foreign exchange contracts | ' | ' |
Financial assets and liabilities measured at fair value on a recurring basis | ' | ' |
Total assets, measured at fair value on a recurring basis | 556,000,000 | 287,000,000 |
Total liabilities, measured at fair value on a recurring basis | 452,000,000 | 549,000,000 |
Fair Value, Measurements, Recurring | Estimate of Fair Value, Fair Value Disclosure | Other derivatives | ' | ' |
Financial assets and liabilities measured at fair value on a recurring basis | ' | ' |
Total assets, measured at fair value on a recurring basis | 3,000,000 | 9,000,000 |
Total liabilities, measured at fair value on a recurring basis | $4,000,000 | ' |
Financial_Instruments_Details
Financial Instruments (Details) (USD $) | Jan. 31, 2014 | Oct. 31, 2013 |
In Millions, unless otherwise specified | ||
Cash equivalents and available-for-sale investments | ' | ' |
Available-for-sale securities, Cost | $523 | $693 |
Available-for-sale securities, Gross Unrealized Gain | 90 | 92 |
Available-for-sale securities, Gross Unrealized Loss | -15 | -15 |
Available-for-sale securities, Estimated Fair Value | 598 | 770 |
Cost | ' | ' |
Cash equivalents and available-for-sale investments | ' | ' |
Cash equivalents | 13,226 | 9,039 |
Total cash equivalents and available-for-sale investments | 13,749 | 9,732 |
Fair Value | ' | ' |
Cash equivalents and available-for-sale investments | ' | ' |
Cash equivalents | 13,226 | 9,039 |
Total cash equivalents and available-for-sale investments | 13,824 | 9,809 |
Debt securities: | ' | ' |
Cash equivalents and available-for-sale investments | ' | ' |
Available-for-sale securities, Gross Unrealized Gain | 87 | 86 |
Available-for-sale securities, Gross Unrealized Loss | -15 | -15 |
Gross unrealized loss of debt security in a continuous loss position for more than 12 months | 15 | 15 |
Debt securities: | Cost | ' | ' |
Cash equivalents and available-for-sale investments | ' | ' |
Available-for-sale securities, Cost | 417 | 388 |
Debt securities: | Fair Value | ' | ' |
Cash equivalents and available-for-sale investments | ' | ' |
Available-for-sale securities, Estimated Fair Value | 489 | 459 |
Time deposits | Cost | ' | ' |
Cash equivalents and available-for-sale investments | ' | ' |
Available-for-sale securities, Cost | 47 | 14 |
Time deposits | Fair Value | ' | ' |
Cash equivalents and available-for-sale investments | ' | ' |
Available-for-sale securities, Estimated Fair Value | 47 | 14 |
Foreign bonds | ' | ' |
Cash equivalents and available-for-sale investments | ' | ' |
Available-for-sale securities, Gross Unrealized Gain | 87 | 86 |
Foreign bonds | Cost | ' | ' |
Cash equivalents and available-for-sale investments | ' | ' |
Available-for-sale securities, Cost | 307 | 310 |
Foreign bonds | Fair Value | ' | ' |
Cash equivalents and available-for-sale investments | ' | ' |
Available-for-sale securities, Estimated Fair Value | 394 | 396 |
Other Debt Securities | ' | ' |
Cash equivalents and available-for-sale investments | ' | ' |
Available-for-sale securities, Gross Unrealized Loss | -15 | -15 |
Other Debt Securities | Cost | ' | ' |
Cash equivalents and available-for-sale investments | ' | ' |
Available-for-sale securities, Cost | 63 | 64 |
Other Debt Securities | Fair Value | ' | ' |
Cash equivalents and available-for-sale investments | ' | ' |
Available-for-sale securities, Estimated Fair Value | 48 | 49 |
Equity securities: | ' | ' |
Cash equivalents and available-for-sale investments | ' | ' |
Available-for-sale securities, Gross Unrealized Gain | 3 | 6 |
Equity securities: | Cost | ' | ' |
Cash equivalents and available-for-sale investments | ' | ' |
Available-for-sale securities, Cost | 106 | 305 |
Equity securities: | Fair Value | ' | ' |
Cash equivalents and available-for-sale investments | ' | ' |
Available-for-sale securities, Estimated Fair Value | 109 | 311 |
Mutual funds | Cost | ' | ' |
Cash equivalents and available-for-sale investments | ' | ' |
Available-for-sale securities, Cost | 98 | 300 |
Mutual funds | Fair Value | ' | ' |
Cash equivalents and available-for-sale investments | ' | ' |
Available-for-sale securities, Estimated Fair Value | 98 | 300 |
Equity securities in public companies | ' | ' |
Cash equivalents and available-for-sale investments | ' | ' |
Available-for-sale securities, Gross Unrealized Gain | 3 | 6 |
Equity securities in public companies | Cost | ' | ' |
Cash equivalents and available-for-sale investments | ' | ' |
Available-for-sale securities, Cost | 8 | 5 |
Equity securities in public companies | Fair Value | ' | ' |
Cash equivalents and available-for-sale investments | ' | ' |
Available-for-sale securities, Estimated Fair Value | 11 | 11 |
Time deposits | Cost | ' | ' |
Cash equivalents and available-for-sale investments | ' | ' |
Cash equivalents | 3,338 | 2,207 |
Time deposits | Fair Value | ' | ' |
Cash equivalents and available-for-sale investments | ' | ' |
Cash equivalents | 3,338 | 2,207 |
Money market funds | Cost | ' | ' |
Cash equivalents and available-for-sale investments | ' | ' |
Cash equivalents | 9,627 | 6,819 |
Money market funds | Fair Value | ' | ' |
Cash equivalents and available-for-sale investments | ' | ' |
Cash equivalents | 9,627 | 6,819 |
Mutual funds | Cost | ' | ' |
Cash equivalents and available-for-sale investments | ' | ' |
Cash equivalents | 261 | 13 |
Mutual funds | Fair Value | ' | ' |
Cash equivalents and available-for-sale investments | ' | ' |
Cash equivalents | $261 | $13 |
Financial_Instruments_Details_
Financial Instruments (Details 2) (USD $) | Jan. 31, 2014 | Oct. 31, 2013 |
In Millions, unless otherwise specified | ||
Cost | ' | ' |
Due in one to five years | $34 | ' |
Due in more than five years | 383 | ' |
Total | 417 | ' |
Fair Value | ' | ' |
Due in one to five years | 34 | ' |
Due in more than five years | 455 | ' |
Total | 489 | ' |
Investment Holdings | ' | ' |
Investment amount | 598 | 770 |
Equity securities in privately held companies | Long-term Financing Receivables and Other Assets | ' | ' |
Investment Holdings | ' | ' |
Investment amount | $49 | $50 |
Financial_Instruments_Details_1
Financial Instruments (Details 3) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Jan. 31, 2014 | Oct. 31, 2013 |
Financial Instruments | ' | ' |
Period within which the funds held as collateral and posted as collateral are transferred from or to counterparties | '2 days | ' |
Derivatives, Fair Value | ' | ' |
Total derivatives, gross notional amount | $49,304 | $51,875 |
Derivative asset, fair value | 700 | 452 |
Derivative liability, fair value | 572 | 656 |
Other Current Assets | ' | ' |
Derivatives, Fair Value | ' | ' |
Derivative asset, fair value | 400 | 220 |
Long-Term Financing Receivables and Other Assets | ' | ' |
Derivatives, Fair Value | ' | ' |
Derivative asset, fair value | 300 | 232 |
Other Accrued Liabilities | ' | ' |
Derivatives, Fair Value | ' | ' |
Derivative liability, fair value | 309 | 437 |
Long-Term Other Liabilities | ' | ' |
Derivatives, Fair Value | ' | ' |
Derivative liability, fair value | 263 | 219 |
Cash flow hedges | ' | ' |
Derivatives, Fair Value | ' | ' |
Maturity period of foreign currency cash flow hedges | '12 months | ' |
Maximum duration of lease term for which lease-related forward contracts and intercompany lease loan forward contracts can be extended | '5 years | ' |
Derivatives designated as hedging instruments | ' | ' |
Derivatives, Fair Value | ' | ' |
Total derivatives, gross notional amount | 36,342 | 35,483 |
Derivatives designated as hedging instruments | Other Current Assets | ' | ' |
Derivatives, Fair Value | ' | ' |
Derivative asset, fair value | 300 | 140 |
Derivatives designated as hedging instruments | Long-Term Financing Receivables and Other Assets | ' | ' |
Derivatives, Fair Value | ' | ' |
Derivative asset, fair value | 254 | 205 |
Derivatives designated as hedging instruments | Other Accrued Liabilities | ' | ' |
Derivatives, Fair Value | ' | ' |
Derivative liability, fair value | 241 | 361 |
Derivatives designated as hedging instruments | Long-Term Other Liabilities | ' | ' |
Derivatives, Fair Value | ' | ' |
Derivative liability, fair value | 231 | 199 |
Derivatives designated as hedging instruments | Fair value hedges | Interest rate contracts | ' | ' |
Derivatives, Fair Value | ' | ' |
Total derivatives, gross notional amount | 12,350 | 11,100 |
Derivatives designated as hedging instruments | Fair value hedges | Interest rate contracts | Other Current Assets | ' | ' |
Derivatives, Fair Value | ' | ' |
Derivative asset, fair value | 14 | 31 |
Derivatives designated as hedging instruments | Fair value hedges | Interest rate contracts | Long-Term Financing Receivables and Other Assets | ' | ' |
Derivatives, Fair Value | ' | ' |
Derivative asset, fair value | 127 | 125 |
Derivatives designated as hedging instruments | Fair value hedges | Interest rate contracts | Long-Term Other Liabilities | ' | ' |
Derivatives, Fair Value | ' | ' |
Derivative liability, fair value | 116 | 107 |
Derivatives designated as hedging instruments | Cash flow hedges | Foreign exchange contracts | ' | ' |
Derivatives, Fair Value | ' | ' |
Total derivatives, gross notional amount | 22,035 | 22,463 |
Derivatives designated as hedging instruments | Cash flow hedges | Foreign exchange contracts | Other Current Assets | ' | ' |
Derivatives, Fair Value | ' | ' |
Derivative asset, fair value | 226 | 79 |
Derivatives designated as hedging instruments | Cash flow hedges | Foreign exchange contracts | Long-Term Financing Receivables and Other Assets | ' | ' |
Derivatives, Fair Value | ' | ' |
Derivative asset, fair value | 60 | 40 |
Derivatives designated as hedging instruments | Cash flow hedges | Foreign exchange contracts | Other Accrued Liabilities | ' | ' |
Derivatives, Fair Value | ' | ' |
Derivative liability, fair value | 234 | 341 |
Derivatives designated as hedging instruments | Cash flow hedges | Foreign exchange contracts | Long-Term Other Liabilities | ' | ' |
Derivatives, Fair Value | ' | ' |
Derivative liability, fair value | 106 | 80 |
Derivatives designated as hedging instruments | Net investment hedges | Foreign exchange contracts | ' | ' |
Derivatives, Fair Value | ' | ' |
Total derivatives, gross notional amount | 1,957 | 1,920 |
Derivatives designated as hedging instruments | Net investment hedges | Foreign exchange contracts | Other Current Assets | ' | ' |
Derivatives, Fair Value | ' | ' |
Derivative asset, fair value | 60 | 30 |
Derivatives designated as hedging instruments | Net investment hedges | Foreign exchange contracts | Long-Term Financing Receivables and Other Assets | ' | ' |
Derivatives, Fair Value | ' | ' |
Derivative asset, fair value | 67 | 40 |
Derivatives designated as hedging instruments | Net investment hedges | Foreign exchange contracts | Other Accrued Liabilities | ' | ' |
Derivatives, Fair Value | ' | ' |
Derivative liability, fair value | 7 | 20 |
Derivatives designated as hedging instruments | Net investment hedges | Foreign exchange contracts | Long-Term Other Liabilities | ' | ' |
Derivatives, Fair Value | ' | ' |
Derivative liability, fair value | 9 | 12 |
Derivatives not designated as hedging instruments | ' | ' |
Derivatives, Fair Value | ' | ' |
Total derivatives, gross notional amount | 12,962 | 16,392 |
Derivatives not designated as hedging instruments | Other Current Assets | ' | ' |
Derivatives, Fair Value | ' | ' |
Derivative asset, fair value | 100 | 80 |
Derivatives not designated as hedging instruments | Long-Term Financing Receivables and Other Assets | ' | ' |
Derivatives, Fair Value | ' | ' |
Derivative asset, fair value | 46 | 27 |
Derivatives not designated as hedging instruments | Other Accrued Liabilities | ' | ' |
Derivatives, Fair Value | ' | ' |
Derivative liability, fair value | 68 | 76 |
Derivatives not designated as hedging instruments | Long-Term Other Liabilities | ' | ' |
Derivatives, Fair Value | ' | ' |
Derivative liability, fair value | 32 | 20 |
Derivatives not designated as hedging instruments | Foreign exchange contracts | ' | ' |
Derivatives, Fair Value | ' | ' |
Total derivatives, gross notional amount | 12,652 | 16,048 |
Derivatives not designated as hedging instruments | Foreign exchange contracts | Other Current Assets | ' | ' |
Derivatives, Fair Value | ' | ' |
Derivative asset, fair value | 98 | 72 |
Derivatives not designated as hedging instruments | Foreign exchange contracts | Long-Term Financing Receivables and Other Assets | ' | ' |
Derivatives, Fair Value | ' | ' |
Derivative asset, fair value | 45 | 26 |
Derivatives not designated as hedging instruments | Foreign exchange contracts | Other Accrued Liabilities | ' | ' |
Derivatives, Fair Value | ' | ' |
Derivative liability, fair value | 64 | 76 |
Derivatives not designated as hedging instruments | Foreign exchange contracts | Long-Term Other Liabilities | ' | ' |
Derivatives, Fair Value | ' | ' |
Derivative liability, fair value | 32 | 20 |
Derivatives not designated as hedging instruments | Other derivatives | ' | ' |
Derivatives, Fair Value | ' | ' |
Total derivatives, gross notional amount | 310 | 344 |
Derivatives not designated as hedging instruments | Other derivatives | Other Current Assets | ' | ' |
Derivatives, Fair Value | ' | ' |
Derivative asset, fair value | 2 | 8 |
Derivatives not designated as hedging instruments | Other derivatives | Long-Term Financing Receivables and Other Assets | ' | ' |
Derivatives, Fair Value | ' | ' |
Derivative asset, fair value | 1 | 1 |
Derivatives not designated as hedging instruments | Other derivatives | Other Accrued Liabilities | ' | ' |
Derivatives, Fair Value | ' | ' |
Derivative liability, fair value | $4 | ' |
Financial_Instruments_Details_2
Financial Instruments (Details 4) (USD $) | Jan. 31, 2014 | Oct. 31, 2013 |
In Millions, unless otherwise specified | ||
Derivative assets | ' | ' |
Gross Amount Recognized | $700 | $452 |
Net Amount Presented | 700 | 452 |
Gross Amounts Not Offset | ' | ' |
Derivatives | 363 | 372 |
Financial Collateral | 180 | 30 |
Net Amount | 157 | 50 |
Derivative liabilities | ' | ' |
Gross Amount Recognized | 572 | 656 |
Net Amount Presented | 572 | 656 |
Gross Amounts Not Offset | ' | ' |
Derivatives | 363 | 372 |
Financial Collateral | 155 | 283 |
Net Amount | 54 | 1 |
Cash posted as collateral to counterparties through reuse | 62 | 30 |
Cash posted as collateral to counterparties in cash | $93 | $253 |
Financial_Instruments_Details_3
Financial Instruments (Details 5) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Jan. 31, 2014 | Jan. 31, 2013 |
Pre-tax effect of derivative instruments in cash flow and net investment hedging relationships | ' | ' |
Portion of the hedging instruments gain or loss excluded from the assessment of effectiveness for fair value, cash flow or net investment hedges | $0 | ' |
Pre-tax effect of derivative instruments not designated as hedging instruments on the Consolidated Condensed Statements of Earnings | ' | ' |
Gain (Loss) Recognized in earnings on derivatives not designated as hedges | 180 | -31 |
Interest rate contracts | Interest and other, net | ' | ' |
Pre-tax effect of derivative instruments and related hedged items in a fair value hedging relationship | ' | ' |
Gain (Loss) Recognized in Earnings on Derivative | -24 | -99 |
Gain (Loss) Recognized in Earnings on Related Hedged Item | 24 | 98 |
Pre-tax effect of derivative instruments not designated as hedging instruments on the Consolidated Condensed Statements of Earnings | ' | ' |
Gain (Loss) Recognized in earnings on derivatives not designated as hedges | ' | 2 |
Foreign exchange contracts | Interest and other, net | ' | ' |
Pre-tax effect of derivative instruments not designated as hedging instruments on the Consolidated Condensed Statements of Earnings | ' | ' |
Gain (Loss) Recognized in earnings on derivatives not designated as hedges | 190 | -40 |
Other derivatives | Interest and other, net | ' | ' |
Pre-tax effect of derivative instruments not designated as hedging instruments on the Consolidated Condensed Statements of Earnings | ' | ' |
Gain (Loss) Recognized in earnings on derivatives not designated as hedges | -10 | 7 |
Cash flow hedges | ' | ' |
Pre-tax effect of derivative instruments in cash flow and net investment hedging relationships | ' | ' |
Gain (Loss) Recognized in Other Comprehensive Income ("OCI") on Derivatives (Effective portion) | 70 | -314 |
Gain (Loss) Reclassified from Accumulated OCI into Earnings (Effective Portion) | -109 | -64 |
Loss expected to be reclassified from Accumulated OCI into earnings in next 12 months | -28 | ' |
Cash flow hedges | Foreign exchange contracts | Net revenue | ' | ' |
Pre-tax effect of derivative instruments in cash flow and net investment hedging relationships | ' | ' |
Gain (Loss) Recognized in Other Comprehensive Income ("OCI") on Derivatives (Effective portion) | 175 | -199 |
Gain (Loss) Reclassified from Accumulated OCI into Earnings (Effective Portion) | -63 | -57 |
Cash flow hedges | Foreign exchange contracts | Cost of products | ' | ' |
Pre-tax effect of derivative instruments in cash flow and net investment hedging relationships | ' | ' |
Gain (Loss) Recognized in Other Comprehensive Income ("OCI") on Derivatives (Effective portion) | -87 | -125 |
Gain (Loss) Reclassified from Accumulated OCI into Earnings (Effective Portion) | -23 | -3 |
Cash flow hedges | Foreign exchange contracts | Other operating expenses | ' | ' |
Pre-tax effect of derivative instruments in cash flow and net investment hedging relationships | ' | ' |
Gain (Loss) Recognized in Other Comprehensive Income ("OCI") on Derivatives (Effective portion) | ' | 8 |
Gain (Loss) Reclassified from Accumulated OCI into Earnings (Effective Portion) | -4 | 1 |
Cash flow hedges | Foreign exchange contracts | Interest and other, net | ' | ' |
Pre-tax effect of derivative instruments in cash flow and net investment hedging relationships | ' | ' |
Gain (Loss) Recognized in Other Comprehensive Income ("OCI") on Derivatives (Effective portion) | -18 | 2 |
Gain (Loss) Reclassified from Accumulated OCI into Earnings (Effective Portion) | -19 | -5 |
Net investment hedges | Foreign exchange contracts | Interest and other, net | ' | ' |
Pre-tax effect of derivative instruments in cash flow and net investment hedging relationships | ' | ' |
Gain (Loss) Recognized in Other Comprehensive Income ("OCI") on Derivatives (Effective portion) | $66 | ($15) |
Financing_Receivables_and_Oper2
Financing Receivables and Operating Leases (Details) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Jan. 31, 2014 | Oct. 31, 2013 |
Financing Receivables and Operating Leases | ' | ' |
Financing receivable term, low end of range | '2 years | ' |
Financing receivable term, high end of range | '5 years | ' |
Minimum lease payments receivable | $7,198 | $7,505 |
Unguaranteed residual value | 249 | 252 |
Unearned income | -597 | -604 |
Financing receivables, gross | 6,850 | 7,153 |
Allowance for doubtful accounts | -132 | -131 |
Financing receivables, net | 6,718 | 7,022 |
Less current portion | -3,054 | -3,144 |
Amounts due after one year, net | $3,664 | $3,878 |
Financing_Receivables_and_Oper3
Financing Receivables and Operating Leases (Details 2) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Jan. 31, 2014 | Oct. 31, 2013 |
Gross financing receivables | ' | ' |
Net Investment | $6,850 | $7,153 |
Period past due, after which a write-off or specific reserve is created | '180 days | ' |
Allowance for doubtful accounts | ' | ' |
Balance at beginning of period | 131 | ' |
Provision for doubtful accounts | 7 | ' |
Deductions, net of recoveries | -6 | ' |
Balance at end of period | 132 | ' |
Allowance for financing receivables collectively evaluated for loss | 93 | 95 |
Allowance for financing receivables individually evaluated for loss | 39 | 36 |
Gross financing receivables collectively evaluated for loss | 6,510 | 6,773 |
Gross financing receivables individually evaluated for loss | 340 | 380 |
Period past due, after which account is put on non-accrual status | '90 days | ' |
Aging and non-accrual status of gross financing receivables | ' | ' |
Current 1-30 days | 242 | 217 |
Past due 31-60 days | 38 | 50 |
Past due 61-90 days | 24 | 15 |
Past due >90 days | 56 | 46 |
Unbilled sales-type and direct-financing lease receivables | 6,490 | 6,825 |
Gross financing receivables on non-accrual status | 191 | 199 |
Gross financing receivables 90 days past due and still accruing interest | 149 | 181 |
Operating lease assets | ' | ' |
Equipment leased to customers | 3,751 | 3,822 |
Accumulated depreciation | -1,404 | -1,452 |
Operating lease assets, net | 2,347 | 2,370 |
Low | ' | ' |
Gross financing receivables | ' | ' |
Net Investment | 3,724 | 3,948 |
Moderate | ' | ' |
Gross financing receivables | ' | ' |
Net Investment | 3,000 | 3,084 |
High | ' | ' |
Gross financing receivables | ' | ' |
Net Investment | $126 | $121 |
Guarantees_Details
Guarantees (Details) (USD $) | 3 Months Ended |
In Millions, unless otherwise specified | Jan. 31, 2014 |
Changes in aggregated product warranty liabilities | ' |
Balance at beginning of period | $2,031 |
Accruals for warranties issued | 447 |
Adjustments related to pre-existing warranties (including changes in estimates) | 7 |
Settlements made (in cash or in kind) | -481 |
Balance at end of period | $2,004 |
Borrowings_Details
Borrowings (Details) (USD $) | Jan. 31, 2014 | Oct. 31, 2013 |
In Millions, unless otherwise specified | ||
Notes Payable and Short-Term Borrowings | ' | ' |
Current portion of long-term debt | $5,882 | $5,226 |
Amount outstanding | 6,621 | 5,979 |
Current portion of long-term debt, weighted average interest rate (as a percent) | 2.70% | 2.80% |
Commercial paper | ' | ' |
Notes Payable and Short-Term Borrowings | ' | ' |
Short term borrowings | 308 | 327 |
Weighted average interest rate (as a percent) | 0.40% | 0.40% |
Commercial paper | HPFS and its subsidiaries | ' | ' |
Notes Payable and Short-Term Borrowings | ' | ' |
Short term borrowings | 308 | 327 |
Obligation related to notes payable to banks, lines of credit, uncommitted line of credit and other debt | ' | ' |
Notes Payable and Short-Term Borrowings | ' | ' |
Short term borrowings | 431 | 426 |
Weighted average interest rate (as a percent) | 3.70% | 1.70% |
Obligation related to notes payable to banks, lines of credit, uncommitted line of credit and other debt | HPFS and its subsidiaries | ' | ' |
Notes Payable and Short-Term Borrowings | ' | ' |
Short term borrowings | $389 | $368 |
Borrowings_Details_2
Borrowings (Details 2) (USD $) | 3 Months Ended | 12 Months Ended |
In Millions, unless otherwise specified | Jan. 31, 2014 | Oct. 31, 2013 |
Long-term debt | ' | ' |
Total | $17,971 | $16,608 |
Fair value adjustment related to hedged debt | 115 | 147 |
Less: current portion | -5,882 | -5,226 |
U.S. Dollar Global Notes | ' | ' |
Long-term debt | ' | ' |
Total | 22,684 | 20,684 |
2006 Shelf Registration Statement-$500 issued at discount to par at a price of 99.694% in February 2007 at 5.4%, due March 2017 | ' | ' |
Long-term debt | ' | ' |
Total | 499 | 499 |
Discount to par (as a percent) | 99.69% | 99.69% |
Interest rate (as a percent) | 5.40% | 5.40% |
Face amount of debt instrument | 500 | 500 |
2006 Shelf Registration Statement-$750 issued at discount to par at a price of 99.932% in March 2008 at 5.5%, due March 2018 | ' | ' |
Long-term debt | ' | ' |
Total | 750 | 750 |
Discount to par (as a percent) | 99.93% | 99.93% |
Interest rate (as a percent) | 5.50% | 5.50% |
Face amount of debt instrument | 750 | 750 |
2006 Shelf Registration Statement-$2,000 issued at discount to par at a price of 99.561% in December 2008 at 6.125%, paid March 2014 | ' | ' |
Long-term debt | ' | ' |
Total | 2,000 | 1,999 |
Discount to par (as a percent) | 99.56% | 99.56% |
Interest rate (as a percent) | 6.13% | 6.13% |
Face amount of debt instrument | 2,000 | 2,000 |
2006 Shelf Registration Statement-$1,500 issued at discount to par at a price of 99.993% in February 2009 at 4.75%, due June 2014 | ' | ' |
Long-term debt | ' | ' |
Total | 1,500 | 1,500 |
Discount to par (as a percent) | 99.99% | 99.99% |
Interest rate (as a percent) | 4.75% | 4.75% |
Face amount of debt instrument | 1,500 | 1,500 |
2009 Shelf Registration Statement-$1,100 issued at discount to par at a price of 99.887% in September 2010 at 2.125%, due September 2015 | ' | ' |
Long-term debt | ' | ' |
Total | 1,100 | 1,100 |
Discount to par (as a percent) | 99.89% | 99.89% |
Interest rate (as a percent) | 2.13% | 2.13% |
Face amount of debt instrument | 1,100 | 1,100 |
2009 Shelf Registration Statement-$650 issued at discount to par at a price of 99.911% in December 2010 at 2.2%, due December 2015 | ' | ' |
Long-term debt | ' | ' |
Total | 650 | 650 |
Discount to par (as a percent) | 99.91% | 99.91% |
Interest rate (as a percent) | 2.20% | 2.20% |
Face amount of debt instrument | 650 | 650 |
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 | ' | ' |
Total | 1,349 | 1,349 |
Discount to par (as a percent) | 99.83% | 99.83% |
Interest rate (as a percent) | 3.75% | 3.75% |
Face amount of debt instrument | 1,350 | 1,350 |
2009 Shelf Registration Statement-$500 issued at par in May 2011 at three month USD LIBOR plus 0.4%, due May 2014 | ' | ' |
Long-term debt | ' | ' |
Total | 500 | 500 |
Face amount of debt instrument | 500 | 500 |
Reference interest rate | 'three-month USD LIBOR | 'three-month USD LIBOR |
Spread on reference interest rate (as a percent) | 0.40% | 0.40% |
2009 Shelf Registration Statement-$500 issued at discount to par at a price of 99.971% in May 2011 at 1.55%, due May 2014 | ' | ' |
Long-term debt | ' | ' |
Total | 500 | 500 |
Discount to par (as a percent) | 99.97% | 99.97% |
Interest rate (as a percent) | 1.55% | 1.55% |
Face amount of debt instrument | 500 | 500 |
2009 Shelf Registration Statement-$1,000 issued at discount to par at a price of 99.958% in May 2011 at 2.65%, due June 2016 | ' | ' |
Long-term debt | ' | ' |
Total | 1,000 | 1,000 |
Discount to par (as a percent) | 99.96% | 99.96% |
Interest rate (as a percent) | 2.65% | 2.65% |
Face amount of debt instrument | 1,000 | 1,000 |
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 | ' | ' |
Total | 1,248 | 1,248 |
Discount to par (as a percent) | 99.80% | 99.80% |
Interest rate (as a percent) | 4.30% | 4.30% |
Face amount of debt instrument | 1,250 | 1,250 |
2009 Shelf Registration Statement-$750 issued at discount to par at a price of 99.977% in September 2011 at 2.35%, due March 2015 | ' | ' |
Long-term debt | ' | ' |
Total | 750 | 750 |
Discount to par (as a percent) | 99.98% | 99.98% |
Interest rate (as a percent) | 2.35% | 2.35% |
Face amount of debt instrument | 750 | 750 |
2009 Shelf Registration Statement-$1,300 issued at discount to par at a price of 99.784% in September 2011 at 3.0%, due September 2016 | ' | ' |
Long-term debt | ' | ' |
Total | 1,298 | 1,298 |
Discount to par (as a percent) | 99.78% | 99.78% |
Interest rate (as a percent) | 3.00% | 3.00% |
Face amount of debt instrument | 1,300 | 1,300 |
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 | ' | ' |
Total | 999 | 999 |
Discount to par (as a percent) | 99.82% | 99.82% |
Interest rate (as a percent) | 4.38% | 4.38% |
Face amount of debt instrument | 1,000 | 1,000 |
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 | ' | ' |
Total | 1,198 | 1,198 |
Discount to par (as a percent) | 99.86% | 99.86% |
Interest rate (as a percent) | 6.00% | 6.00% |
Face amount of debt instrument | 1,200 | 1,200 |
2009 Shelf Registration Statement-$350 issued at par in September 2011 at three month USD LIBOR plus 1.55%, due September 2014 | ' | ' |
Long-term debt | ' | ' |
Total | 350 | 350 |
Face amount of debt instrument | 350 | 350 |
Reference interest rate | 'three-month USD LIBOR | 'three-month USD LIBOR |
Spread on reference interest rate (as a percent) | 1.55% | 1.55% |
2009 Shelf Registration Statement-$650 issued at discount to par at a price of 99.946% in December 2011 at 2.625%, due December 2014 | ' | ' |
Long-term debt | ' | ' |
Total | 650 | 650 |
Discount to par (as a percent) | 99.95% | 99.95% |
Interest rate (as a percent) | 2.63% | 2.63% |
Face amount of debt instrument | 650 | 650 |
2009 Shelf Registration Statement-$850 issued at discount to par at a price of 99.790% in December 2011 at 3.3%, due December 2016 | ' | ' |
Long-term debt | ' | ' |
Total | 849 | 849 |
Discount to par (as a percent) | 99.79% | 99.79% |
Interest rate (as a percent) | 3.30% | 3.30% |
Face amount of debt instrument | 850 | 850 |
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 | ' | ' |
Total | 1,496 | 1,496 |
Discount to par (as a percent) | 99.71% | 99.71% |
Interest rate (as a percent) | 4.65% | 4.65% |
Face amount of debt instrument | 1,500 | 1,500 |
2009 Shelf Registration Statement-$1,500 issued at discount to par at a price of 99.985% in March 2012 at 2.6%, due September 2017 | ' | ' |
Long-term debt | ' | ' |
Total | 1,500 | 1,500 |
Discount to par (as a percent) | 99.99% | 99.99% |
Interest rate (as a percent) | 2.60% | 2.60% |
Face amount of debt instrument | 1,500 | 1,500 |
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 | ' | ' |
Total | 499 | 499 |
Discount to par (as a percent) | 99.77% | 99.77% |
Interest rate (as a percent) | 4.05% | 4.05% |
Face amount of debt instrument | 500 | 500 |
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 | ' | ' |
Total | 750 | ' |
Face amount of debt instrument | 750 | ' |
Reference interest rate | 'three-month Libor | ' |
Spread on reference interest rate (as a 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 | ' | ' |
Total | 1,249 | ' |
Discount to par (as a percent) | 99.95% | ' |
Interest rate (as a percent) | 2.75% | ' |
Face amount of debt instrument | 1,250 | ' |
EDS Senior Notes-$300 issued October 1999 at 7.45%, due October 2029 | ' | ' |
Long-term debt | ' | ' |
Total | 314 | 314 |
Interest rate (as a percent) | 7.45% | 7.45% |
Face amount of debt instrument | 300 | 300 |
Other, including capital lease obligations, at 0.00%-8.50%, due in calendar years 2014-2024 | ' | ' |
Long-term debt | ' | ' |
Other, including capital lease obligations | 740 | 689 |
Minimum interest rate (as a percent) | 0.00% | 0.00% |
Maximum interest rate (as a percent) | 8.50% | 8.50% |
Other, including capital lease obligations, at 0.00%-8.50%, due in calendar years 2014-2024 | HPFS and its subsidiaries | ' | ' |
Long-term debt | ' | ' |
Other, including capital lease obligations | $211 | $244 |
Borrowings_Details_3
Borrowings (Details 3) (USD $) | 3 Months Ended | 3 Months Ended | 3 Months Ended | ||||||||
Jan. 31, 2014 | Jan. 31, 2013 | Jan. 31, 2014 | Jan. 31, 2014 | Sep. 30, 2012 | Sep. 30, 2012 | Jan. 31, 2014 | Jan. 31, 2014 | Jan. 31, 2014 | Sep. 30, 2012 | Jan. 31, 2014 | |
Credit facilities | Credit facility expiring March 2017 | Credit facility expiring March 2017 | Credit facility expiring March 2017 | Credit facility expired February 2015 | Commercial paper | Commercial paper | Commercial paper | Hewlett-Packard International Bank PLC | |||
Euro | GBP | item | U.S. program | Euro program | Commercial paper | ||||||
Euro Commercial Paper/Certificate of Deposit Programme | |||||||||||
Debt instruments | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of commercial paper programs | ' | ' | ' | ' | ' | ' | ' | 2 | ' | ' | ' |
Commercial paper authorization by HP | ' | ' | ' | ' | $2,200,000,000 | $300,000,000 | ' | $16,000,000,000 | $16,000,000,000 | $3,000,000,000 | $500,000,000 |
Amount of additional commercial paper authorization for subsidiaries | ' | ' | ' | ' | ' | ' | ' | 1,000,000,000 | ' | ' | ' |
Amount available under credit facility | ' | ' | 7,500,000,000 | 3,000,000,000 | ' | ' | 4,500,000,000 | ' | ' | ' | ' |
Term of credit facility | ' | ' | ' | '5 years | ' | ' | '4 years | ' | ' | ' | ' |
Available borrowing resources, other than 2012 Shelf Registration | 17,600,000,000 | ' | 1,400,000,000 | ' | ' | ' | ' | 16,200,000,000 | ' | ' | ' |
Interest expense on borrowings recognized in Consolidated Condensed Statements of Earnings | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Financing interest | 72,000,000 | 80,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest expense | 99,000,000 | 122,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total interest expense | $171,000,000 | $202,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 3 Months Ended | ||
Jan. 31, 2014 | Jan. 31, 2013 | Oct. 31, 2013 | |
item | |||
Income Taxes | ' | ' | ' |
Effective tax rate (as a percent) | 22.30% | 21.70% | ' |
U.S. federal statutory tax rate (as a percent) | 35.00% | ' | ' |
Net tax charges related to discrete items | $22,000,000 | $5,000,000 | ' |
Various tax charges related to discrete items | 37,000,000 | ' | ' |
Estimated tax benefits associated with restructuring charges, various uncertain tax positions and valuation allowance adjustments | ' | 45,000,000 | ' |
Tax benefits from restructuring charges | 15,000,000 | ' | ' |
Tax charge recorded related to a past uncertain tax position | ' | 150,000,000 | ' |
Tax benefits for various adjustments to estimated tax provisions of foreign jurisdictions | ' | 50,000,000 | ' |
Tax benefit arising from the retroactive research and development credit | ' | 50,000,000 | ' |
Number of countries other than the United States where the entity is subject to income tax | 80 | ' | ' |
Unrecognized tax benefits | 3,500,000,000 | ' | ' |
Unrecognized tax benefits that would affect effective tax rate if realized | 1,800,000,000 | ' | ' |
Accrued income tax payable for interest and penalties | 212,000,000 | ' | ' |
Likelihood of no resolution period | '12 months | ' | ' |
Likelihood of conclusion period for certain federal, foreign and state tax issues | '12 months | ' | ' |
Reasonably possible reduction in existing unrecognized tax benefits within the next 12 months | 1,200,000,000 | ' | ' |
Current and long-term deferred tax assets and deferred tax liabilities | ' | ' | ' |
Current deferred tax assets | 3,362,000,000 | ' | 3,893,000,000 |
Current deferred tax liabilities | -454,000,000 | ' | -375,000,000 |
Long-term deferred tax assets | 1,253,000,000 | ' | 1,346,000,000 |
Long-term deferred tax liabilities | -2,131,000,000 | ' | -2,668,000,000 |
Net deferred tax position | $2,030,000,000 | ' | $2,196,000,000 |
Stockholders_Equity_Details
Stockholders' Equity (Details) (USD $) | 3 Months Ended | |
Share data in Millions, unless otherwise specified | Jan. 31, 2014 | Jan. 31, 2013 |
Stockholders' Equity | ' | ' |
Repurchases of common stock (in shares) | 21 | 19 |
Share repurchases settled | 20 | ' |
Payment in connection with repurchases of shares | $565,000,000 | $253,000,000 |
Share repurchases that will be settled in the second quarter of 2014 | 1 | ' |
Share repurchase authorization remaining | 7,100,000,000 | ' |
Reclassifications and Taxes related to Items of Other Comprehensive Income (Loss) | ' | ' |
Other comprehensive income (loss) | 111,000,000 | -113,000,000 |
Amounts reclassified from accumulated other comprehensive income | 125,000,000 | ' |
Other comprehensive income (loss), before reclassification | -14,000,000 | ' |
Net revenue | 28,154,000,000 | 28,359,000,000 |
Cost of products | 14,525,000,000 | 14,031,000,000 |
Interest and other, net | -163,000,000 | -179,000,000 |
Unrealized gains (losses) on available-for-sale securities | ' | ' |
Reclassifications and Taxes related to Items of Other Comprehensive Income (Loss) | ' | ' |
Other comprehensive income (loss) | -1,000,000 | -30,000,000 |
Amounts reclassified from accumulated other comprehensive income | -1,000,000 | ' |
Other comprehensive income (loss), Tax expense (benefit) | -1,000,000 | 33,000,000 |
Other comprehensive income (loss), before reclassification | ' | -30,000,000 |
Unrealized gains (losses) on available-for-sale securities | Reclassifications of losses (gains) into earnings | ' | ' |
Reclassifications and Taxes related to Items of Other Comprehensive Income (Loss) | ' | ' |
Amounts reclassified from accumulated other comprehensive income | -1,000,000 | ' |
Other comprehensive income (loss), Tax expense (benefit) | 0 | 0 |
Unrealized gains (losses) on cash flow hedges | ' | ' |
Reclassifications and Taxes related to Items of Other Comprehensive Income (Loss) | ' | ' |
Other comprehensive income (loss) | 105,000,000 | -165,000,000 |
Amounts reclassified from accumulated other comprehensive income | 75,000,000 | ' |
Other comprehensive income (loss), Tax expense (benefit) | 40,000,000 | -102,000,000 |
Other comprehensive income (loss), before reclassification | 30,000,000 | -212,000,000 |
Unrealized gains (losses) on cash flow hedges | Reclassifications of losses (gains) into earnings | ' | ' |
Reclassifications and Taxes related to Items of Other Comprehensive Income (Loss) | ' | ' |
Amounts reclassified from accumulated other comprehensive income | 75,000,000 | 47,000,000 |
Other comprehensive income (loss), Tax expense (benefit) | -34,000,000 | -17,000,000 |
Net revenue | 63,000,000 | 57,000,000 |
Cost of products | 23,000,000 | 3,000,000 |
Other operating expenses | 4,000,000 | -1,000,000 |
Interest and other, net | 19,000,000 | 5,000,000 |
Unrealized components of defined benefit plans | ' | ' |
Reclassifications and Taxes related to Items of Other Comprehensive Income (Loss) | ' | ' |
Other comprehensive income (loss) | 51,000,000 | 90,000,000 |
Amounts reclassified from accumulated other comprehensive income | 51,000,000 | ' |
Amortization of actuarial loss and prior service benefit | Reclassifications of losses (gains) into earnings | ' | ' |
Reclassifications and Taxes related to Items of Other Comprehensive Income (Loss) | ' | ' |
Amounts reclassified from accumulated other comprehensive income | 51,000,000 | 78,000,000 |
Other comprehensive income (loss), Tax expense (benefit) | -12,000,000 | -5,000,000 |
Curtailments, settlements and other | ' | ' |
Reclassifications and Taxes related to Items of Other Comprehensive Income (Loss) | ' | ' |
Other comprehensive income (loss) | ' | 12,000,000 |
Other comprehensive income (loss), Tax expense (benefit) | 0 | 1,000,000 |
Cumulative translation adjustment | ' | ' |
Reclassifications and Taxes related to Items of Other Comprehensive Income (Loss) | ' | ' |
Other comprehensive income (loss) | -44,000,000 | -8,000,000 |
Other comprehensive income (loss), Tax expense (benefit) | 20,000,000 | -18,000,000 |
Other comprehensive income (loss), before reclassification | ($44,000,000) | ($8,000,000) |
Stockholders_Equity_Details_2
Stockholders' Equity (Details 2) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Jan. 31, 2014 | Jan. 31, 2013 |
Components of accumulated other comprehensive loss, net of taxes | ' | ' |
Balance at the beginning of the period | ($3,778) | ' |
Other comprehensive income (loss) before reclassifications | -14 | ' |
Amounts reclassified from accumulated other comprehensive income | 125 | ' |
Balance at the end of the period | -3,667 | ' |
Net unrealized gain on available-for-sale securities | ' | ' |
Components of accumulated other comprehensive loss, net of taxes | ' | ' |
Balance at the beginning of the period | 76 | ' |
Other comprehensive income (loss) before reclassifications | ' | -30 |
Amounts reclassified from accumulated other comprehensive income | -1 | ' |
Balance at the end of the period | 75 | ' |
Net unrealized loss on cash flow hedges | ' | ' |
Components of accumulated other comprehensive loss, net of taxes | ' | ' |
Balance at the beginning of the period | -188 | ' |
Other comprehensive income (loss) before reclassifications | 30 | -212 |
Amounts reclassified from accumulated other comprehensive income | 75 | ' |
Balance at the end of the period | -83 | ' |
Unrealized components of defined benefit plans | ' | ' |
Components of accumulated other comprehensive loss, net of taxes | ' | ' |
Balance at the beginning of the period | -3,084 | ' |
Amounts reclassified from accumulated other comprehensive income | 51 | ' |
Balance at the end of the period | -3,033 | ' |
Cumulative translation adjustment | ' | ' |
Components of accumulated other comprehensive loss, net of taxes | ' | ' |
Balance at the beginning of the period | -582 | ' |
Other comprehensive income (loss) before reclassifications | -44 | -8 |
Balance at the end of the period | ($626) | ' |
Retirement_and_PostRetirement_2
Retirement and Post-Retirement Benefit Plans (Details) (USD $) | 3 Months Ended | 12 Months Ended | |
In Millions, unless otherwise specified | Jan. 31, 2014 | Jan. 31, 2013 | Oct. 31, 2013 |
U.S. Defined Benefit Plans | ' | ' | ' |
Net benefit costs | ' | ' | ' |
Interest cost | $142 | $140 | ' |
Expected return on plan assets | -203 | -211 | ' |
Amortization and deferrals: | ' | ' | ' |
Actuarial loss (gain) | 4 | 20 | ' |
Net periodic benefit (credit) cost | -57 | -51 | ' |
Settlement loss | ' | 5 | ' |
Net benefit (credit) cost | -57 | -46 | ' |
Non-U.S. Defined Benefit Plans | ' | ' | ' |
Net benefit costs | ' | ' | ' |
Service cost | 78 | 86 | ' |
Interest cost | 183 | 172 | ' |
Expected return on plan assets | -282 | -257 | ' |
Amortization and deferrals: | ' | ' | ' |
Actuarial loss (gain) | 78 | 87 | ' |
Prior service benefit | -6 | -7 | ' |
Net periodic benefit (credit) cost | 51 | 81 | ' |
Special termination benefits | 6 | 3 | ' |
Net benefit (credit) cost | 57 | 84 | ' |
Employer Contributions and Funding Policy | ' | ' | ' |
Expected contribution to defined benefit plans in fiscal 2014 | ' | ' | 617 |
Contributions to benefit plans | 72 | ' | ' |
Expected contribution to benefit plans as of balance sheet date | 545 | ' | ' |
U.S. non-qualified plan participants | ' | ' | ' |
Employer Contributions and Funding Policy | ' | ' | ' |
Expected contribution to defined benefit plans in fiscal 2014 | ' | ' | 33 |
Contributions to benefit plans | 6 | ' | ' |
Expected contribution to benefit plans as of balance sheet date | 27 | ' | ' |
Post-Retirement Benefit Plans | ' | ' | ' |
Net benefit costs | ' | ' | ' |
Service cost | 1 | 2 | ' |
Interest cost | 8 | 8 | ' |
Expected return on plan assets | -8 | -8 | ' |
Amortization and deferrals: | ' | ' | ' |
Actuarial loss (gain) | -3 | ' | ' |
Prior service benefit | -10 | -17 | ' |
Net periodic benefit (credit) cost | -12 | -15 | ' |
Curtailment gain | ' | -3 | ' |
Special termination benefits | -11 | ' | ' |
Net benefit (credit) cost | -23 | -18 | ' |
Employer Contributions and Funding Policy | ' | ' | ' |
Expected contribution to defined benefit plans in fiscal 2014 | ' | ' | 109 |
Contributions to benefit plans | 26 | ' | ' |
Expected contribution to benefit plans as of balance sheet date | $83 | ' | ' |
Litigation_and_Contingencies_D
Litigation and Contingencies (Details) | 0 Months Ended | 1 Months Ended | 0 Months Ended | 72 Months Ended | 3 Months Ended | 1 Months Ended | 9 Months Ended | 3 Months Ended | ||||||||||
Dec. 23, 2004 | Jan. 31, 2014 | Dec. 14, 2010 | Oct. 31, 2012 | Nov. 30, 2012 | 10-May-10 | Apr. 29, 2010 | Jan. 24, 2013 | Dec. 11, 2012 | Apr. 21, 2012 | Apr. 20, 2012 | Apr. 11, 2012 | Oct. 31, 2006 | Jan. 31, 2014 | Jul. 31, 2011 | Jul. 31, 2013 | Jul. 31, 2013 | Oct. 31, 2012 | |
USD ($) | Fair Labor Standards Act Litigation | State of South Carolina Department of Social Services Contract Dispute | State of South Carolina Department of Social Services Contract Dispute | India Directorate of Revenue Intelligence Proceedings | India Directorate of Revenue Intelligence Proceedings | Bangalore Commissioner of Customs | Bangalore Commissioner of Customs | Bangalore Commissioner of Customs | Bangalore Commissioner of Customs | Bangalore Commissioner of Customs | Russia GPO and Other FCPA Investigations | Russia GPO and Other FCPA Investigations | ECT Proceedings | ECT Proceedings | ECT Proceedings | Autonomy-Related Legal Matters | ||
employee | USD ($) | Minimum | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | EUR (€) | Maximum | Minimum | Maximum | Software | ||||
code | USD ($) | USD ($) | USD ($) | |||||||||||||||
Copyright Levies | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Levy assessed on a specific vendor on personal computers sold since March 2001 in Germany (euros per unit) | 12 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Litigation and Contingencies | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Copyright levies payable on sales of MFDs in Belgium | ' | $0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of job codes | ' | ' | 20 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of employees filed consent to opt-in to litigation | ' | ' | 2,600 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Aggregate damages sought | ' | ' | ' | 275,000,000 | ' | 370,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amount of payment to be made for past-due invoices by plaintiff | ' | ' | ' | ' | 12,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Loss contingency deposit to prevent interruption of business | ' | ' | ' | ' | ' | ' | 16,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Duties and penalties under show cause notices | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 17,000,000 | 386,000,000 | ' | ' | ' | ' | ' | ' |
Amount deposited under show cause notice prior to order | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 7,000,000 | 9,000,000 | ' | ' | ' | ' | ' | ' |
Additional amount deposited against products-related show cause notice | ' | ' | ' | ' | ' | ' | ' | ' | 10,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Additional amount deposited against parts-related show cause notice | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3,000,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Additional amount deposited against product order | ' | ' | ' | ' | ' | ' | ' | 24,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Transaction of former subsidiary under investigation | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 35,000,000 | ' | ' | ' | ' | ' |
Civil penalties per violation | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 725,000 | ' | ' | ' | ' |
Criminal penalties per violation, specific value | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 25,000,000 | ' | ' | ' | ' |
ETC Proceedings, period to suspend right to bid and contract | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '5 years | ' | ' | ' |
Length of sanctions | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '2 years | '5 years | ' |
Impairment of goodwill and intangible assets | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $8,800,000,000 |
Segment_Information_Details
Segment Information (Details) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Jan. 31, 2014 | Jan. 31, 2013 |
segment | ||
Segment Information | ' | ' |
Number of reportable segments | 7 | ' |
Segment Reporting Information | ' | ' |
Net revenue | $28,154 | $28,359 |
Earnings (loss) from operations | 1,997 | 1,752 |
Eliminations of inter-segment net revenue and other | ' | ' |
Segment Reporting Information | ' | ' |
Net revenue | -853 | -717 |
Operating segments | ' | ' |
Segment Reporting Information | ' | ' |
Net revenue | 29,007 | 29,076 |
Earnings (loss) from operations | 2,688 | 2,529 |
Enterprise Group | ' | ' |
Segment Reporting Information | ' | ' |
Net revenue | 6,791 | 6,748 |
Enterprise Group | Eliminations of inter-segment net revenue and other | ' | ' |
Segment Reporting Information | ' | ' |
Net revenue | -202 | -200 |
Enterprise Group | Operating segments | ' | ' |
Segment Reporting Information | ' | ' |
Net revenue | 6,993 | 6,948 |
Earnings (loss) from operations | 1,006 | 1,070 |
Enterprise Services | ' | ' |
Segment Reporting Information | ' | ' |
Net revenue | 5,283 | 5,792 |
Enterprise Services | Eliminations of inter-segment net revenue and other | ' | ' |
Segment Reporting Information | ' | ' |
Net revenue | -312 | -246 |
Enterprise Services | Operating segments | ' | ' |
Segment Reporting Information | ' | ' |
Net revenue | 5,595 | 6,038 |
Earnings (loss) from operations | 57 | 76 |
Software | ' | ' |
Segment Reporting Information | ' | ' |
Net revenue | 846 | 897 |
Software | Eliminations of inter-segment net revenue and other | ' | ' |
Segment Reporting Information | ' | ' |
Net revenue | -70 | -54 |
Software | Operating segments | ' | ' |
Segment Reporting Information | ' | ' |
Net revenue | 916 | 951 |
Earnings (loss) from operations | 145 | 155 |
HP Financial Services | ' | ' |
Segment Reporting Information | ' | ' |
Net revenue | 854 | 946 |
HP Financial Services | Eliminations of inter-segment net revenue and other | ' | ' |
Segment Reporting Information | ' | ' |
Net revenue | -16 | -11 |
HP Financial Services | Operating segments | ' | ' |
Segment Reporting Information | ' | ' |
Net revenue | 870 | 957 |
Earnings (loss) from operations | 101 | 101 |
Corporate Investments | ' | ' |
Segment Reporting Information | ' | ' |
Net revenue | 288 | 4 |
Corporate Investments | Operating segments | ' | ' |
Segment Reporting Information | ' | ' |
Net revenue | 288 | 4 |
Earnings (loss) from operations | 121 | -73 |
Personal Systems and Printing | Operating segments | ' | ' |
Segment Reporting Information | ' | ' |
Net revenue | 14,345 | 14,178 |
Personal Systems and Printing | Personal Systems | ' | ' |
Segment Reporting Information | ' | ' |
Net revenue | 8,310 | 8,068 |
Personal Systems and Printing | Personal Systems | Eliminations of inter-segment net revenue and other | ' | ' |
Segment Reporting Information | ' | ' |
Net revenue | -220 | -164 |
Personal Systems and Printing | Personal Systems | Operating segments | ' | ' |
Segment Reporting Information | ' | ' |
Net revenue | 8,530 | 8,232 |
Earnings (loss) from operations | 279 | 233 |
Personal Systems and Printing | Printing | ' | ' |
Segment Reporting Information | ' | ' |
Net revenue | 5,782 | 5,904 |
Personal Systems and Printing | Printing | Eliminations of inter-segment net revenue and other | ' | ' |
Segment Reporting Information | ' | ' |
Net revenue | -33 | -42 |
Personal Systems and Printing | Printing | Operating segments | ' | ' |
Segment Reporting Information | ' | ' |
Net revenue | 5,815 | 5,946 |
Earnings (loss) from operations | $979 | $967 |
Segment_Information_Details_2
Segment Information (Details 2) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Jan. 31, 2014 | Jan. 31, 2013 |
Segment Reporting Information | ' | ' |
Net Revenue | $28,154 | $28,359 |
Earnings (Loss) from operations | 1,997 | 1,752 |
Unallocated costs related to stock-based compensation expense | -170 | -184 |
Amortization of intangible assets | -283 | -350 |
Restructuring charges | -114 | -130 |
Interest and other, net | -163 | -179 |
Earnings before taxes | 1,834 | 1,573 |
Operating segments | ' | ' |
Segment Reporting Information | ' | ' |
Net Revenue | 29,007 | 29,076 |
Earnings (Loss) from operations | 2,688 | 2,529 |
Elimination of intersegment net revenue and other | ' | ' |
Segment Reporting Information | ' | ' |
Net Revenue | -853 | -717 |
Significant Reconciling Items | ' | ' |
Segment Reporting Information | ' | ' |
Corporate and unallocated costs and eliminations | -121 | -109 |
Unallocated costs related to stock-based compensation expense | -170 | -184 |
Amortization of intangible assets | -283 | -350 |
Restructuring charges | -114 | -130 |
Acquisition-related charges | -3 | -4 |
Interest and other, net | ($163) | ($179) |
Segment_Information_Details_3
Segment Information (Details 3) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Jan. 31, 2014 | Jan. 31, 2013 |
Segment Reporting Information | ' | ' |
Net revenue | $28,154 | $28,359 |
Operating segments | ' | ' |
Segment Reporting Information | ' | ' |
Net revenue | 29,007 | 29,076 |
Eliminations of inter-segment net revenue and other | ' | ' |
Segment Reporting Information | ' | ' |
Net revenue | -853 | -717 |
Enterprise Group | ' | ' |
Segment Reporting Information | ' | ' |
Net revenue | 6,791 | 6,748 |
Enterprise Group | Operating segments | ' | ' |
Segment Reporting Information | ' | ' |
Net revenue | 6,993 | 6,948 |
Enterprise Group | Operating segments | Industry Standard Servers | ' | ' |
Segment Reporting Information | ' | ' |
Net revenue | 3,178 | 2,994 |
Enterprise Group | Operating segments | Technology Services | ' | ' |
Segment Reporting Information | ' | ' |
Net revenue | 2,123 | 2,207 |
Enterprise Group | Operating segments | Storage | ' | ' |
Segment Reporting Information | ' | ' |
Net revenue | 834 | 833 |
Enterprise Group | Operating segments | Networking | ' | ' |
Segment Reporting Information | ' | ' |
Net revenue | 630 | 608 |
Enterprise Group | Operating segments | Business Critical Systems | ' | ' |
Segment Reporting Information | ' | ' |
Net revenue | 228 | 306 |
Enterprise Group | Eliminations of inter-segment net revenue and other | ' | ' |
Segment Reporting Information | ' | ' |
Net revenue | -202 | -200 |
Enterprise Services | ' | ' |
Segment Reporting Information | ' | ' |
Net revenue | 5,283 | 5,792 |
Enterprise Services | Operating segments | ' | ' |
Segment Reporting Information | ' | ' |
Net revenue | 5,595 | 6,038 |
Enterprise Services | Operating segments | Infrastructure Technology Outsourcing | ' | ' |
Segment Reporting Information | ' | ' |
Net revenue | 3,501 | 3,855 |
Enterprise Services | Operating segments | Application and Business Services | ' | ' |
Segment Reporting Information | ' | ' |
Net revenue | 2,094 | 2,183 |
Enterprise Services | Eliminations of inter-segment net revenue and other | ' | ' |
Segment Reporting Information | ' | ' |
Net revenue | -312 | -246 |
Software | ' | ' |
Segment Reporting Information | ' | ' |
Net revenue | 846 | 897 |
Software | Operating segments | ' | ' |
Segment Reporting Information | ' | ' |
Net revenue | 916 | 951 |
Software | Eliminations of inter-segment net revenue and other | ' | ' |
Segment Reporting Information | ' | ' |
Net revenue | -70 | -54 |
HP Financial Services | ' | ' |
Segment Reporting Information | ' | ' |
Net revenue | 854 | 946 |
HP Financial Services | Operating segments | ' | ' |
Segment Reporting Information | ' | ' |
Net revenue | 870 | 957 |
HP Financial Services | Eliminations of inter-segment net revenue and other | ' | ' |
Segment Reporting Information | ' | ' |
Net revenue | -16 | -11 |
Corporate Investments | ' | ' |
Segment Reporting Information | ' | ' |
Net revenue | 288 | 4 |
Corporate Investments | Operating segments | ' | ' |
Segment Reporting Information | ' | ' |
Net revenue | 288 | 4 |
Personal Systems and Printing | Operating segments | ' | ' |
Segment Reporting Information | ' | ' |
Net revenue | 14,345 | 14,178 |
Personal Systems and Printing | Personal Systems | ' | ' |
Segment Reporting Information | ' | ' |
Net revenue | 8,310 | 8,068 |
Personal Systems and Printing | Personal Systems | Operating segments | ' | ' |
Segment Reporting Information | ' | ' |
Net revenue | 8,530 | 8,232 |
Personal Systems and Printing | Personal Systems | Operating segments | Notebooks | ' | ' |
Segment Reporting Information | ' | ' |
Net revenue | 4,335 | 4,128 |
Personal Systems and Printing | Personal Systems | Operating segments | Desktops | ' | ' |
Segment Reporting Information | ' | ' |
Net revenue | 3,274 | 3,321 |
Personal Systems and Printing | Personal Systems | Operating segments | Workstations | ' | ' |
Segment Reporting Information | ' | ' |
Net revenue | 533 | 535 |
Personal Systems and Printing | Personal Systems | Operating segments | Other | ' | ' |
Segment Reporting Information | ' | ' |
Net revenue | 388 | 248 |
Personal Systems and Printing | Personal Systems | Eliminations of inter-segment net revenue and other | ' | ' |
Segment Reporting Information | ' | ' |
Net revenue | -220 | -164 |
Personal Systems and Printing | Printing | ' | ' |
Segment Reporting Information | ' | ' |
Net revenue | 5,782 | 5,904 |
Personal Systems and Printing | Printing | Operating segments | ' | ' |
Segment Reporting Information | ' | ' |
Net revenue | 5,815 | 5,946 |
Personal Systems and Printing | Printing | Operating segments | Supplies | ' | ' |
Segment Reporting Information | ' | ' |
Net revenue | 3,795 | 3,893 |
Personal Systems and Printing | Printing | Operating segments | Commercial Hardware | ' | ' |
Segment Reporting Information | ' | ' |
Net revenue | 1,347 | 1,374 |
Personal Systems and Printing | Printing | Operating segments | Consumer Hardware | ' | ' |
Segment Reporting Information | ' | ' |
Net revenue | 673 | 679 |
Personal Systems and Printing | Printing | Eliminations of inter-segment net revenue and other | ' | ' |
Segment Reporting Information | ' | ' |
Net revenue | ($33) | ($42) |