Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Oct. 31, 2015 | Nov. 30, 2015 | Apr. 30, 2015 | |
Document and Entity Information | |||
Entity Registrant Name | HP Inc. | ||
Entity Central Index Key | 47,217 | ||
Document Type | 10-K | ||
Document Period End Date | Oct. 31, 2015 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --10-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 59,551,395,919 | ||
Entity Common Stock, Shares Outstanding | 1,791,848,366 | ||
Document Fiscal Year Focus | 2,015 | ||
Document Fiscal Period Focus | FY |
Consolidated Statements of Earn
Consolidated Statements of Earnings - USD ($) shares in Millions, $ in Millions | 12 Months Ended | ||
Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2013 | |
Net revenue: | |||
Products | $ 69,032 | $ 73,726 | $ 72,398 |
Services | 33,962 | 37,327 | 39,453 |
Financing income | 361 | 401 | 447 |
Total net revenue | 103,355 | 111,454 | 112,298 |
Costs and expenses: | |||
Cost of products | 53,081 | 56,469 | 55,632 |
Cost of services | 25,275 | 28,093 | 30,436 |
Financing interest | 240 | 277 | 312 |
Research and development | 3,502 | 3,447 | 3,135 |
Selling, general and administrative | 12,185 | 13,353 | 13,267 |
Amortization of intangible assets | 931 | 1,000 | 1,373 |
Restructuring charges | 1,017 | 1,619 | 990 |
Acquisition and other related charges | 90 | 11 | 22 |
Separation costs | 1,259 | ||
Defined benefit plan settlement charges | 168 | ||
Impairment of data center assets | 136 | ||
Total operating expenses | 97,884 | 104,269 | 105,167 |
Earnings from operations | 5,471 | 7,185 | 7,131 |
Interest and other, net | (739) | (628) | (621) |
Earnings before taxes | 4,732 | 6,557 | 6,510 |
Provision for taxes | (178) | (1,544) | (1,397) |
Net earnings | $ 4,554 | $ 5,013 | $ 5,113 |
Net earnings per share: | |||
Basic (in dollars per share) | $ 2.51 | $ 2.66 | $ 2.64 |
Diluted (in dollars per share) | $ 2.48 | $ 2.62 | $ 2.62 |
Weighted-average shares used to compute net earnings per share: | |||
Basic (in shares) | 1,814 | 1,882 | 1,934 |
Diluted (in shares) | 1,836 | 1,912 | 1,950 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2013 | |
Consolidated Condensed Statements of Comprehensive Income | |||
Net earnings | $ 4,554 | $ 5,013 | $ 5,113 |
Change in unrealized (losses) gains on available-for-sale securities: | |||
Unrealized (losses) gains arising during the period | (17) | 7 | 52 |
Gains reclassified into earnings | (1) | (49) | |
Change in unrealized (losses) gains on available-for-sale securities | (17) | 6 | 3 |
Change in unrealized (losses) gains on cash flow hedges: | |||
Unrealized gains (losses) arising during the period | 1,091 | 337 | (243) |
(Gains) losses reclassified into earnings | (1,312) | 151 | 106 |
Change in unrealized (losses) gains on cash flow hedges | (221) | 488 | (137) |
Change in unrealized components of defined benefit plans: | |||
(Losses) gains arising during the period | (548) | (2,756) | 1,953 |
Amortization of actuarial loss and prior service benefit | 443 | 259 | 326 |
Curtailments, settlements and other | 115 | 51 | 25 |
Change in unrealized components of defined benefit plans | 10 | (2,446) | 2,304 |
Change in cumulative translation adjustment | (207) | (85) | (150) |
Other comprehensive (loss) income before taxes | (435) | (2,037) | 2,020 |
Benefit (provision) for taxes | 14 | (66) | (239) |
Other comprehensive (loss) income, net of taxes | (421) | (2,103) | 1,781 |
Comprehensive income | $ 4,133 | $ 2,910 | $ 6,894 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Oct. 31, 2015 | Oct. 31, 2014 |
Current assets: | ||
Cash and cash equivalents | $ 17,433 | $ 15,133 |
Accounts receivable | 13,363 | 13,832 |
Financing receivables | 2,918 | 2,946 |
Inventory | 6,485 | 6,415 |
Other current assets | 11,588 | 11,819 |
Total current assets | 51,787 | 50,145 |
Property, plant and equipment | 11,090 | 11,340 |
Long-term financing receivables and other assets | 9,050 | 8,454 |
Goodwill | 32,941 | 31,139 |
Intangible assets | 2,014 | 2,128 |
Total assets | 106,882 | 103,206 |
Current liabilities: | ||
Notes payable and short-term borrowings | 2,885 | 3,486 |
Accounts payable | 15,956 | 15,903 |
Employee compensation and benefits | 3,608 | 4,209 |
Taxes on earnings | 830 | 1,017 |
Deferred revenue | 6,199 | 6,143 |
Accrued restructuring | 689 | 898 |
Other accrued liabilities | 12,024 | 12,079 |
Total current liabilities | 42,191 | 43,735 |
Long-term debt | 21,780 | 16,039 |
Other liabilities | $ 14,760 | $ 16,305 |
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; 1,804 and 1,839 shares issued and outstanding at October 31, 2015 and 2014, respectively) | $ 18 | $ 18 |
Additional paid-in capital | 1,963 | 3,430 |
Retained earnings | 32,089 | 29,164 |
Accumulated other comprehensive loss | (6,302) | (5,881) |
Total HP stockholders' equity | 27,768 | 26,731 |
Non-controlling interests | 383 | 396 |
Total stockholders' equity | 28,151 | 27,127 |
Total liabilities and stockholders' equity | $ 106,882 | $ 103,206 |
Consolidated Condensed Balance
Consolidated Condensed Balance Sheets (Parenthetical) - $ / shares shares in Millions | Oct. 31, 2015 | Oct. 31, 2014 |
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 | 1,804 | 1,839 |
Common stock, shares outstanding | 1,804 | 1,839 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2013 | |
Cash flows from operating activities: | |||
Net earnings | $ 4,554 | $ 5,013 | $ 5,113 |
Adjustments to reconcile net earnings to net cash provided by operating activities: | |||
Depreciation and amortization | 4,061 | 4,334 | 4,611 |
Stock-based compensation expense | 709 | 560 | 500 |
Provision for doubtful accounts | 71 | 55 | 61 |
Provision for inventory | 305 | 211 | 275 |
Restructuring charges | 1,017 | 1,619 | 990 |
Deferred taxes on earnings | (700) | (34) | (410) |
Excess tax benefit from stock-based compensation | (145) | (58) | (2) |
Other, net | 1,031 | 81 | 443 |
Changes in operating assets and liabilities, net of acquisitions: | |||
Accounts receivable | 572 | 2,017 | 530 |
Financing receivables | (65) | 420 | 484 |
Inventory | (330) | (580) | (4) |
Accounts payable | 31 | 1,912 | 541 |
Taxes on earnings | (137) | 310 | 417 |
Restructuring | (1,243) | (1,506) | (904) |
Other assets and liabilities | (3,241) | (2,021) | (1,037) |
Net cash provided by operating activities | 6,490 | 12,333 | 11,608 |
Cash flows from investing activities: | |||
Investment in property, plant and equipment | (3,603) | (3,853) | (3,199) |
Proceeds from sale of property, plant and equipment | 424 | 843 | 653 |
Purchases of available-for-sale securities and other investments | (259) | (1,086) | (1,243) |
Maturities and sales of available-for-sale securities and other investments | 302 | 1,347 | 1,153 |
Payments made in connection with business acquisitions, net of cash acquired | (2,644) | (49) | (167) |
Proceeds from business divestitures, net | 246 | 6 | |
Net cash used in investing activities | (5,534) | (2,792) | (2,803) |
Cash flows from financing activities: | |||
Short-term borrowings with original maturities less than 90 days, net | 74 | 148 | (154) |
Proceeds from debt, net of issuance costs | 20,758 | 2,875 | 279 |
Payment of debt | (15,867) | (6,037) | (5,721) |
Settlement of cash flow hedges | (4) | ||
Issuance of common stock under employee stock plans | 371 | 297 | 288 |
Repurchase of common stock | (2,883) | (2,728) | (1,532) |
Excess tax benefit from stock-based compensation | 145 | 58 | 2 |
Cash dividends paid | (1,250) | (1,184) | (1,105) |
Net cash provided by (used in) financing activities | 1,344 | (6,571) | (7,943) |
Net increase in cash and cash equivalents | 2,300 | 2,970 | 862 |
Cash and cash equivalents at beginning of period | 15,133 | 12,163 | 11,301 |
Cash and cash equivalents at end of period | 17,433 | 15,133 | 12,163 |
Supplemental cash flow disclosures: | |||
Income taxes paid, net of refunds | 1,012 | 1,267 | 1,391 |
Interest expense paid | 532 | 678 | 837 |
Supplemental schedule of non-cash investing and financing activities: | |||
Purchase of assets under capital leases | 70 | $ 113 | $ 3 |
Stock awards assumed in business acquisitions | $ 31 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) shares in Thousands, $ in Millions | Total HP Stockholders' Equity | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive (Loss) Income | Non-controlling Interests | Total |
Balance at Oct. 31, 2012 | $ 22,436 | $ 20 | $ 6,454 | $ 21,521 | $ (5,559) | $ 397 | $ 22,833 |
Balance (in shares) at Oct. 31, 2012 | 1,962,838 | ||||||
Increase (Decrease) in Stockholders' Equity | |||||||
Net earnings (loss) | 5,113 | 5,113 | 5,113 | ||||
Other comprehensive income (loss), net of taxes | 1,781 | 1,781 | 1,781 | ||||
Comprehensive income | 6,894 | 6,894 | |||||
Issuance of common stock in connection with employee stock plans and other | 208 | 210 | (2) | 208 | |||
Issuance of common stock in connection with employee stock plans and other (in shares) | 22,950 | ||||||
Repurchases of common stock | (1,546) | $ (1) | (1,550) | 5 | $ (1,546) | ||
Repurchases of common stock (in shares) | (77,905) | (77,000) | |||||
Tax benefit (deficiency) from employee stock plans | (149) | (149) | $ (149) | ||||
Cash dividends declared | (1,074) | (1,074) | (1,074) | ||||
Stock-based compensation expense | 500 | 500 | 500 | ||||
Changes in non-controlling interest | (10) | (10) | |||||
Balance at Oct. 31, 2013 | 27,269 | $ 19 | 5,465 | 25,563 | (3,778) | 387 | 27,656 |
Balance (in shares) at Oct. 31, 2013 | 1,907,883 | ||||||
Increase (Decrease) in Stockholders' Equity | |||||||
Net earnings (loss) | 5,013 | 5,013 | 5,013 | ||||
Other comprehensive income (loss), net of taxes | (2,103) | (2,103) | (2,103) | ||||
Comprehensive income | 2,910 | 2,910 | |||||
Issuance of common stock in connection with employee stock plans and other | 143 | 142 | 1 | 143 | |||
Issuance of common stock in connection with employee stock plans and other (in shares) | 23,785 | ||||||
Repurchases of common stock | (2,957) | $ (1) | (2,694) | (262) | $ (2,957) | ||
Repurchases of common stock (in shares) | (92,380) | (92,000) | |||||
Tax benefit (deficiency) from employee stock plans | (43) | (43) | $ (43) | ||||
Cash dividends declared | (1,151) | (1,151) | (1,151) | ||||
Stock-based compensation expense | 560 | 560 | 560 | ||||
Changes in non-controlling interest | 9 | 9 | |||||
Balance at Oct. 31, 2014 | 26,731 | $ 18 | 3,430 | 29,164 | (5,881) | 396 | $ 27,127 |
Balance (in shares) at Oct. 31, 2014 | 1,839,288 | 1,839,000 | |||||
Increase (Decrease) in Stockholders' Equity | |||||||
Net earnings (loss) | 4,554 | 4,554 | $ 4,554 | ||||
Other comprehensive income (loss), net of taxes | (421) | (421) | (421) | ||||
Comprehensive income | 4,133 | 4,133 | |||||
Issuance of common stock in connection with employee stock plans and other | (33) | (34) | 1 | (33) | |||
Issuance of common stock in connection with employee stock plans and other (in shares) | 39,834 | ||||||
Repurchases of common stock | (2,648) | (2,237) | (411) | $ (2,648) | |||
Repurchases of common stock (in shares) | (75,403) | (75,000) | |||||
Assumption of equity awards in connection with acquisitions | 31 | 31 | $ 31 | ||||
Tax benefit (deficiency) from employee stock plans | 64 | 64 | 64 | ||||
Cash dividends declared | (1,219) | (1,219) | (1,219) | ||||
Stock-based compensation expense | 709 | 709 | 709 | ||||
Changes in non-controlling interest | (13) | (13) | |||||
Balance at Oct. 31, 2015 | $ 27,768 | $ 18 | $ 1,963 | $ 32,089 | $ (6,302) | $ 383 | $ 28,151 |
Balance (in shares) at Oct. 31, 2015 | 1,803,719 | 1,804,000 |
Overview and Summary of Signifi
Overview and Summary of Significant Accounting Policies | 12 Months Ended |
Oct. 31, 2015 | |
Overview and Summary of Significant Accounting Policies | |
Overview and Summary of Significant Accounting Policies | Note 1: Overview and Summary of Significant Accounting Policies Overview On November 1, 2015 (the "Distribution Date"), Hewlett-Packard Company completed the separation of Hewlett Packard Enterprise Company ("Hewlett Packard Enterprise"), Hewlett-Packard Company's former enterprise technology infrastructure, software, services and financing businesses (the "Separation"). In connection with the Separation, Hewlett-Packard Company changed its name to HP Inc. ("HP"). On November 1, 2015, each of HP stockholders of record as of the close of business on October 21, 2015 (the "Record Date") received one share of Hewlett Packard Enterprise common stock for every one share of HP's common stock held as of the Record Date. Hewlett Packard Enterprise is now an independent public company trading on the New York Stock Exchange ("NYSE") under the symbol "HPE". After the Separation, HP does not beneficially own any shares of Hewlett Packard Enterprise common stock and beginning November 1, 2015, HP no longer consolidates Hewlett Packard Enterprise within its financial results or reflect the financial results of Hewlett Packard Enterprise within its continuing results of operations. In connection with the Separation, HP and Hewlett Packard Enterprise have entered into a separation and distribution agreement as well as various other agreements that provide a framework for the relationships between the parties going forward, including among others a tax matters agreement, an employee matters agreement, a transition service agreement, a real estate matters agreement, a master commercial agreement and an information technology service agreement. These agreements provide for the allocation between HP and Hewlett Packard Enterprise of assets, employees, liabilities and obligations (including its investments, property and employee benefits and tax-related assets and liabilities) attributable to periods prior to, at and after the Separation and govern certain relationship between HP and Hewlett Packard Enterprise after the Separation. For more information on the impacts of these agreements, see Note 3 "Restructuring", Note 4 "Retirement and Post-Retirement Benefit Plans", Note 5 "Stock-Based Compensation", Note 6 "Taxes on Earnings", Note 13 "Borrowings", Note 16 "Litigation and Contingencies" and Note 17 "Guarantees, Indemnifications and Warranties". Basis of Presentation The accompanying consolidated financial statements of HP and its wholly-owned subsidiaries are prepared in conformity with United States ("U.S.") generally accepted accounting principles ("GAAP"). HP has eliminated all intercompany accounts and transactions. The historical results of operations, financial position, and cash flows of Hewlett Packard Enterprise are included in the consolidated financial statements of HP for each of the fiscal years included in this report and will be reported as discontinued operations beginning in the first quarter of fiscal 2016. Principles of Consolidation The Consolidated Financial Statements include the accounts of HP and its subsidiaries and affiliates in which HP has a controlling financial interest or is the primary beneficiary. HP accounts for investments in companies over which HP has the ability to exercise significant influence but does not hold a controlling interest under the equity method, and HP records its proportionate share of income or losses in Interest and other, net in the Consolidated Statements of Earnings. HP presents non-controlling interests as a separate component within Total stockholder's equity in the Consolidated Balance Sheets. Net earnings attributable to the non-controlling interests are eliminated within Interest and other, net in the Consolidated Statements of Earnings and are not presented separately as they were not material for any period presented. Reclassifications HP has made certain segment and business unit realignments in order to optimize its operating structure. Reclassifications of certain 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 ("EPS"). See Note 2 for a further discussion of HP's segment reorganization. Use of Estimates The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in HP's Consolidated Financial Statements and accompanying notes. Actual results could differ materially from those estimates. Foreign Currency Translation HP predominately uses the U.S. dollar as its functional currency. Assets and liabilities denominated in non-U.S. dollars are remeasured into U.S. dollars at current exchange rates for monetary assets and liabilities and at historical exchange rates for nonmonetary assets and liabilities. Net revenue, costs and expenses denominated in non-U.S. dollars are recorded in U.S. dollars at monthly average exchange rates prevailing during the period. HP includes gains or losses from foreign currency remeasurement in Interest and other, net in the Consolidated Statements of Earnings. Certain non-U.S. subsidiaries designate the local currency as their functional currency, and HP records the translation of their assets and liabilities into U.S. dollars at the balance sheet date as translation adjustments and includes them as a component of Accumulated other comprehensive loss in the Consolidated Balance Sheets. Accounting Pronouncements In November 2015, the Financial Accounting Standards Board ("FASB") issued an accounting standards update for income taxes, which requires deferred tax assets and liabilities to be classified as noncurrent in a classified statement of financial position. The new accounting guidance is effective for annual reporting periods beginning after December 15, 2016 and interim periods therein. Early adoption is permitted for all entities as of the beginning of interim or annual reporting periods. HP is currently assessing the impact of this adoption on its Consolidated Financial Statements, and plans to adopt for its interim and annual reporting period beginning November 1, 2015. In April 2015, the FASB amended the existing accounting standards for intangible assets. The amendments provide explicit guidance to customers in determining the accounting for fees paid in a cloud computing arrangement, wherein the arrangements that do not convey a software license to the customer are accounted for as service contracts. HP is required to adopt the guidance in the first quarter of fiscal 2017; however early adoption is permitted as is retrospective application. HP is currently evaluating the impact of these amendments on its Consolidated Financial Statements. In April 2015, the FASB amended the existing accounting standards for imputation of interest. The amendments require that debt issuance costs related to a recognized debt liability be presented on the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by these amendments. HP is required to adopt the guidance in the first quarter of fiscal 2017. Early adoption is permitted. The amendments should be applied retrospectively with the adjusted balance sheet of each individual period presented, in order to reflect the period-specific effects of applying the new guidance. HP is currently evaluating the timing and the impact of these amendments on its Consolidated Financial Statements. In May 2014, the FASB amended the existing accounting standards for revenue recognition. The amendments are based on the principle that revenue should be recognized to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In August 2015, the FASB issued an accounting standard update for a one-year deferral of the effective date, with an option of applying the standard on the original effective date, which for HP is the first quarter of fiscal 2018. In accordance with this deferral, HP is required to adopt these amendments in the first quarter of fiscal 2019. The amendments may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the date of initial application. HP is continuing to evaluate the impact of these amendments and the transition alternatives on its Consolidated Financial Statements. In April 2014, the FASB issued guidance which changes the criteria for identifying a discontinued operation. The guidance limits the definition of a discontinued operation to the disposal of a component or group of components that is disposed of or is classified as held for sale and represents a strategic shift that has, or will have, a major effect on an entity's operations and financial results. HP is required to adopt the guidance in the first quarter of fiscal 2016. Revenue Recognition General HP recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred or services are rendered, the sales price or fee is fixed or determinable, and collectability is reasonably assured. Additionally, HP recognizes hardware revenue on sales to channel partners, including resellers, distributors or value-added solution providers at the time of delivery when the channel partners have economic substance apart from HP, and HP has completed its obligations related to the sale. HP generally recognizes revenue for its standalone software sales to channel partners on receipt of evidence that the software has been sold to a specific end user. HP limits the amount of revenue recognized for delivered elements to the amount that is not contingent on the future delivery of products or services, future performance obligations or subject to customer-specified refund or return rights. HP reduces revenue for customer and distributor programs and incentive offerings, including price protection, rebates, promotions, other volume-based incentives and expected returns, at the later of the date of revenue recognition or the date the sales incentive is offered. Future market conditions and product transitions may require HP to take actions to increase customer incentive offerings, possibly resulting in an incremental reduction of revenue at the time the incentive is offered. For certain incentive programs, HP estimates the number of customers expected to redeem the incentive based on historical experience and the specific terms and conditions of the incentive. In instances when revenue is derived from sales of third-party vendor products or services, HP records revenue on a gross basis when HP is a principal to the transaction and on a net basis when HP is acting as an agent between the customer and the vendor. HP considers several factors to determine whether it is acting as a principal or an agent, most notably whether HP is the primary obligor to the customer, has established its own pricing and has inventory and credit risks. HP reports revenue net of any taxes collected from customers and remitted to government authorities, with the collected taxes recorded as current liabilities until remitted to the relevant government authority. Multiple element arrangements When a sales arrangement contains multiple elements or deliverables, such as hardware and software products, and/or services, HP allocates revenue to each element based on a selling price hierarchy. The selling price for a deliverable is based on its vendor specific objective evidence ("VSOE") of selling price, if available, third-party evidence ("TPE") if VSOE of selling price is not available, or estimated selling price ("ESP") if neither VSOE of selling price nor TPE is available. HP establishes VSOE of selling price using the price charged for a deliverable when sold separately and, in rare instances, using the price established by management having the relevant authority. HP establishes TPE of selling price by evaluating largely similar and interchangeable competitor products or services in standalone sales to similarly situated customers. HP establishes ESP based on management judgment considering internal factors such as margin objectives, pricing practices and controls, customer segment pricing strategies and the product life cycle. Consideration is also given to market conditions such as competitor pricing strategies and technology industry life cycles. In most arrangements with multiple elements, HP allocates the transaction price to the individual units of accounting at inception of the arrangement based on their relative selling price. In multiple element arrangements that include software that is more-than-incidental, HP allocates the transaction price to the individual units of accounting for the non-software deliverables and to the software deliverables as a group using the relative selling price of each of the deliverables in the arrangement based on the selling price hierarchy. If the arrangement contains more than one software deliverable, the transaction price allocated to the group of software deliverables is then allocated to each component software deliverable. HP evaluates each deliverable in an arrangement to determine whether it represents a separate unit of accounting. A deliverable constitutes a separate unit of accounting when it has standalone value to the customer. For elements with no standalone value, HP recognizes revenue consistent with the pattern of the undelivered elements. If the arrangement includes a customer-negotiated refund or return right or other contingency relative to the delivered items, and the delivery and performance of the undelivered items is considered probable and substantially within HP's control, the delivered element constitutes a separate unit of accounting. In arrangements with combined units of accounting, changes in the allocation of the transaction price among elements may impact the timing of revenue recognition for the contract but will not change the total revenue recognized for the contract. Product revenue Hardware Under HP's standard terms and conditions of sale, HP transfers title and risk of loss to the customer at the time product is delivered to the customer and recognizes revenue accordingly, unless customer acceptance is uncertain or significant obligations to the customer remain. HP reduces revenue for estimated customer returns, price protection, rebates and other programs offered under sales agreements established by HP with its distributors and resellers. HP records revenue from the sale of equipment under sales-type leases as product revenue at the inception of the lease. HP accrues the estimated cost of post-sale obligations, including standard product warranties, based on historical experience at the time HP recognizes revenue. Software HP recognizes revenue from perpetual software licenses at the inception of the license term, assuming all revenue recognition criteria have been satisfied. Term-based software license revenue is generally recognized ratably over the term of the license. HP uses the residual method to allocate revenue to software licenses at inception of the arrangement when VSOE of fair value for all undelivered elements, such as post-contract customer support, exists and all other revenue recognition criteria have been satisfied. HP recognizes revenue from maintenance and unspecified upgrades or updates provided on a when-and- if-available basis ratably over the period during which such items are delivered. HP recognizes revenue for hosting or software-as-a-service ("SaaS") arrangements as the service is delivered, generally on a straight-line basis, over the contractual period of performance. In hosting arrangements, HP considers the rights provided to the customer (e.g. whether the customer has the contractual right to take possession of the software at any time during the hosting period without significant penalty and the feasibility of the customer to operate or contract with another vendor to operate the software) in determining whether the arrangement includes the sale of a software license. In hosting arrangements where software licenses are sold, license revenue is generally recognized according to whether perpetual or term licenses are sold, when all other revenue recognition criteria are satisfied. Services revenue HP recognizes revenue from fixed-price support or maintenance contracts, including extended warranty contracts and software post-contract customer support agreements, ratably over the contract period and recognizes the costs associated with these contracts as incurred. For time and material contracts, HP recognizes revenue as services are rendered and recognizes costs as they are incurred. HP recognizes revenue from certain fixed-price contracts, such as consulting arrangements, as work progresses over the contract period on a proportional performance basis, as determined by the percentage of labor costs incurred to date compared to the total estimated labor costs of a contract. HP recognizes revenue on fixed-price contracts for design and build projects (to design, develop and construct software and systems) using the percentage-of-completion method. HP uses the cost-to-cost method to measure progress toward completion as determined by the percentage of cost incurred to date compared to the total estimated costs of the project. Estimates of total project costs for fixed-price contracts are regularly revised during the life of a contract. Provisions for estimated losses on fixed-priced contracts are recognized in the period when such losses become known. If reasonable and reliable cost estimates for a project cannot be made, HP uses the completed contract method and recognizes revenue and costs upon service completion. HP generally recognizes outsourcing services revenue in the period when the service is provided and the amount earned is not contingent on the occurrence of any future event. HP recognizes revenue using an objective measure of output for unit-priced contracts. Revenue for fixed-price outsourcing contracts with periodic billings is recognized on a straight-line basis if the service is provided evenly during the contract term. Provisions for estimated losses on outsourcing arrangements are recognized in the period when such losses become probable and estimable. HP recognizes revenue from operating leases on a straight-line basis as service revenue over the rental period. Financing income Sales-type and direct-financing leases produce financing income, which HP recognizes at consistent rates of return over the lease term. Deferred revenue and deferred costs HP records amounts invoiced to customers in excess of revenue recognized as deferred revenue until the revenue recognition criteria are satisfied. HP records revenue that is earned and recognized in excess of amounts invoiced on services contracts as trade receivables. Deferred revenue represents amounts invoiced in advance for product support contracts, software customer support contracts, outsourcing startup services work, consulting and integration projects, product sales or leasing income. HP recognizes costs associated with outsourcing contracts as incurred, unless such costs are considered direct and incremental to the startup phase of the contract, in which case HP defers these costs during the startup phase and subsequently amortizes such costs over the period that outsourcing services are provided, once those services commence. HP amortizes deferred contract costs on a straight-line basis over the remaining term of the contract unless facts and circumstances of the contract indicate a shorter period is more appropriate. Based on actual and projected contract financial performance indicators, HP analyzes the recoverability of deferred contract costs using the undiscounted estimated cash flows of the contract over its remaining term. If such undiscounted cash flows are insufficient to recover the carrying amount of deferred contract costs and long-lived assets directly associated with the contract, the deferred contract costs are first impaired. If a cash flow deficiency remains after reducing the carrying amount of the deferred contract costs to zero, HP evaluates any remaining long-lived assets related to that contract for impairment. Shipping and Handling HP includes costs related to shipping and handling in Cost of products. Stock-Based Compensation HP determines stock-based compensation expense based on the measurement date fair value of the award. HP recognizes compensation cost only for those awards expected to meet the service and performance vesting conditions on a straight-line basis over the requisite service period of the award. HP determines compensation costs at the aggregate grant level for service-based awards and at the individual vesting tranche level for awards with performance and/or market conditions. HP estimates the forfeiture rate based on its historical experience. Retirement and Post-Retirement Plans HP has various defined benefit, other contributory and noncontributory retirement and post-retirement plans. HP generally amortizes unrecognized actuarial gains and losses on a straight-line basis over the average remaining estimated service life of participants. In some cases, HP amortizes actuarial gains and losses using the corridor approach. See Note 4 for a full description of these plans and the accounting and funding policies. Advertising Costs to produce advertising are expensed as incurred during production. Costs to communicate advertising are expensed when the advertising is first run. Such costs totaled approximately $859 million in fiscal 2015, $834 million in fiscal 2014 and $867 million in fiscal 2013. Restructuring HP records charges associated with management-approved restructuring plans to reorganize one or more of HP's business segments, to remove duplicative headcount and infrastructure associated with business acquisitions or to simplify business processes and accelerate innovation. Restructuring charges can include severance costs to eliminate a specified number of employees, infrastructure charges to vacate facilities and consolidate operations, and contract cancellation costs. HP records restructuring charges based on estimated employee terminations and site closure and consolidation plans. HP accrues for severance and other employee separation costs under these actions when it is probable that benefits will be paid and the amount is reasonably estimable. The rates used in determining severance accruals are based on existing plans, historical experiences and negotiated settlements. Taxes on Earnings HP recognizes deferred tax assets and liabilities for the expected tax consequences of temporary differences between the tax bases of assets and liabilities and their reported amounts using enacted tax rates in effect for the year the differences are expected to reverse. HP records a valuation allowance to reduce the deferred tax assets to the amount that is more likely than not to be realized. HP records accruals for uncertain tax positions when HP believes that it is not more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. HP makes adjustments to these accruals when facts and circumstances change, such as the closing of a tax audit or the refinement of an estimate. The provision for income taxes includes the effects of adjustments for uncertain tax positions, as well as any related interest and penalties. Accounts Receivable HP establishes an allowance for doubtful accounts for accounts receivable. HP records a specific reserve for individual accounts when HP becomes aware of specific customer circumstances, such as in the case of a bankruptcy filing or deterioration in the customer's operating results or financial position. If there are additional changes in circumstances related to the specific customer, HP further adjusts estimates of the recoverability of receivables. HP maintains bad debt reserves for all other customers based on a variety of factors, including the use of third-party credit risk models that generate quantitative measures of default probabilities based on market factors, the financial condition of customers, the length of time receivables are past due, trends in the weighted-average risk rating for the portfolio, macroeconomic conditions, information derived from competitive benchmarking, significant one-time events and historical experience. The past due or delinquency status of a receivable is based on the contractual payment terms of the receivable. HP has third-party short-term financing arrangements intended to facilitate the working capital requirements of certain customers. These financing arrangements, which in certain cases provide for partial recourse, result in the transfer of HP's trade receivables to a third party. HP reflects amounts transferred to, but not yet collected from, the third party in accounts receivable in the Consolidated Balance Sheets. For arrangements involving an element of recourse, the fair value of the recourse obligation is measured using market data from similar transactions and reported as a current liability in the Consolidated Balance Sheets. Concentrations of Risk Financial instruments that potentially subject HP to significant concentrations of credit risk consist principally of cash and cash equivalents, investments, receivables from trade customers and contract manufacturers, financing receivables and derivatives. HP maintains cash and cash equivalents, investments, derivatives and certain other financial instruments with various financial institutions. These financial institutions are located in many different geographic regions, and HP's policy is designed to limit exposure from any particular institution. As part of its risk management processes, HP performs periodic evaluations of the relative credit standing of these financial institutions. HP has not sustained material credit losses from instruments held at these financial institutions. HP utilizes derivative contracts to protect against the effects of foreign currency and interest rate exposures. Such contracts involve the risk of non-performance by the counterparty, which could result in a material loss. HP sells a significant portion of its products through third-party distributors and resellers and, as a result, maintains individually significant receivable balances with these parties. If the financial condition or operations of these distributors' and resellers' aggregated business deteriorates substantially, HP's operating results could be adversely affected. The ten largest distributor and reseller receivable balances, which were concentrated primarily in North America and Europe, collectively represented 18% and 20% of gross accounts receivable as of October 31, 2015 and 2014, respectively. No single customer accounts for more than 10% of gross accounts receivable. Credit risk with respect to other accounts receivable and financing receivables is generally diversified due to the large number of entities comprising HP's customer base and their dispersion across many different industries and geographic regions. HP performs ongoing credit evaluations of the financial condition of its third-party distributors, resellers and other customers and may require collateral, such as letters of credit and bank guarantees, in certain circumstances. HP utilizes outsourced contract manufacturers around the world to manufacture HP-designed products. HP may purchase product components from suppliers and sell those components to its contract manufacturers thereby creating receivable balances from contract manufacturers. The three largest contract manufacturer receivable balances collectively represented 60% and 65% of HP's receivables from contract manufacturers of $1.0 billion as of October 31, 2015 and 2014, respectively. HP includes receivables from contract manufacturers in Other current assets in the Consolidated Balance Sheets on a gross basis. HP's credit risk associated with these receivables is mitigated wholly or in part, by the amount HP owes to these outsourced contract manufacturers, as HP generally has the legal right to offset its payables to contract manufacturers against these receivables. HP does not reflect the sale of these components in revenue and does not recognize any profit on these component sales until the related products are sold by HP, at which time any profit is recognized as a reduction to cost of sales. HP obtains a significant number of components from single source suppliers due to technology, availability, price, quality or other considerations. The loss of a single source supplier, the deterioration of HP's relationship with a single source supplier, or any unilateral modification to the contractual terms under which HP is supplied components by a single source supplier could adversely affect HP's revenue and gross margins. Inventory HP values inventory at the lower of cost or market. Cost is computed using standard cost which approximates actual cost on a first-in, first-out basis. Adjustments to reduce the cost of inventory to its net realizable value are made, if required, for estimated excess or obsolescence. Property, Plant and Equipment HP states property, plant and equipment at cost less accumulated depreciation. HP capitalizes additions and improvements and expenses maintenance and repairs as incurred. Depreciation expense is recognized on a straight-line basis over the estimated useful lives of the assets. Estimated useful lives are five to 40 years for buildings and improvements and three to 15 years for machinery and equipment. HP depreciates leasehold improvements over the life of the lease or the asset, whichever is shorter. HP depreciates equipment held for lease over the initial term of the lease to the equipment's estimated residual value. The estimated useful lives of assets used solely to support a customer services contract generally do not exceed the term of the customer contract. On retirement or disposition, the asset cost and related accumulated depreciation are removed from the Consolidated Balance Sheets with any gain or loss recognized in the Consolidated Statements of Earnings. HP capitalizes certain internal and external costs incurred to acquire or create internal use software, principally related to software coding, designing system interfaces and installation and testing of the software. HP amortizes capitalized internal use software costs using the straight-line method over the estimated useful lives of the software, generally from three to five years. Business Combinations HP includes the results of operations of acquired businesses in HP's consolidated results prospectively from the date of acquisition. HP allocates the fair value of purchase consideration to the assets acquired, including in-process research and development ("IPR&D"), liabilities assumed, and non-controlling interests in the acquired entity generally based on their fair values at the acquisition date. IPR&D is initially capitalized at fair value as an intangible asset with an indefinite life and assessed for impairment thereafter. When the IPR&D project is complete, it is reclassified as an amortizable purchased intangible asset and is amortized over its estimated useful life. If an IPR&D project is abandoned, HP will record a charge for the value of the related intangible asset to HP's Consolidated Statement of Earnings in the period it is abandoned. The excess of the fair value of purchase consideration over the fair value of these assets acquired, liabilities assumed and non-controlling interests in the acquired entity is recorded as goodwill. The primary items that generate goodwill include the value of the synergies between the acquired company and HP and the value of the acquired assembled workforce, neither of which qualifies for recognition as an intangible asset. Acquisition-related expenses and post-acquisition restructuring costs are recognized separately from the business combination and are expensed as incurred. Goodwill HP reviews goodwill for impairment annually and whenever events or changes in circumstances indicate the carrying amount of goodwill may not be recoverable. While HP is permitted to conduct a qualitative assessment to determine whether it |
Segment Information
Segment Information | 12 Months Ended |
Oct. 31, 2015 | |
Segment Information | |
Segment Information | Note 2: Segment Information 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 the following: • personal computing and other access devices; • imaging- and printing-related products and services; • enterprise information technology ("IT") infrastructure, including enterprise server and storage technology, networking products and solutions, and technology support and maintenance; • multi-vendor customer services, including technology consulting, outsourcing and support services across infrastructure, applications and business process domains; and • software products and solutions, including application testing and delivery, big data analytics, enterprise security, information governance and IT Operations Management. HP's operations are organized into seven segments for financial reporting purposes: Personal Systems, Printing, the Enterprise Group ("EG"), Enterprise Services ("ES"), Software, HP Financial Services ("HPFS") 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 and homogeneity of products and technology. The 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 may provide financial data aggregating the Personal Systems and the Printing segments in order to provide a supplementary view of its business. As a result of the Separation, beginning November 1, 2015, HP will report three segments as part of continuing operations: Personal Systems, Printing and Corporate Investments. A summary description of each 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 organization 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 systems, calculators and other related accessories, software, support and services for the commercial and consumer markets. HP groups commercial notebooks, commercial desktops, commercial services, commercial tablets, workstations and thin clients into commercial clients and consumer notebooks, consumer desktops, consumer services and consumer tablets into consumer clients when describing performance in these markets. Described below are HP's global business capabilities within Personal Systems. • Commercial PCs are optimized for enterprise and SMB customers, with a focus on robust designs, serviceability, connectivity, reliability and manageability in networked environments. • Consumer PCs are notebooks, desktops, and hybrids that are optimized for consumer usage, focusing on multi-media consumption, online browsing, and light productivity. 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 printers and commercial inkjet printers into Commercial Hardware and consumer inkjet printers into Consumer Hardware when describing performance in these markets. Described below are HP's global business capabilities within Printing. • LaserJet and Enterprise Solutions deliver HP's LaserJet and enterprise products, services and solutions to SMBs and large enterprises. Managed Print Services provides printing equipment, supplies, support, workflow optimization and security services for SMBs and enterprise customers around the world, utilizing proprietary HP tools and fleet management solutions as well as third-party software. • Inkjet and Printing Solutions deliver HP's consumer and SMB inkjet solutions (hardware, supplies, media, and web-connected hardware and services). Ongoing initiatives and programs such as Ink in the Office and Ink Advantage and newer initiatives such as Instant Ink provide innovative printing solutions to consumers and SMBs. • Graphics Solutions deliver large format printers (Designjet, Large Format Production, and Scitex Industrial), specialty printing, digital press solutions (Indigo and Inkjet Webpress), supplies and services to print service providers and design and rendering customers. • Software and Web Services delivers a suite of solutions and services, including photo storage and web-connected printing services. • Marketing Optimization focuses on delivering solutions that help businesses engage audiences, reach new customer segments and markets and deliver compelling content across channels. The group provides solutions for augmented reality, contact center analytics, customer communications management and digital experience management. The Enterprise Group provides servers, storage, networking and technology services that, when combined with HP's cloud solutions, enable 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. • Industry Standard Servers offers a range of products from entry-level servers through premium ProLiant servers, which run primarily Windows, Linux and virtualization platforms from software providers such as Microsoft Corporation ("Microsoft") and VMware, Inc. ("VMware") and open sourced software from other major vendors while leveraging x86 processors from Intel Corporation ("Intel") and Advanced Micro Devices, Inc. ("AMD"). • Business Critical Systems offers HP Integrity servers based on the Intel® Itanium® and x86 processors, HP Integrity NonStop solutions and mission-critical x86 ProLiant servers. • 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 and StoreVirtual products. • Networking offers wireless local area network, mobility and security software, switches, routers and network management products that span data centers, campus and branch environments and deliver software-defined networking and unified communications capabilities. • Technology Services provides support services and technology consulting to integrate and optimize EG's hardware platforms for the new style of IT. 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 comprised of the Infrastructure Technology Outsourcing ("ITO") and the Application and Business Services ("ABS") business units. • Infrastructure Technology Outsourcing delivers comprehensive services that encompass the management of data centers, IT security, cloud computing, workplace technology, networks, unified communications and enterprise service management. • Application and Business Services helps clients develop, revitalize and manage their applications and information assets. Software provides big data analytics and applications, enterprise security, application testing and delivery management and IT Operations Management solutions for businesses and other enterprises of all sizes. These software offerings include licenses, support, professional services and software-as-a-service. HP Financial Services provides flexible investment solutions, such as leasing, financing, IT consumption and utility programs and asset management services, for customers to enable the creation of unique technology deployment models and acquire complete IT solutions, including hardware, software and services from HP and others. Providing flexible services and capabilities that support the entire IT lifecycle, HPFS partners with customers globally to help build investment strategies that enhance their business agility and support their business transformation. HPFS offers a wide selection of investment solution capabilities for large enterprise customers and channel partners, along with an array of financial options to SMBs and educational and governmental entities. Corporate Investments includes HP Labs and certain enterprise-related business incubation projects and venture focused minority investments among others. Segment 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 allocate resources to, each of the segments. Segment revenue includes revenues from sales to external customers and intersegment revenues that reflect transactions between the segments on an arm's-length basis. Intersegment revenues primarily consist of sales of hardware and software that are sourced internally and, in the majority of the cases, are financed as operating leases by HPFS. HP's consolidated net revenue is derived and reported after the elimination of intersegment revenues from such arrangements. HP periodically engages in intercompany advanced royalty payment and licensing arrangements that may result in advance payments between subsidiaries. Revenues from these intercompany arrangements are deferred and recognized as earned over the term of the arrangement by the HP legal entities involved in such transactions; however, these advanced payments are eliminated from revenues as reported by HP and its business segments. As disclosed in Note 6, during fiscal 2015, HP executed an intercompany advanced royalty payment arrangement resulting in advanced payments of $8.8 billion, while during fiscal 2014 HP executed a multi-year intercompany licensing arrangement and intercompany advanced royalty payment arrangement which resulted in combined advanced payments of $11.5 billion. In these transactions, the payments were received in the U.S. from a foreign consolidated affiliate, with a deferral of intercompany revenues over the term of the arrangements, approximately 5 years and 15 years, respectively. The impact of these intercompany arrangements is eliminated from both HP consolidated and segment revenues. Financing interest in the Consolidated 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, acquisition and other related charges, separation costs, defined benefit plan settlement charges and impairment of data center assets. Segment Realignment Effective at the beginning of the first quarter of fiscal 2015, HP implemented an organizational change to align its segment financial reporting more closely with its current business structure. This organizational change resulted in the transfer of third-party multi-vendor support arrangements from the Technology Services ("TS") business unit within the EG segment to the ITO business unit within the ES segment. HP has reflected this change to its segment information retrospectively to the earliest period presented, which has resulted in the removal of intersegment revenue from the TS business unit within the EG segment and the related corporate intersegment revenue eliminations, and the transfer of operating profit from the TS business unit within the EG segment to the ITO business unit within the ES segment. In connection with the Separation, effective at the beginning of the fourth quarter of fiscal 2015, HP implemented an organizational change which resulted in the transfer of marketing optimization solutions business from the Software segment to the Commercial Hardware business unit within the Printing segment. HP has reflected this change to its segment information in prior reporting periods on an as-if basis, which resulted in the transfer of net revenue from the Software segment to the Commercial Hardware business unit within the Printing segment. This change also resulted in the transfer of operating profit from the Software segment to the Commercial Hardware business unit within the Printing segment. In addition, this change resulted in the reclassification of $512 million of goodwill from the Software segment to the Printing segment. These changes had no impact on HP's previously reported consolidated net revenue, earnings from operations, net earnings or net EPS. Segment Operating Results Printing and Personal Systems Personal Systems Printing Enterprise Group Enterprise Services Software HP Financial Services Corporate Investments Total In millions 2015 Net revenue $ $ $ $ $ $ $ $ Intersegment net revenue and other — Total segment net revenue $ $ $ $ $ $ $ $ Earnings (loss) from operations $ $ $ $ $ $ $ ) $ 2014 Net revenue $ $ $ $ $ $ $ $ Intersegment net revenue and other — Total segment net revenue $ $ $ $ $ $ $ $ Earnings (loss) from operations $ $ $ $ $ $ $ ) $ 2013 Net revenue $ $ $ $ $ $ $ $ Intersegment net revenue and other — Total segment net revenue $ $ $ $ $ $ $ $ Earnings (loss) from operations $ $ $ $ $ $ $ ) $ The reconciliation of segment operating results to HP consolidated results was as follows: For the fiscal years ended October 31 2015 2014 2013 In millions Net Revenue: Total segments $ $ $ Elimination of intersegment net revenue and other ) ) ) Total HP consolidated net revenue $ $ $ Earnings before taxes: Total segment earnings from operations $ $ $ Corporate and unallocated costs and eliminations ) ) ) Stock-based compensation expense ) ) ) Amortization of intangible assets ) ) ) Restructuring charges ) ) ) Acquisition and other related charges ) ) ) Separation costs ) — — Defined benefit plan settlement charges ) — — Impairment of data center assets ) — — Interest and other, net ) ) ) Total HP consolidated earnings before taxes $ $ $ Segment Assets HP allocates assets to its business segments based on the segments primarily benefiting from the assets. Total assets by segment and the reconciliation of segment assets to HP consolidated assets were as follows: As of October 31 2015 2014 In millions Personal Systems $ $ Printing Printing and Personal Systems Group Enterprise Group (1) Enterprise Services Software HP Financial Services Corporate Investments Corporate and unallocated assets Total HP consolidated assets $ $ (1) In connection with the acquisition of Aruba Networks, Inc. ("Aruba") in fiscal 2015, HP recorded approximately $1.8 billion of goodwill, $643 million of intangible assets and $153 million of IPR&D. HP reports the financial results of Aruba's business in the Networking business unit within the EG segment. Major Customers No single customer represented 10% or more of HP's total net revenue in any fiscal year presented. Geographic Information Net revenue by country is based upon the sales location that predominately represents the customer location. For each of the fiscal years of 2015, 2014 and 2013, other than the U.S., no country represented more than 10% of HP's net revenue. Net revenue by country in which HP operates was as follows: For the fiscal years ended October 31 2015 2014 2013 In millions U.S. $ $ $ Other countries Total net revenue $ $ $ As of October 31, 2015, the U.S. and Netherlands each represented more than 10% of net assets. As of October 31, 2014, the U.S., Netherlands and Ireland each represented 10% or more of net assets. Net property, plant and equipment by country in which HP operates was as follows: As of October 31 2015 2014 In millions U.S. $ $ United Kingdom. Other countries Total net property, plant and equipment $ $ Net revenue by segment and business unit was as follows: For the fiscal years ended October 31 2015 2014 2013 In millions Notebooks $ $ $ Desktops Workstations Other Personal Systems Supplies Commercial Hardware Consumer Hardware Printing Total Printing and Personal Systems Group Industry Standard Servers Technology Services Storage Networking Business Critical Systems Enterprise Group Infrastructure Technology Outsourcing Application and Business Services Enterprise Services Software HP Financial Services Corporate Investments Total segment net revenue Eliminations of intersegment net revenue and other ) ) ) Total net revenue $ $ $ |
Restructuring
Restructuring | 12 Months Ended |
Oct. 31, 2015 | |
Restructuring | |
Restructuring | Note 3: Restructuring Summary of Restructuring Plans HP's restructuring activities in fiscal 2015 summarized by plan were as follows: Fiscal 2015 As of October 31, 2015 Balance, October 31, 2014 Charges Cash Payments Other Adjustments and Non-Cash Settlements Balance, October 31, 2015 Total Costs Incurred to Date Total Expected Costs to Be Incurred In millions Fiscal 2015 Plan Severance $ — $ $ — $ — $ $ $ Infrastructure and other — ) — — Total 2015 Plan — ) — Fiscal 2012 Plan Severance and EER ) ) Infrastructure and other ) ) Total 2012 Plan ) ) Other Plans: Severance ) ) ) Infrastructure ) ) — Total Other Plans ) ) ) Total restructuring plans $ $ $ ) $ ) $ $ $ Reflected in Consolidated Balance Sheets: Accrued restructuring $ $ Other liabilities $ $ Fiscal 2015 Restructuring Plan In connection with the Separation, on September 14, 2015, HP's Board of Directors approved a cost saving and investment proposal which includes a restructuring plan (the "2015 Plan") which will be implemented through fiscal 2018. As part of the 2015 Plan, HP expects up to approximately 33,300 employees to exit the company by the end of 2018. These workforce reductions are primarily associated with the ES segment. The changes to the workforce will vary by country, based on local legal requirements and consultations with employee works councils and other employee representatives, as appropriate. HP estimates that it will incur aggregate pre-tax charges through fiscal 2018 of approximately $2.9 billion in connection with the 2015 Plan, of which the estimated cost for HP Inc. is approximately $280 million. Total estimated charges as a result of workforce reductions are approximately $2.4 billion and total estimated charges for real estate consolidation are approximately $506 million. 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. As of October 31, 2015 HP eliminated 55,800 positions in connection with the 2012 Plan, with a portion of those employees exiting the company as part of voluntary enhanced early retirement ("EER") programs in the U.S. and in certain other countries. HP recognized $5.5 billion in total aggregate charges in connection with the 2012 Plan, with $4.9 billion related to workforce reductions, including the EER programs, and $589 million related to infrastructure, including data center and real estate consolidation and other items. The severance and infrastructure related cash payments associated with the 2012 Plan are expected to be paid out through fiscal 2021. As of October 31, 2015, the 2012 Plan is considered completed. HP does not expect any additional charges to this plan. Other Plans Restructuring plans initiated by HP in fiscal 2008 and 2010 were substantially completed as of October 31, 2015. Severance and infrastructure related cash payments associated with the other plans are expected to be paid out through fiscal 2019. |
Retirement and Post-Retirement
Retirement and Post-Retirement Benefit Plans | 12 Months Ended |
Oct. 31, 2015 | |
Retirement and Post-Retirement Benefit Plans | |
Retirement and Post-Retirement Benefit Plans | Note 4: Retirement and Post-Retirement Benefit Plans Defined Benefit Plans HP sponsors a number of defined benefit pension plans worldwide. The most significant defined benefit plans are in the U.S. The HP Pension Plan ("Pension Plan") includes the former HP Retirement Plan and the former HP Company Cash Account Pension Plan ("Cash Account Pension Plan"). Under the HP Retirement Plan, benefits are based on pay and years of service, and under the Cash Account Pension Plan, benefits are accrued pursuant to a formula based on a percentage of pay plus interest. The Pension Plan was frozen effective January 1, 2008. The Cash Account Pension Plan was merged into the Pension Plan in 2005 for certain funding and investment purposes. Effective October 30, 2009, the Electronic Data Systems Corporation ("EDS") U.S. qualified pension plan was merged into the Pension Plan. The EDS plan was frozen effective January 1, 2009. HP reduces the benefit payable to certain U.S. employees under the Pension Plan for service before 1993, if any, by any amounts due to the employee under HP's frozen defined contribution Deferred Profit-Sharing Plan ("DPSP"). HP closed the DPSP to new participants in 1993. The DPSP obligations are equal to the plan assets and are recognized as an offset to the Pension Plan when HP calculates its defined benefit pension cost and obligations. The fair value of plan assets and projected benefit obligations for the U.S. defined benefit plans combined with the DPSP were as follows: For the fiscal years ended October 31 2015 2014 Plan Assets Projected Benefit Obligation Plan Assets Projected Benefit Obligation In millions U.S. defined benefit plans $ $ $ $ DPSP Total $ $ $ $ Post-Retirement Benefit Plans HP sponsors retiree health and welfare benefit plans, of which the most significant are in the U.S. Under the HP Retiree Welfare Benefits Plan, certain pre-2003 retirees and grandfathered participants with continuous service to HP since 2002 are eligible to receive partially-subsidized medical coverage based on years of service at retirement. Former grandfathered employees of Digital Equipment Corporation also receive partially-subsidized medical benefits that are not service-based. HP's share of the premium cost is capped for all subsidized medical coverage provided under the HP Retiree Welfare Benefits Plan. HP currently leverages the employer group waiver plan process to provide HP Retiree Welfare Benefits Plan post-65 prescription drug coverage under Medicare Part D, thereby giving HP access to federal subsidies to help pay for retiree benefits. Certain employees not grandfathered under the above programs, as well as employees hired after 2002 but before August 2008, are eligible for credits under the HP Retirement Medical Savings Account Plan ("RMSA") upon attaining age 45. Credits offered after September 2008 are provided in the form of matching credits on employee contributions made to a voluntary employee beneficiary association. Upon retirement, former employees may use these credits for the reimbursement of certain eligible medical expenses, including premiums required for coverage. Defined Contribution Plans HP offers various defined contribution plans for U.S. and non-U.S. employees. Total defined contribution expense was $542 million in fiscal 2015, $573 million in fiscal 2014 and $603 million in fiscal 2013. U.S. employees are automatically enrolled in the HP 401(k) Plan when they meet eligibility requirements, unless they decline participation. The quarterly employer matching contributions in the HP 401(k) Plan are 100% of an employee's contributions, up to a maximum of 4% of eligible compensation. Pension and Post-Retirement Benefit Expense HP's net pension and post-retirement benefit (credit) cost recognized in the Consolidated Statements of Earnings was as follows: For the fiscal years ended October 31 2015 2014 2013 2015 2014 2013 2015 2014 2013 U.S. Defined Benefit Plans Non-U.S. Defined Benefit Plans Post-Retirement Benefit Plans In millions Service cost $ $ $ $ $ $ $ $ $ Interest cost Expected return on plan assets ) ) ) ) ) ) ) ) ) Amortization and deferrals: Actuarial loss (gain) ) ) Prior service benefit — — — ) ) ) ) ) ) Net periodic benefit (credit) cost ) ) ) ) ) ) Curtailment gain — — — — ) ) — — ) Settlement loss — — — Special termination benefits — — — ) Net benefit (credit) cost $ ) $ ) $ ) $ $ $ $ ) $ ) $ ) Lump sum program In January 2015, HP offered certain terminated vested participants of the U.S. HP Pension Plan the option of receiving their pension benefit in a one-time voluntary lump sum within a specified window. Approximately 50% of the eligible participants elected to receive their benefits and as a result the pension plan trust paid $826 million in lump sum payments to these participants in fiscal 2015. As a result of the lump sum program, HP recognized a settlement expense of approximately $96 million and a remeasurement of the U.S. HP Pension Plan was required. The remeasurement also resulted in an additional net periodic benefit cost of $45 million for fiscal 2015 which was recognized in the Consolidated Statements of Earnings along with the settlement expense. During fiscal 2015, certain events, primarily the Separation and settlement as a result of the lump sum program, required multiple pension plans to be remeasured during the year. Thus, the assumptions used to calculate the net benefit (credit) cost for the remaining portion of the fiscal year after remeasurement were re-determined based on then current market conditions. The weighted-average assumptions used to calculate net benefit (credit) cost were as follows: For the fiscal years ended October 31 2015 2014 2013 2015 2014 2013 2015 2014 2013 U.S. Defined Benefit Plans Non-U.S. Defined Benefit Plans Post-Retirement Benefit Plans Discount rate % % % % % % % % % Expected increase in compensation levels % % % % % % — — — Expected long-term return on plan assets % % % % % % % % % Funded Status The funded status of the defined benefit and post-retirement benefit plans was as follows: As of October 31 2015 2014 2015 2014 2015 2014 U.S. Defined Benefit Plans Non-U.S. Defined Benefit Plans Post-Retirement Benefit Plans In millions Change in fair value of plan assets: Fair value—beginning of year $ $ $ $ $ $ Acquisition/addition of plans ) — — — Actual return on plan assets Employer contributions Participant contributions — — Benefits paid ) ) ) ) ) ) Settlement ) ) ) ) — — Currency impact — — ) ) — — Fair value—end of year Change in benefit obligation: Projected benefit obligation—beginning of year Acquisition/addition of plans ) — — — Service cost Interest cost Participant contributions — — Actuarial (gain) loss ) ) Benefits paid ) ) ) ) ) ) Plan amendments — — ) — — — Curtailment — — — ) — — Settlement ) ) ) ) — — Special termination benefits — — Currency impact — — ) ) ) ) Projected benefit obligation—end of year Funded status at end of year $ ) $ ) $ ) $ ) $ ) $ ) Accumulated benefit obligation $ $ $ $ The weighted-average assumptions used to calculate the projected benefit obligations were as follows: For the fiscal years ended October 31 2015 2014 2015 2014 2015 2014 U.S. Defined Benefit Plans Non-U.S. Defined Benefit Plans Post-Retirement Benefit Plans Discount rate % % % % % % Expected increase in compensation levels % % % % — — For the U.S. defined benefit plans, HP adopted a new mortality table in fiscal 2014 to better reflect expected lifetimes of its U.S. plan participants. The table used is based on a historical demographic study of the plans and increased the projected benefit obligation by approximately $870 million for the year ended October 31, 2014. The increase in the projected benefit obligation in fiscal 2014 was recognized as a part of the net actuarial loss as included in the other comprehensive loss which is being amortized over the remaining estimated life of plan participants. The net amounts recognized for HP's defined benefit and post-retirement benefit plans in HP's Consolidated Balance Sheets were as follows: As of October 31 2015 2014 2015 2014 2015 2014 U.S. Defined Benefit Plans Non-U.S. Defined Benefit Plans Post-Retirement Benefit Plans In millions Noncurrent assets $ — $ — $ $ $ — $ — Current liabilities ) ) ) ) ) ) Noncurrent liabilities ) ) ) ) ) ) Funded status at end of year $ ) $ ) $ ) $ ) $ ) $ ) The following table summarizes the pretax net actuarial loss (gain) and prior service benefit recognized in Accumulated other comprehensive loss for the defined benefit and post-retirement benefit plans: As of October 31, 2015 U.S. Defined Benefit Plans Non-U.S. Defined Benefit Plans Post-Retirement Benefit Plans In millions Net actuarial loss (gain) $ $ $ ) Prior service benefit — ) ) Total recognized in Accumulated other comprehensive loss $ $ $ ) The following table summarizes the net actuarial loss (gain) and prior service benefit that are expected to be amortized from accumulated other comprehensive loss (income) and recognized as components of HP Inc.'s net periodic benefit (credit) cost during the next fiscal year. U.S. Defined Benefit Plans Non-U.S. Defined Benefit Plans Post-Retirement Benefit Plans In millions Net actuarial loss (gain) $ $ $ ) Prior service benefit — ) ) Total expected to be recognized in net periodic benefit (credit) cost $ $ $ ) Defined benefit plans with projected benefit obligations exceeding the fair value of plan assets were as follows: As of October 31 2015 2014 2015 2014 U.S. Defined Benefit Plans Non-U.S. Defined Benefit Plans In millions Aggregate fair value of plan assets $ $ $ $ Aggregate projected benefit obligation $ $ $ $ Defined benefit plans with accumulated benefit obligations exceeding the fair value of plan assets were as follows: As of October 31 2015 2014 2015 2014 U.S. Defined Benefit Plans Non-U.S. Defined Benefit Plans In millions Aggregate fair value of plan assets $ $ $ $ Aggregate accumulated benefit obligation $ $ $ $ Fair Value of Plan Assets The table below sets forth the fair value of plan assets by asset category within the fair value hierarchy as of October 31, 2015. As of October 31, 2015 U.S. Defined Benefit Plans Non-U.S. Defined Benefit Plans Post-Retirement Benefit Plans Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total In millions Asset Category: Equity securities U.S. $ $ $ — $ $ $ $ — $ $ — $ $ — $ Non-U.S. — — — — — Debt securities Corporate — — — — — Government (1) — — — — — — Alternative Investments Private Equity (2) — — — — — Hybrids (3) — — — — — — — — — Hedge Funds (4) — — — — — Real Estate Funds — — — — — — — — Insurance Group Annuity Contracts — — — — — — — — — Common Collective Trusts and 103-12 Investment Entities (5) — — — — — — Registered Investment Companies (6) — — — — Cash and Cash Equivalents (7) — — — — Other (8) ) — ) ) — — ) Total $ $ $ $ $ $ $ $ $ $ $ $ (1) Includes debt issued by national, state and local governments and agencies. (2) Includes limited partnerships such as equity, buyout, venture capital, real estate and other similar funds that invest in the U.S. and internationally where foreign currencies are hedged. (3) Includes a fund that invests in both private and public equities primarily in the U.S. and the United Kingdom, as well as emerging markets across all sectors. The fund also holds fixed income and derivative instruments to hedge interest rate and inflation risk. In addition, the fund includes units in transferable securities, collective investment schemes, money market funds, cash and deposits. (4) Includes limited partnerships that invest both long and short primarily in common stocks and credit, relative value, event driven equity, distressed debt and macro strategies. Management of the hedge funds has the ability to shift investments from value to growth strategies, from small to large capitalization stocks and bonds, and from a net long position to a net short position. (5) Department of Labor 103-12 IE (Investment Entity) designation is for plan assets held by two or more unrelated employee benefit plans which includes limited partnerships and venture capital partnerships. (6) Includes publicly and privately traded Registered Investment Entities. (7) Includes cash and cash equivalents such as short-term marketable securities. (8) Includes primarily unsettled transactions, international insured contracts and derivative instruments. Such unsettled transactions relate primarily to fixed income securities to be settled in the first quarter of fiscal 2016. Changes in fair value measurements of Level 3 investments for the fiscal year ended October 31, 2015 were as follows: For the fiscal year ended October 31, 2015 U.S. Defined Benefit Plans Non-U.S. Defined Benefit Plans Post-Retirement Benefit Plans Debt Securities Alternative Investments Equity Alternative Investments Alternative Investments Corporate Debt Private Equity Hybrids Hedge Funds Total Non U.S. Equities Private Equity Hybrids Hedge Funds Real Estate Insurance Group Annuities Other Total Private Equity Hybrids Total In millions Beginning balance at October 31, 2014 $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ Actual return on plan assets: Relating to assets still held at the reporting date — ) — ) ) ) ) — — ) ) ) — ) Relating to assets sold during the period — ) — — ) — — — — ) — Purchases, sales, and settlements (net) ) ) — ) — — ) — ) ) ) Transfers in and/or out of Level 3 — — — — — — ) ) — — — Ending balance at October 31, 2015 $ $ $ — $ $ $ $ $ $ $ $ $ $ $ $ — $ The table below sets forth the fair value of plan assets by asset category within the fair value hierarchy as of October 31, 2014. As of October 31, 2014 U.S. Defined Benefit Plans Non-U.S. Defined Benefit Plans Post-Retirement Benefit Plans Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total In millions Asset Category: Equity securities U.S. $ $ — $ — $ $ $ $ — $ $ — $ — $ — $ — Non-U.S. — — — — — — Debt securities Corporate — — — — — Government (1) — — — — — — Alternative Investments Private Equity (2) — — — — — Hybrids (3) — — — — Hedge Funds (4) — — — — — — Real Estate Funds — — — — — — — — Insurance Group Annuity Contracts — — — — — — — — — Common Collective Trusts and 103-12 Investment Entities (5) — — — — — — — — Registered Investment Companies (6) — — — — — — Cash and Cash Equivalents (7) — — — — — Other (8) ) — ) — — ) Total $ $ $ $ $ $ $ $ $ $ $ $ (1) Includes debt issued by national, state and local governments and agencies. (2) Includes limited partnerships such as equity, buyout, venture capital, real estate and other similar funds that invest in the U.S. and internationally where foreign currencies are hedged. (3) Includes a fund that invests in both private and public equities primarily in the U.S. and the United Kingdom, as well as emerging markets across all sectors. The fund also holds fixed income and derivative instruments to hedge interest rate and inflation risk. In addition, the fund includes units in transferable securities, collective investment schemes, money market funds, cash and deposits. (4) Includes limited partnerships that invest both long and short primarily in common stocks and credit, relative value, event driven equity, distressed debt and macro strategies. Management of the hedge funds has the ability to shift investments from value to growth strategies, from small to large capitalization stocks and bonds, and from a net long position to a net short position. (5) Department of Labor 103-12 IE (Investment Entity) designation is for plan assets held by two or more unrelated employee benefit plans which includes limited partnerships and venture capital partnerships. (6) Includes publicly and privately traded Registered Investment Entities. (7) Includes cash and cash equivalents such as short-term marketable securities. (8) Includes international insured contracts, derivative instruments and unsettled transactions. Changes in fair value measurements of Level 3 investments for the fiscal year ended October 31, 2014 were as follows: For the fiscal year ended October 31, 2014 U.S. Defined Benefit Plans Non-U.S. Defined Benefit Plans Post-Retirement Benefit Plans Debt Securities Alternative Investments Equity Alternative Investments Alternative Investments Corporate Debt Private Equity Hybrids Hedge Funds Total Non U.S. Equities Private Equity Hybrids Hedge Funds Real Estate Insurance Group Annuities Other Total Private Equity Hybrids Total In millions Beginning balance at October 31, 2013 $ — $ $ $ $ $ $ $ — $ $ $ $ $ $ $ $ Actual return on plan assets: Relating to assets still held at the reporting date — — ) — — Relating to assets sold during the period — — — — — ) — — — — Purchases, sales, and settlements (net) ) — ) — ) ) — ) — ) Transfers in and/or out of Level 3 — — — — — — — — — — — — — Ending balance at October 31, 2014 $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ The following is a description of the valuation methodologies used to measure plan assets at fair value. There have been no changes in the methodologies used during the reporting period. Investments in publicly-traded equity securities are valued using the closing price on the measurement date as reported on the stock exchange on which the individual securities are traded. For corporate, government and asset-backed debt securities, fair value is based on observable inputs of comparable market transactions. For corporate and government debt securities traded on active exchanges, fair value is based on observable quoted prices. The valuation of alternative investments, such as limited partnerships and joint ventures, may require significant management judgment. For alternative investments, valuation is based on net asset value ("NAV") as reported by the Asset Manager and adjusted for cash flows, if necessary. In making such an assessment, a variety of factors are reviewed by management, including, but not limited to, the timeliness of NAV as reported by the asset manager and changes in general economic and market conditions subsequent to the last NAV reported by the asset manager. Depending on the amount of management judgment, the lack of near-term liquidity, and the absence of quoted market prices, these assets are classified in Level 2 or Level 3 of the fair value hierarchy. Further, depending on how quickly HP can redeem its hedge fund investments, and the extent of any adjustments to NAV, hedge funds are classified in either Level 2 or Level 3 of the fair value hierarchy. Common collective trusts, interests in 103-12 entities and registered investment companies are valued at NAV. The valuation for some of these assets requires judgment due to the absence of quoted market prices, and these assets are generally classified in Level 2 of the fair value hierarchy. Cash and cash equivalents includes money market funds, which are valued based on NAV. Other assets, including insurance group annuity contracts, were classified in the fair value hierarchy based on the lowest level input (e.g., quoted prices and observable inputs) that is significant to the fair value measure in its entirety. Plan Asset Allocations The weighted-average target and actual asset allocations across the benefit plans at the respective measurement dates were as follows: U.S. Defined Benefit Plans Non-U.S. Defined Benefit Plans Post-Retirement Benefit Plans Plan Assets Plan Assets Plan Assets 2015 Target Allocation 2015 Target Allocation 2015 Target Allocation Asset Category 2015 2014 2015 2014 2015 2014 Public equity securities % % % % % % Private/other equity securities % % % % % % Real estate and other )% % % % )% — Equity-related investments % % % % % % % % % Debt securities % % % % % % % % % Cash % % % % % % % % % Total % % % % % % % % % Investment Policy HP's investment strategy is to seek a competitive rate of return relative to an appropriate level of risk depending on the funded status of each plan and the timing of expected benefit payments. The majority of the plans' investment managers employ active investment management strategies with the goal of outperforming the broad markets in which they invest. Risk management practices include diversification across asset classes and investment styles and periodic rebalancing toward asset allocation targets. A number of the plans' investment managers are authorized to utilize derivatives for investment or liability exposures, and HP may utilize derivatives to effect asset allocation changes or to hedge certain investment or liability exposures. The target asset allocation selected for each U.S. plan reflects a risk/return profile HP believes is appropriate relative to each plan's liability structure and return goals. HP conducts periodic asset-liability studies for U.S. plans in order to model various potential asset allocations in comparison to each plan's forecasted liabilities and liquidity needs. HP invests a portion of the U.S. defined benefit plan assets and post-retirement benefit plan assets in private market securities such as private equity funds to provide diversification and a higher expected return on assets. Outside the U.S., asset allocation decisions are typically made by an independent board of trustees for the specific plan. As in the U.S., investment objectives are designed to generate returns that will enable the plan to meet its future obligations. In some countries, local regulations may restrict asset allocations, typically leading to a higher percentage of investment in fixed income securities than would otherwise be deployed. HP reviews the investment strategy and provides a recommended list of investment managers for each country plan, with final decisions on asset allocation and investment managers made by the board of trustees for the specific plan. Basis for Expected Long-Term Rate of Return on Plan Assets The expected long-term rate of return on plan assets reflects the expected returns for each major asset class in which the plan invests and the weight of each asset class in the target mix. Expected asset returns reflect the current yield on government bonds, risk premiums for each asset class and expected real returns which considers each country's specific inflation outlook. Because HP's investment policy is to employ primarily active investment managers who seek to outperform the broader market, the expected returns are adjusted to reflect the expected additional returns net of fees. Future Contributions and Funding Policy As of October 31, 2015, HP (including Hewlett Packard Enterprise) expects to contribute approximately $384 million to its non-U.S. pension plans and approximately $37 million to cover benefit payments to U.S. non-qualified plan participants and approximately $46 million to cover benefit claims for HP's post-retirement benefit plans in fiscal 2016. Subsequent to the Separation, HP Inc. expects to contribute approximately $18 million to its non-U.S. pension plans, approximately $36 million to cover benefit payments to U.S. non-qualified plan participants and approximately $43 million to cover benefit claims for HP's post-retirement benefit plans in fiscal 2016. 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. Estimated Future Benefits Payments As of October 31, 2015, HP Inc. estimates that the future benefits payments for the retirement and post-retirement plans are as follows: Fiscal year U.S. Defined Benefit Plans Non-U.S. Defined Benefit Plans Post-Retirement Benefit Plans In millions 2016 $ $ $ 2017 2018 2019 2020 Next five fiscal years to October 31, 2025 Separation related activities In advance of the Separation, HP underwent a plan-by-plan analysis in which it was determined if each plan would be assigned to HP Inc. or Hewlett Packard Enterprise. While some pension plans transitioned in their entirety to Hewlett Packard Enterprise or remain in their entirety with HP Inc., other plans were split into two identical plans resulting in both companies splitting the plan's assets and liabilities. As a result of these plan separations, HP Inc. will retain defined benefit plan assets of approximately $11,930 million, of which approximately $11,077 million pertain to the U.S. defined benefit plans. The projected benefit obligation for these defined benefit plans as of October 31, 2015 was $13,792 million, of which $12,709 million pertains to the U.S. defined benefit plans. The net funded status of these plans represents a net obligation which is recognized on HP Inc.'s Consolidated Balance Sheets for approximately $1,862 million of which $1,632 million pertains to the U.S. defined benefit plans. In addition, HP Inc. will retain post-retirement benefit plan assets of approximately $434 million. The projected benefit obligation for these post-retirement benefit plans as of October 31, 2015 was approximately $598 million. The net funded status of these plans represents a net obligation which is recognized on HP Inc.'s Consolidated Balance Sheets for approximately $164 million. The current Hewlett-Packard Company 401(k) Plan ("HP 401(k) Plan") will remain with HP Inc. A new 401(k) Plan was created for the employees of Hewlett Packard Enterprise and the respective balances were transferred after the Separation. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Oct. 31, 2015 | |
Stock-Based Compensation | |
Stock-Based Compensation | Note 5: Stock-Based Compensation HP's stock-based compensation plans include incentive compensation plans and an employee stock purchase plan ("ESPP"). Stock-Based Compensation Expense and Related Income Tax Benefits Stock-based compensation expense and the resulting tax benefits were as follows: For the fiscal years ended October 31 2015 2014 2013 In millions Stock-based compensation expense $ $ $ Income tax benefit ) ) ) Stock-based compensation expense, net of tax $ $ $ In connection with the Separation, the Board of Directors approved amendments to certain outstanding long-term incentive awards on July 29, 2015. The amendments provided for the accelerated vesting on September 17, 2015 of certain stock-based awards that were otherwise scheduled to vest between September 18, 2015 and December 31, 2015. The pre-tax stock-based compensation expense due to the acceleration was approximately $76 million in fiscal year 2015. Cash received from option exercises and purchases under the Hewlett-Packard Company 2011 Employee Stock Purchase Plan (the "2011 ESPP") was $0.4 billion in fiscal 2015, $0.3 billion in fiscal 2014 and $0.3 billion in fiscal 2013. The benefit realized for the tax deduction from option exercises in fiscal 2015, 2014 and 2013 was $75 million, $51 million and $13 million, respectively. Stock-Based Incentive Compensation Plans HP's stock-based incentive compensation plans include equity plans adopted in 2004 and 2000, as amended ("principal equity plans"), as well as various equity plans assumed through acquisitions under which stock-based awards are outstanding. Stock-based awards granted from the principal equity plans include restricted stock awards, stock options and performance-based awards. Employees meeting certain employment qualifications are eligible to receive stock-based awards. Restricted stock awards are non-vested stock awards that may include grants of restricted stock or restricted stock units. Restricted stock awards and cash-settled awards are generally subject to forfeiture if employment terminates prior to the lapse of the restrictions. Such awards generally vest one to three years from the date of grant. During the vesting period, ownership of the restricted stock cannot be transferred. Restricted stock has the same dividend and voting rights as common stock and is considered to be issued and outstanding upon grant. The dividends paid on restricted stock are non-forfeitable. Restricted stock units do not have the voting rights of common stock, and the shares underlying restricted stock units are not considered issued and outstanding upon grant. However, shares underlying restricted stock units are included in the calculation of diluted net EPS. Restricted stock units have forfeitable dividend equivalent rights equal to the dividend paid on common stock. HP expenses the fair value of restricted stock awards ratably over the period during which the restrictions lapse. Stock options granted under the principal equity plans are generally non-qualified stock options, but the principal equity plans permit some options granted to qualify as incentive stock options under the U.S. Internal Revenue Code. Stock options generally vest over three to four years from the date of grant. The exercise price of a stock option is equal to the closing price of HP's stock on the option grant date. The majority of stock options issued by HP contain only service vesting conditions. However, starting in fiscal 2011, HP began granting performance-contingent stock options that vest only on the satisfaction of both service and market conditions prior to the expiration of the awards. In connection with the Separation and in accordance with the Employee Matters Agreement, HP will make certain adjustments to the exercise price and number of share-based compensation awards with the intention of preserving the intrinsic value of the awards prior to the separation. Exercisable and non-exercisable stock options will be converted to similar awards of the entity where the employee is working post-separation. Restricted stock unit awards and performance-contingent awards will be adjusted to provide holders restricted stock units and performance-contingent awards in the company that employs such employee following the separation. Restricted Stock Awards A summary of restricted stock awards activity is as follows: As of October 31 2015 2014 2013 Shares Weighted- Average Grant Date Fair Value Per Share Shares Weighted- Average Grant Date Fair Value Per Share Shares Weighted- Average Grant Date Fair Value Per Share In thousands In thousands In thousands Outstanding at beginning of year $ $ $ Granted and assumed through acquisition $ $ $ Vested ) $ ) $ ) $ Forfeited ) $ ) $ ) $ Outstanding at end of year $ $ $ In fiscal 2015, HP assumed approximately 8 million shares of restricted stock units through acquisition with a weighted-average grant date fair value of $33 per share. The total grant date fair value of restricted stock awards vested in fiscal 2015, 2014 and 2013 was $593 million, $234 million and $247 million, respectively, net of taxes. As of October 31, 2015, total unrecognized pre-tax stock-based compensation expense related to non-vested restricted stock awards was $652 million, which is expected to be recognized over the remaining weighted-average vesting period of 1.5 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. 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: For the fiscal years ended October 31 2015 2014 2013 Weighted-average fair value (1) $ $ $ Expected volatility (2) % % % Risk-free interest rate (3) % % % Expected dividend yield (4) % % % Expected term in years (5) (1) The weighted-average fair value was based on stock options granted during the period. (2) For all awards granted in fiscal 2015 and fiscal 2013, expected volatility was estimated using the implied volatility derived from options traded on HP's common stock. For awards granted in fiscal 2014, expected volatility for awards subject to service-based vesting was estimated using the implied volatility derived from options traded on HP's common stock, whereas for performance- contingent awards, expected volatility was estimated using the historical volatility of HP's common stock. (3) The risk-free interest rate was estimated based on the yield on U.S. Treasury zero-coupon issues. (4) The expected dividend yield represents a constant dividend yield applied for the duration of the expected term of the award. (5) For awards subject to service-based vesting, the expected term was estimated using historical exercise and post-vesting termination patterns; and for performance-contingent awards, the expected term represents an output from the lattice model. A summary of stock option activity is as follows: As of October 31 2015 2014 2013 Shares Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term Aggregate Intrinsic Value Shares Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term Aggregate Intrinsic Value Shares Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term Aggregate Intrinsic Value In thousands In years In millions In thousands In years In millions In thousands In years In millions Outstanding at beginning of year $ $ $ Granted and assumed through acquisitions $ $ $ Exercised ) $ ) $ ) $ Forfeited/cancelled/expired ) $ ) $ ) $ Outstanding at end of year $ $ $ $ $ $ Vested and expected to vest at end of year $ $ $ $ $ $ Exercisable at end of year $ $ $ $ $ $ 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 the last trading day of fiscal 2015, 2014 and 2013. The aggregate intrinsic value is the difference between HP's closing stock price on the last trading day of the fiscal year and the exercise price, multiplied by the number of in-the-money options. The total intrinsic value of options exercised in fiscal 2015, 2014 and 2013 was $214 million, $151 million and $36 million, respectively. The total grant date fair value of options vested in fiscal 2015, 2014 and 2013 was $59 million, $53 million and $64 million, respectively, net of taxes. The following table summarizes significant ranges of outstanding and exercisable stock options: As of October 31, 2015 Options Outstanding Options Exercisable Range of Exercise Prices Shares Outstanding Weighted- Average Remaining Contractual Term Weighted- Average Exercise Price Shares Exercisable Weighted- Average Exercise Price In thousands In years In thousands $0-$9.99 $ $ $10-$19.99 $ $ $20-$29.99 $ $ $30-$39.99 $ $ $40-$49.99 $ $ $50-$59.99 $ $ $ $ As of October 31, 2015, total unrecognized pre-tax stock-based compensation expense related to stock options was $46 million, which is expected to be recognized over a weighted-average vesting period of 1.9 years. Employee Stock Purchase Plan HP sponsors the 2011 ESPP, pursuant to which eligible employees may contribute up to 10% of base compensation, subject to certain income limits, to purchase shares of HP's common stock. Pursuant to the terms of the 2011 ESPP, employees purchase stock under the 2011 ESPP at a price equal to 95% of HP's closing stock price on the purchase date. No stock-based compensation expense was recorded in connection with those purchases because the criteria of a non-compensatory plan were met. Shares Reserved Shares available for future grant and shares reserved for future issuance under the stock-based incentive compensation plans and the 2011 ESPP were as follows: As of October 31 2015 2014 2013 In thousands Shares available for future grant Shares reserved for future issuance |
Taxes on Earnings
Taxes on Earnings | 12 Months Ended |
Oct. 31, 2015 | |
Taxes on Earnings | |
Taxes on Earnings | Note 6: Taxes on Earnings Provision for Taxes The domestic and foreign components of earnings (loss) before taxes were as follows: For the fiscal years ended October 31 2015 2014 2013 In millions U.S. $ $ $ Non-U.S. $ $ $ The provision for (benefit from) taxes on earnings was as follows: For the fiscal years ended October 31 2015 2014 2013 In millions U.S. federal taxes: Current $ ) $ $ Deferred ) ) Non-U.S. taxes: Current Deferred ) State taxes: Current Deferred ) ) $ $ $ The differences between the U.S. federal statutory income tax rate and HP's effective tax rate were as follows: For the fiscal years ended October 31 2015 2014 2013 U.S. federal statutory income tax rate % % % State income taxes, net of federal tax benefit )% % % Lower rates in other jurisdictions, net )% )% )% Valuation allowances )% % % Uncertain tax positions % )% % Other, net % % % % % % The jurisdictions with favorable tax rates that have the most significant effective tax rate impact in the periods presented include Puerto Rico, Singapore, China, Malaysia, Ireland and Netherlands. To the extent that HP plans to reinvest earnings of these jurisdictions indefinitely outside the United States, U.S. taxes have not been provided on those indefinitely reinvested earnings. In fiscal 2015, HP recorded $1.6 billion of net income tax benefits related to items unique to the year. These amounts included $1.8 billion tax benefit due to a release of valuation allowances pertaining to certain U.S. deferred tax assets and $486 million tax charge to record valuation allowances on certain foreign deferred tax assets, both related to legal entities within the ES business, $394 million of tax charges for adjustments to uncertain tax positions and the settlement of tax audit matters, inclusive of $449 million of tax charges related to pension transfers, and $3 million of tax charges for various provision to return adjustments and other adjustments. In addition, HP recorded $639 million of net tax benefits on restructuring, separation-related, and other charges and a tax benefit of $47 million arising from the retroactive research and development credit resulting from the Tax Increase Prevention Act of 2014, which was signed into law in December 2014. In fiscal 2014, HP recorded $53 million of net income tax charges related to items unique to the year. In fiscal 2013, HP recorded $471 million of net income tax charges related to items unique to the year. These amounts included $214 million of net increases to valuation allowances, $406 million of tax charges for adjustments to uncertain tax positions and the settlement of tax audit matters and $47 million of tax charges for various prior period adjustments. In addition, HP recorded $146 million of tax benefits from adjustments to prior year foreign income tax accruals and a tax benefit of $50 million arising from the retroactive research and development credit resulting from the American Taxpayer Relief Act of 2012, which was signed into law in January 2013. As a result of certain employment actions and capital investments HP has undertaken, income from manufacturing and services in certain countries is subject to reduced tax rates, and in some cases is wholly exempt from taxes, through 2026. The gross income tax benefits attributable to these actions and investments were estimated to be $581 million ($0.32 diluted net EPS) in fiscal year 2015, $1.2 billion ($0.61 diluted net EPS) in fiscal 2014, $827 million ($0.42 diluted net EPS) in fiscal year 2013. The gross income tax benefits were offset partially by accruals of U.S. income taxes on undistributed earnings, among other factors. Uncertain Tax Positions A reconciliation of unrecognized tax benefits is as follows: As of October 31 2015 2014 2013 In millions Balance at beginning of year $ $ $ Increases: For current year's tax positions For prior years' tax positions Decreases: For prior years' tax positions ) ) ) Statute of limitations expirations ) ) ) Settlements with taxing authorities ) ) ) Balance at end of year $ $ $ Up to $3.0 billion, $2.2 billion and $1.9 billion of HP's unrecognized tax benefits at October 31, 2015, 2014 and 2013, respectively, would affect HP's effective tax rate if realized. The $5.8 billion increase in the amount of unrecognized tax benefits for the year ended October 31, 2015 primarily relates to the timing of intercompany royalty income recognition which does not affect HP's effective tax rate. HP recognizes interest income from favorable settlements and interest expense and penalties accrued on unrecognized tax benefits in Provision for taxes in the Consolidated Statements of Earnings. HP had accrued $357 million and $254 million for interest and penalties as of October 31, 2015 and 2014, respectively. HP engages in continuous discussion and negotiation with taxing authorities regarding tax matters in various jurisdictions. HP does not expect complete resolution of any U.S. Internal Revenue Service ("IRS") audit cycle within the next 12 months. However, it is reasonably possible that certain federal, foreign and state tax issues may be concluded in the next 12 months, including issues involving 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 $144 million within the next 12 months. HP is subject to income tax in the U.S. and approximately 105 other countries and is subject to routine corporate income tax audits in many of these jurisdictions. In addition, HP is subject to numerous ongoing audits by federal, state and foreign tax authorities. The IRS is conducting an audit of HP's 2009, 2010, 2011, 2012, 2013 and 2014 income tax returns. HP has received from the IRS Notices of Deficiency for its fiscal 1999, 2000, 2003, 2004 and 2005 tax years, and Revenue Agent Reports ("RAR") for its fiscal 2001, 2002, 2006, 2007 and 2008 tax years. The proposed IRS adjustments for these tax years would, if sustained, reduce the benefits of tax refund claims HP has filed for net operating loss carrybacks to earlier fiscal years and tax credit carryforwards to subsequent years by approximately $445 million. In addition, HP expects the IRS to issue an RAR for 2009 through 2011 relating to certain tax positions taken on the filed tax returns, including matters related to the U.S. taxation of certain intercompany loans. While the RAR may be material in amount, HP believes it has valid positions supporting its tax returns and, if necessary, it will vigorously defend such matters. HP has filed petitions with the U.S. Tax Court regarding certain proposed IRS adjustments regarding tax years 1999 through 2003 and is continuing to contest additional adjustments proposed by the IRS for other tax years. The U.S. Tax Court ruled in May 2012 against HP regarding one of the IRS adjustments for which HP has filed a formal Notice of Appeal. The Court proceedings are expected to begin in fiscal 2016. Pre-acquisition tax years of HP's U.S. group of subsidiaries providing enterprise services through 2004 have been audited by the IRS, and all proposed adjustments have been resolved. RARs have been received for tax years 2005, 2006, 2007 and the short period ended August 26, 2008, proposing total tax deficiencies of $274 million. HP is contesting certain of these issues. The IRS began an audit in fiscal 2013 of the 2010 income tax return for HP's U.S. group of subsidiaries providing enterprise services, and has issued an RAR for the short period ended October 31, 2008 and the period ending October 31, 2009 proposing a total tax deficiency of $62 million. HP is contesting certain of these issues. With respect to major state and foreign tax jurisdictions, HP is no longer subject to tax authority examinations for years prior to 1999. HP is subject to a foreign tax audit concerning an intercompany transaction for fiscal 2009. The relevant taxing authority has proposed an assessment of approximately $733 million. HP is contesting this proposed assessment. 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 HP's 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. HP has not provided for U.S. federal income and foreign withholding taxes on $47.2 billion of undistributed earnings from non-U.S. operations as of October 31, 2015 because HP intends to reinvest such earnings indefinitely outside of the U.S. If HP were to distribute these earnings, foreign tax credits may become available under current law to reduce the resulting U.S. income tax liability. Determination of the amount of unrecognized deferred tax liability related to these earnings is not practicable. HP will remit non-indefinitely reinvested earnings of its non-U.S. subsidiaries for which deferred U.S. federal and withholding taxes have been provided where excess cash has accumulated and HP determines that it is advantageous for business operations, tax or cash management reasons. Deferred Income Taxes The significant components of deferred tax assets and deferred tax liabilities were as follows: As of October 31 2015 2014 Deferred Tax Assets Deferred Tax Liabilities Deferred Tax Assets Deferred Tax Liabilities In millions Loss carryforwards $ $ — $ $ — Credit carryforwards — — Unremitted earnings of foreign subsidiaries — — Inventory valuation Intercompany transactions—profit in inventory — — Intercompany transactions—excluding inventory — — Fixed assets Warranty — — Employee and retiree benefits Accounts receivable allowance Intangible assets Restructuring — — Deferred revenue Other Gross deferred tax assets and liabilities Valuation allowances ) — ) — Net deferred tax assets and liabilities $ $ $ $ Current and long-term deferred tax assets and liabilities included in the Consolidated Balance Sheets as follows: As of October 31 2015 2014 In millions Current deferred tax assets $ $ Current deferred tax liabilities ) ) Long-term deferred tax assets Long-term deferred tax liabilities ) ) Net deferred tax assets net of deferred tax liabilities $ $ Excess tax benefits of $64 million were recorded resulting from the exercise of employee stock options and other employee stock programs in fiscal 2015. Tax deficits of approximately $43 million and $149 million were recorded as a result of employee stock program activity and exercise of employee stock options, as a decrease in stockholders' equity in fiscal 2014 and 2013, respectively. HP periodically engages in intercompany advanced royalty payment and licensing arrangements that may result in advance payments between subsidiaries in different tax jurisdictions. When the local tax treatment of the intercompany licensing arrangements differs from U.S. GAAP treatment, deferred taxes are recognized. During fiscal 2015, HP executed an intercompany advanced royalty payment arrangement resulting in advanced payments of $8.8 billion, while during fiscal 2014, HP executed a multi-year intercompany licensing arrangement and an intercompany advanced royalty payment arrangement which resulted in combined advanced payments of $11.5 billion, the result of which was the recognition of zero net U.S. deferred tax assets in fiscal 2015 and $1.7 billion in fiscal 2014. In these transactions, the payments were received in the U.S. from a foreign consolidated affiliate, with a deferral of intercompany revenues over the term of the arrangements, approximately 5 years and 15 years, respectively. Intercompany royalty revenue and the amortization expense related to the licensing rights are eliminated in consolidation. Separation costs are expenses associated with HP's plan to separate into two independent publicly-traded companies. HP recorded a deferred tax asset on these costs and expenses as they were incurred through fiscal 2015. HP expects a portion of these deferred tax assets associated with separation costs and expenses will be non-deductible expenses, at the time the Separation is executed. Furthermore, HP has also concluded on the legal form of the Separation and in May 2015 announced that Hewlett Packard Enterprise will be the spinnee in the U.S. Accordingly, during the second half of fiscal 2015, HP implemented certain internal reorganizations of, and transactions among, its wholly owned subsidiaries and operating activities in preparation for the legal form of Separation. As a result, HP recorded adjustments to certain deferred and prepaid tax assets as well as income tax liabilities reflecting the impact of separation related activities. As of October 31, 2015, HP had $971 million, $6.1 billion and $26.8 billion of federal, state and foreign net operating loss carryforwards, respectively. Amounts included in each of these respective totals begin to expire in fiscal 2023, 2016 and 2016, respectively. HP also has capital loss carryforwards of approximately $26 million which will expire in fiscal 2020. HP has provided a valuation allowance of $106 million and $8.2 billion related to the state and foreign net operating loss carryforwards, respectively. As of October 31, 2015, HP had recorded deferred tax assets for various tax credit carryforwards as follows: Carryforward Valuation Allowance Initial Year of Expiration In millions U.S. foreign tax credits $ $ — U.S. R&D and other credits — Tax credits in state and foreign jurisdictions ) Balance at end of year $ $ ) Deferred Tax Asset Valuation Allowance The deferred tax asset valuation allowance and changes were as follows: As of October 31 2015 2014 2013 In millions Balance at beginning of year $ $ $ Income tax (benefit) expense ) Other comprehensive income, currency translation and charges to other accounts ) ) Balance at end of year $ $ $ Gross deferred tax assets at October 31, 2015, 2014 and 2013 were reduced by valuation allowances of $9.9 billion, $11.9 billion and $11.4 billion, respectively. Total valuation allowance decreased by $2 billion in fiscal 2015 associated with the reversal of a valuation allowance against deferred tax assets in the U.S., and increased by $525 million in fiscal 2014, associated primarily with foreign net operating losses. Tax Matters Agreement and Other Income Tax Matters In connection with the Separation, HP entered into a Tax Matters Agreement (the "Tax Matters Agreement") with Hewlett Packard Enterprise effective on November 1, 2015 that governs the rights and obligations of HP and Hewlett Packard Enterprise for certain pre-Separation tax liabilities. The Tax Matters Agreement provides that HP and Hewlett Packard Enterprise will share certain pre-Separation income tax liabilities that arise from adjustments made by tax authorities to HP and Hewlett Packard Enterprise's U.S. and certain non-U.S. income tax returns. In certain jurisdictions HP and Hewlett Packard Enterprise have joint and several liability for past income tax liabilities and accordingly, HP could be legally liable under applicable tax law for such liabilities and required to make additional tax payments. In addition, if the distribution of Hewlett Packard Enterprise 's common shares to the HP stock holders is determined to be taxable, Hewlett Packard Enterprise and HP would share the tax liability equally, unless the taxability of the distribution is the direct result of action taken by either Hewlett Packard Enterprise or HP subsequent to the distribution in which case the party causing the distribution to be taxable would be responsible for any taxes imposed on the distribution. Upon completion of the Separation on November 1, 2015, HP recorded a net payable to Hewlett Packard Enterprise of $390 million for certain tax liabilities that Hewlett Packard Enterprise is joint and severally liable for, but for which it is indemnified by HP under the Tax Matters Agreement. The actual amount that HP may be obligated to pay could vary depending upon the outcome of certain unresolved tax matters, which may not be resolved for several years. |
Balance Sheet Details
Balance Sheet Details | 12 Months Ended |
Oct. 31, 2015 | |
Balance Sheet Details | |
Balance Sheet Details | Note 7: Balance Sheet Details Balance sheet details were as follows: Accounts Receivable, Net As of October 31 2015 2014 In millions Accounts receivable $ $ Allowance for doubtful accounts ) ) $ $ The allowance for doubtful accounts related to accounts receivable and changes were as follows: As of October 31 2015 2014 2013 In millions Balance at beginning of year $ $ $ Provision for doubtful accounts Deductions, net of recoveries ) ) ) Balance at end of year $ $ $ HP has third-party short-term financing arrangements intended to facilitate the working capital requirements of certain customers. The maximum, utilized and available program capacity under these short-term financing arrangements was as follows: As of October 31 2015 2014 In millions Non-recourse arrangements: Maximum program capacity $ $ Utilized capacity (1)(2) ) ) Available capacity $ $ Partial-recourse arrangements: Maximum program capacity $ $ Utilized capacity (1)(2) ) ) Available capacity $ $ Total arrangements: Maximum program capacity $ $ Utilized capacity (1)(2) ) ) Available capacity $ $ (1) Utilized capacity represents the receivables sold to third parties, but not collected from the customer by the third parties. (2) HP reflects the amounts transferred to, but not yet collected from, third parties in Accounts receivable in the Consolidated Balance Sheets. These amounts, included in the utilized capacity are as follows: As of October 31 2015 2014 In millions Non-recourse arrangements $ $ Partial-recourse arrangements Total arrangements $ $ The activity related to HP's revolving short-term financing arrangements was as follows: As of October 31 2015 2014 2013 In millions Balance at beginning of year (1) $ $ $ Trade receivables sold (2) Cash receipts (2) ) ) ) Foreign currency and other ) ) Balance at end of year (1) $ $ $ (1) Beginning and ending balance represents amounts for trade receivables sold but not yet collected. (2) In fiscal 2014, HP revised the presentation for the trade receivables sold and the cash received under the short-term financing arrangements for the fiscal year ended October 31, 2013 in order to present comparable information with that period. Inventory As of October 31 2015 2014 In millions Finished goods $ $ Purchased parts and fabricated assemblies $ $ Other Current Assets As of October 31 2015 2014 In millions Deferred tax assets—short-term $ $ Value-added taxes receivable Supplier and other receivables Prepaid and other current assets $ $ Property, Plant and Equipment As of October 31 2015 2014 In millions Land $ $ Buildings and leasehold improvements Machinery and equipment, including equipment held for lease Accumulated depreciation ) ) $ $ Depreciation expense was $3.1 billion, $3.3 billion and $3.2 billion in fiscal 2015, 2014 and 2013, respectively. The change in gross property, plant and equipment was due primarily to purchases of $3.7 billion, which were partially offset by sales and retirements totaling $2.9 billion and unfavorable currency impacts of $0.5 billion. Accumulated depreciation associated with the assets sold and retired in fiscal 2015 was $2.5 billion. Long-Term Financing Receivables and Other Assets As of October 31 2015 2014 In millions Financing receivables, net $ $ Deferred tax assets Deferred costs Other $ $ Other Accrued Liabilities As of October 31 2015 2014 In millions Accrued taxes—other $ $ Warranty Sales and marketing programs Other $ $ Other Liabilities As of October 31 2015 2014 In millions Pension, post-retirement, and post-employment liabilities $ $ Deferred revenue—long-term Deferred tax liability—long-term Tax liability—long-term Other long-term liabilities $ $ |
Financing Receivables and Opera
Financing Receivables and Operating Leases | 12 Months Ended |
Oct. 31, 2015 | |
Financing Receivables and Operating Leases | |
Financing Receivables and Operating Leases | Note 8: Financing Receivables and Operating Leases Financing receivables represent sales-type and direct-financing leases of HP and third-party products. These receivables typically have terms ranging 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 were as follows: As of October 31 2015 2014 In millions Minimum lease payments receivable $ $ Unguaranteed residual value Unearned income ) ) Financing receivables, gross Allowance for doubtful accounts ) ) Financing receivables, net Less: current portion (1) ) ) Amounts due after one year, net (1) $ $ (1) HP includes the current portion in Financing receivables and amounts due after one year, net in Long-term financing receivables and other assets in the accompanying Consolidated Balance Sheets. As of October 31, 2015, scheduled maturities of HP's minimum lease payments receivable were as follows: Fiscal year In millions 2016 $ 2017 2018 2019 2020 Thereafter Total $ 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 geographic 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 credit enhancements, such as guarantees, letters of credit or security deposits. HP classifies accounts as high risk when it considers the financing receivable to be impaired or when management believes there is a significant near-term risk of impairment. The credit risk profile of gross financing receivables, based on internally assigned ratings, was as follows: As of October 31 2015 2014 In millions Risk Rating: Low $ $ Moderate High Total $ $ 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 financing receivables with identified exposures, such as customer defaults, bankruptcy or other events, that make it unlikely HP will recover its investment. 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 considered probable, HP records a specific reserve. HP generally writes off a receivable or records a specific reserve when a receivable becomes 180 days past due, or sooner if HP determines that the receivable is not collectible. The allowance for doubtful accounts related to financing receivables and changes were as follows: As of October 31 2015 2014 2013 In millions Balance at beginning of year $ $ $ Provision for doubtful accounts Deductions, net of recoveries ) ) ) Balance at end of year $ $ $ The gross financing receivables and related allowance evaluated for loss were as follows: As of October 31 2015 2014 In millions Gross financing receivables collectively evaluated for loss $ $ Gross financing receivables individually evaluated for loss Total $ $ Allowance for financing receivables collectively evaluated for loss $ $ Allowance for financing receivables individually evaluated for loss Total $ $ 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, which is suspension of interest accrual, and considers such receivables to be non-performing at the earlier of the time at which full payment of principal and interest becomes doubtful or the receivable becomes 90 days past due. Subsequently, HP may recognize revenue on non-accrual financing receivables as payments are received, which is 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, all cash receipts are applied to the carrying amount of the financing receivable, which is the cost recovery method. In certain circumstances, such as when HP deems a delinquency to be of an administrative nature, financing receivables may accrue interest after becoming 90 days past due. The non-accrual status of a financing receivable may not impact a customer's risk rating. After all of a customer's delinquent principal and interest balances are settled, HP may return the related financing receivable to accrual status. The following table summarizes the aging and non-accrual status of gross financing receivables: As of October 31 2015 2014 In millions Billed (1) : Current 1-30 days $ $ Past due 31-60 days Past due 61-90 days Past due >90 days Unbilled sales-type and direct-financing lease receivables Total gross financing receivables $ $ Gross financing receivables on non-accrual status (2) $ $ Gross financing receivables 90 days past due and still accruing interest (2) $ $ (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 Balance Sheets were as follows: As of October 31 2015 2014 In millions Equipment leased to customers $ $ Accumulated depreciation ) ) $ $ As of October 31, 2015, minimum future rentals on non-cancelable operating leases related to leased equipment were as follows: Fiscal year In millions 2016 $ 2017 2018 2019 2020 Thereafter Total $ |
Acquisitions and Divestitures
Acquisitions and Divestitures | 12 Months Ended |
Oct. 31, 2015 | |
Acquisitions and Divestitures | |
Acquisitions and Divestitures | Note 9: Acquisitions and Divestitures Acquisitions In fiscal 2015, HP completed five acquisitions. The purchase price allocation for these acquisitions as set forth in the table below reflects various preliminary fair value estimates and analyses, including preliminary work performed by third-party valuation specialists, which are subject to change within the measurement period as valuations are finalized. The primary areas of the preliminary purchase price allocation that are not yet finalized relate to the fair values of certain tangible assets and liabilities acquired, the valuation of intangible assets acquired, certain legal matters, income and non-income based taxes, and residual goodwill. HP expects to continue to obtain information to assist it in determining the fair value of the net assets acquired at the acquisition date during the measurement period. Measurement period adjustments that HP determines to be material will be applied retrospectively to the period of acquisition in HP's Consolidated Financial Statements and, depending on the nature of the adjustments, other periods subsequent to the period of acquisition could also be affected. Pro forma results of operations for these acquisitions have not been presented because they are not material to HP's consolidated results of operations, either individually or in the aggregate. Goodwill, which represents the excess of the purchase price over the net tangible and intangible assets acquired, is not deductible for tax purposes. The following table presents the aggregate purchase price allocation, including those items that are still preliminary allocations, for HP's acquisitions in fiscal 2015: In millions Goodwill $ Amortizable intangible assets In-process research and development Net assets assumed Total fair value of consideration $ Acquisition of Aruba HP's largest acquisition in fiscal 2015 was the acquisition of Aruba, which was completed in May 2015. Aruba is a leading provider of next-generation network access solutions for the mobile enterprise. HP reported the financial results of Aruba's business in the Networking business unit within the EG segment. The acquisition date fair value of consideration of $2.8 billion consisted of cash paid for outstanding common stock, vested in-the-money stock awards and the estimated fair value of earned unvested stock awards assumed by HP. In connection with this acquisition, HP recorded approximately $1.8 billion of goodwill, $643 million of intangible assets and $153 million of IPR&D. HP is amortizing the intangible assets on a straight-line basis over an estimated weighted-average life of six years. Acquisitions in prior year In fiscal 2014, HP completed two acquisitions with a combined purchase price of $55 million, of which $12 million was recorded as goodwill and $25 million was recorded as intangible assets related to these acquisitions. Divestitures In fiscal 2015, HP completed five divestitures which resulted in $246 million of proceeds. These divestitures included HP's sale of its web-based photo sharing and photo printing service, Snapfish. Snapfish was previously reported within the Consumer Hardware business unit within the Printing segment. Additionally, HP completed the sales of its LiveVault and iManage businesses, which were previously reported within the Software segment. The gains associated with these divestitures were included in Selling, general and administrative expenses in the Consolidated Statements of Earnings. In May 2015, HP and Tsinghua Holdings jointly announced a partnership that will bring together the Chinese enterprise technology assets of Hewlett Packard Enterprise and Tsinghua University to create a Chinese provider of technology infrastructure. Under the definitive agreement, Tsinghua Holdings' subsidiary, Unisplendour Corporation, will purchase 51% of a new business called H3C, comprising Hewlett Packard Enterprise's current H3C Technologies and China-based server, storage and technology services businesses, for approximately $2.3 billion. Hewlett Packard Enterprise China will maintain 100% ownership of its existing China-based ES, Aruba, Software and Hewlett Packard Enterprise Helion Cloud businesses. Once the transaction closes, the new H3C will be the exclusive provider for Hewlett Packard Enterprise's server, storage and networking portfolio, as well as Hewlett Packard Enterprise's exclusive hardware support services provider in China, customized for that market. The transaction will be a part of Hewlett Packard Enterprise as a result of the Separation and is expected to close during the first quarter of fiscal 2016, subject to regulatory approvals and other closing conditions. In October 2015, HP signed a definitive agreement to sell the TippingPoint business to Trend Micro International for approximately $300 million. TippingPoint is a provider of next-generation intrusion prevention systems and related network security solutions. The results of TippingPoint were recorded within the Software segment. The transaction will be a part of Hewlett Packard Enterprise as a result of the Separation and is expected to close during the first quarter of fiscal 2016, subject to regulatory approvals and other closing conditions. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Oct. 31, 2015 | |
Goodwill and Intangible Assets | |
Goodwill and Intangible Assets | Note 10: Goodwill and Intangible Assets Goodwill Goodwill allocated to HP's reportable segments and changes in the carrying amount of goodwill were as follows: Personal Systems Printing Enterprise Group Enterprise Services (3) Software HP Financial Services Corporate Investments Total In millions Balance at October 31, 2013 (1)(2) $ $ $ $ $ $ $ — $ Goodwill acquired during the period — — — — — — Goodwill adjustments — — — — — — Balance at October 31, 2014 (1)(2) $ $ $ $ $ $ $ — $ Goodwill acquired during the period — — — — — Goodwill adjustments — ) ) ) ) — — ) Balance at October 31, 2015 (1) $ $ $ $ $ $ $ — $ (1) Goodwill is net of accumulated impairment losses of $14.5 billion. Of that amount, $8.0 billion relates to the ES segment, $5.7 billion relates to Software, and the remaining $0.8 billion relates to Corporate Investments. (2) In connection with the Separation, effective at the beginning of its fourth quarter of fiscal 2015, HP implemented an organizational change which resulted in the transfer of the marketing optimization solutions business from the Software segment to the Commercial Hardware business unit within the Printing segment. As a result, HP reclassified $512 million of goodwill related to the marketing optimization solutions business from the Software segment to the Printing segment. The reclassification has been reflected retrospectively for all periods presented above. (3) Goodwill relates to the MphasiS Limited reporting unit. In fiscal 2015, HP recorded approximately $2.0 billion of goodwill related to acquisitions based on its preliminary fair value estimates of the assets acquired. Goodwill adjustments primarily relate to the allocation of goodwill to the LiveVault, Snapfish and iManage businesses, which were sold during the period. Goodwill Impairments Goodwill is tested for impairment at the reporting unit level. As of October 31, 2015, our reporting units are consistent with the reportable segments identified in Note 2, except for ES, which includes two reporting units: MphasiS Limited; and the remainder of ES. Based on the results of its annual impairment tests, HP determined that no impairment of goodwill existed as of August 1, 2015. There were no goodwill impairments in fiscal 2014 and 2013. However, future goodwill impairment tests could result in a charge to net earnings. HP will continue to evaluate 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 are composed of: As of October 31, 2015 As of October 31, 2014 Gross Accumulated Amortization Accumulated Impairment Loss Net Gross Accumulated Amortization Accumulated Impairment Loss Net In millions Customer contracts, customer lists and distribution agreements $ $ ) $ ) $ $ $ ) $ ) $ Developed and core technology and patents ) ) ) ) Trade name and trade marks ) ) ) ) In-process research and development — — — — — — Total intangible assets $ $ ) $ ) $ $ $ ) $ ) $ In fiscal 2015, the decrease in gross intangible assets was due primarily to $936 million of intangible assets that became fully amortized, partially offset by intangible assets and IPR&D resulting from HP's acquisitions, primarily the acquisition of Aruba. Fully amortized intangible assets have been eliminated from gross intangible assets and accumulated amortization during the period. In fiscal 2014, $855 million of intangible assets became fully amortized and have been eliminated from gross intangible assets and accumulated amortization. HP also eliminated gross intangible assets and accumulated amortization related to the sale of a portfolio of intellectual property ("IP") in the first quarter of fiscal 2014. The weighted-average useful lives of intangible assets as of October 31, 2015 are as follows: Finite-Lived Intangible Assets Weighted-Average Useful Lives In years Customer contracts, customer lists and distribution agreements Developed and core technology and patents Trade name and trade marks As of October 31, 2015, estimated future amortization expense related to finite-lived intangible assets was as follows: Fiscal year In millions 2016 $ 2017 2018 2019 2020 Thereafter Total $ |
Fair Value
Fair Value | 12 Months Ended |
Oct. 31, 2015 | |
Fair Value. | |
Fair Value | Note 11: Fair Value Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date. Fair Value Hierarchy HP uses valuation techniques that are based upon observable and unobservable inputs. Observable inputs are developed using market data such as publicly available information and reflect the assumptions market participants would use, while unobservable inputs are developed using the best information available about the assumptions market participants would use. Assets and liabilities are classified in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement: Level 1—Quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2—Quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability and market-corroborated inputs. Level 3—Unobservable inputs for the asset or liability. The fair value hierarchy gives the highest priority to observable inputs and lowest priority to unobservable inputs. The following table presents HP's assets and liabilities that are measured at fair value on a recurring basis: As of October 31, 2015 As of October 31, 2014 Fair Value Measured Using Fair Value Measured Using Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total In millions Assets Cash Equivalents and Investments: Time deposits $ — $ $ — $ $ — $ $ — $ Money market funds — — — — Mutual funds — — — — Marketable equity securities — — Foreign bonds — — Other debt securities — — Derivative Instruments: Interest rate contracts — — — — Foreign exchange contracts — — Other derivatives — — — — Total assets $ $ $ $ $ $ $ $ Liabilities Derivative Instruments: Interest rate contracts $ — $ $ — $ $ — $ $ — $ Foreign exchange contracts — — Total liabilities $ — $ $ $ $ — $ $ $ There were no transfers between the fair value hierarchy during fiscal 2015 and 2014. 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 NAV, or models utilizing market observable inputs. The fair value of debt investments was based on quoted market prices or model-driven valuations using inputs primarily derived from or corroborated by observable market data, and, in certain instances, valuation models that utilize assumptions which cannot be corroborated with observable market data. Derivative Instruments: HP uses forward contracts, interest rate and total return swaps, and option contracts to hedge certain foreign currency and interest rate exposures. HP uses industry standard valuation models to measure fair value. Where applicable, these models project future cash flows and discount the future amounts to present value using market-based observable inputs, including interest rate curves, HP and counterparty credit risk, foreign currency rates, and forward and spot prices for currencies and interest rates. See Note 12 for a further discussion of HP's use of derivative instruments. Other Fair Value Disclosures Short- and Long-Term Debt: HP estimates the fair value of its debt primarily using an expected present value technique, which is based on observable market inputs using interest rates currently available to companies of similar credit standing for similar terms and remaining maturities, and considering its own credit risk. The portion of HP's debt that is hedged is reflected in the Consolidated 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 approximated its carrying amount of $24.7 billion at October 31, 2015. The estimated fair value of HP's short- and long-term debt was $19.9 billion at October 31, 2014, compared to its carrying amount of $19.5 billion at that date. If measured at fair value in the Consolidated Balance Sheets, short- and long-term debt would be classified in Level 2 of the fair value hierarchy. Other Financial Instruments: For the balance of HP's financial instruments, primarily accounts receivable, accounts payable and financial liabilities included in other accrued liabilities, the carrying amounts approximate fair value due to their short maturities. If measured at fair value in the Consolidated Balance Sheets, these other financial instruments would be classified in Level 2 or Level 3 of the fair value hierarchy. Non-Marketable Equity Investments and Non-Financial Assets: Elements within HP's non-marketable equity investments and non-financial assets, such as goodwill, intangible assets and property, plant and equipment, are recorded at fair value in the period an impairment charge is recognized. If measured at fair value in the Consolidated Balance Sheets, these would generally be classified in Level 3 of the fair value hierarchy. In fiscal 2015, HP determined that it would exit certain data centers. HP conducted an analysis of the respective asset group to determine if the carrying value is greater than the fair value. As a result of this assessment, HP recorded a $136 million impairment charge to Impairment of data center assets on the Consolidated Statements of Earnings. |
Financial Instruments
Financial Instruments | 12 Months Ended |
Oct. 31, 2015 | |
Financial Instruments | |
Financial Instruments | Note 12: Financial Instruments Cash Equivalents and Available-for-Sale Investments Cash equivalents and available-for-sale investments were as follows: As of October 31, 2015 As of October 31, 2014 Cost Gross Unrealized Gain Gross Unrealized Loss Fair Value Cost Gross Unrealized Gain Gross Unrealized Loss Fair Value In millions Cash Equivalents: Time deposits $ $ — $ — $ $ $ — $ — $ Money market funds — — — — Mutual funds — — — — Total cash equivalents — — — — Available-for-Sale Investments: Debt securities: Time deposits — — — — Foreign bonds — — Other debt securities — ) — ) Total debt securities ) ) Equity securities: Mutual funds — — — — Equity securities in public companies ) — Total equity securities ) — Total available-for-sale investments ) ) Total cash equivalents and available-for-sale investments $ $ $ ) $ $ $ $ ) $ All highly liquid investments with original maturities of three months or less at the date of acquisition are considered cash equivalents. As of October 31, 2015 and 2014, the carrying amount of cash equivalents approximated fair value due to the short period of time to maturity. Interest income related to cash, cash equivalents and debt securities was approximately $129 million in fiscal 2015, $136 million in fiscal 2014 and $148 million in fiscal 2013. Time deposits were primarily issued by institutions outside the U.S. as of October 31, 2015 and 2014. 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 as of October 31, 2015 and 2014 was due primarily to decline in the fair value of a debt security of $13 million and $14 million, respectively, 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 investments in available-for-sale debt securities were as follows: As of October 31, 2015 Amortized Cost Fair Value In millions Due in one year $ $ Due in one to five years Due in more than five years $ $ Equity securities in privately held companies include cost basis and equity method investments and are included in Long-term financing receivables and other assets in the Consolidated Balance Sheets. These amounted to $58 million and $97 million at October 31, 2015 and 2014, respectively. 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, interest rate swaps, total return swaps and, at times, option contracts 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 the fair value of assets and liabilities. HP does not have any leveraged derivatives and does not use derivative contracts for speculative purposes. HP may designate its derivative contracts as fair value hedges, cash flow hedges or hedges of the foreign currency exposure of a net investment in a foreign operation ("net investment hedges"). Additionally, for derivatives not designated as hedging instruments, HP categorizes those economic hedges as other derivatives. HP recognizes all derivative instruments at fair value in the Consolidated Balance Sheets. HP classifies cash flows from its derivative programs with the activities that correspond to the underlying hedged items in the Consolidated Statements of Cash Flows. As a result of its use of derivative instruments, 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 derivative contracts with carefully selected major financial institutions based on their credit ratings and other factors, and HP maintains dollar risk limits that correspond to each financial 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 reassessing the creditworthiness of its counterparties. Master netting agreements further mitigate credit exposure to counterparties by permitting HP to net amounts due from HP to counterparty against amounts due to HP from the same counterparty under certain conditions. To further 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 of the derivatives' net liability position. Collateral is generally posted within two business days. The fair value of derivatives with credit contingent features in a net liability position was $173 million and $38 million at October 31, 2015 and 2014, respectively, all of which were fully collateralized within two business days. Under HP's derivative contracts, the counterparty can terminate all outstanding trades following a covered change of control event affecting HP that results in the surviving entity being rated below a specified credit rating. This credit contingent provision did not affect HP's financial position or cash flows as of October 31, 2015 and 2014. Fair Value Hedges HP issues long-term debt primarily 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 changes in fair value resulting from changes in interest rates by achieving a primarily U.S. dollar London Interbank Offered Rate ("LIBOR")-based floating interest expense. 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 change in fair value of the derivative instrument, as well as the offsetting change in the fair value of the hedged item, in Interest and other, net in the Consolidated Statements of Earnings in the period of change. Cash Flow Hedges HP uses forward contracts and at times, option contracts designated as cash flow hedges to protect against the foreign currency exchange rate risks inherent in its forecasted net revenue and, to a lesser extent, cost of 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, hedges related to longer term procurement arrangements extend several years and forward contracts associated with sales-type and direct-financing leases and intercompany loans extend for the duration of the lease or loan term, which typically range from two to five years. For derivative instruments that are designated and qualify as cash flow hedges, HP initially records changes in fair value for the effective portion of the derivative instrument in Accumulated other comprehensive loss as a separate component of stockholders' equity in the Consolidated 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. 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. HP records the effective portion of such derivative instruments 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 Balance Sheets. Other Derivatives Other derivatives not designated as hedging instruments consist primarily of forward contracts used to hedge foreign currency-denominated balance sheet exposures. 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 of the derivative instrument, as well as the offsetting change in the fair value of the hedged item, in Interest and other, net in the Consolidated Statements of Earnings in the period of change. Hedge Effectiveness For interest rate swaps designated as fair value hedges, HP measures hedge effectiveness by offsetting the change in fair value of the hedged item with the change in fair value of the derivative. For foreign currency options and forward contracts designated as cash flow or net investment hedges, HP measures hedge effectiveness by comparing the cumulative change in fair value of the hedge contract with the cumulative change in fair value of the hedged item, both of which are based on forward rates. HP recognizes any ineffective portion of the hedge in the Consolidated Statements of Earnings in the same period in which ineffectiveness occurs. Amounts excluded from the assessment of effectiveness are recognized in the Consolidated Statements of Earnings in the period they arise. Fair Value of Derivative Instruments in the Consolidated Balance Sheets The gross notional and fair value of derivative instruments in the Consolidated Balance Sheets was as follows: As of October 31, 2015 As of October 31, 2014 Outstanding Gross Notional Other Current Assets Long-Term Financing Receivables and Other Assets Other Accrued Liabilities Long-Term Other Liabilities Outstanding Gross Notional Other Current Assets Long-Term Financing Receivables and Other Assets Other Accrued Liabilities Long-Term Other Liabilities In millions Derivatives designated as hedging instruments Fair value hedges: Interest rate contracts $ $ $ $ — $ $ $ $ $ — $ Cash flow hedges: Foreign currency contracts Net investment hedges: Foreign currency contracts Total derivatives designated as hedging instruments Derivatives not designated as hedging instruments Foreign currency contracts Other derivatives — — — — — Total derivatives not designated as hedging instruments Total derivatives $ $ $ $ $ $ $ $ $ $ Offsetting of Derivative Instruments HP recognizes all derivative instruments on a gross basis in the Consolidated Balance Sheets. HP does not offset the fair value of its derivative instruments against the fair value of cash collateral posted under its collateral security agreements. As of October 31, 2015 and 2014, information related to the potential effect of HP's master netting agreements and collateral security agreements was as follows: As of October 31, 2015 In the Consolidated Balance Sheets (vi) = (iii)–(iv)–(v) (i) (ii) (iii) = (i)–(ii) (iv) (v) Gross Amounts Not Offset Gross Amount Recognized Gross Amount Offset Net Amount Presented Derivatives Financial Collateral Net Amount In millions Derivative assets $ $ — $ $ $ (1) $ Derivative liabilities $ $ — $ $ $ (2) $ As of October 31, 2014 In the Consolidated Balance Sheets (vi) = (iii)–(iv)–(v) (i) (ii) (iii) = (i)–(ii) (iv) (v) Gross Amounts Not Offset Gross Amount Recognized Gross Amount Offset Net Amount Presented Derivatives Financial Collateral Net Amount In millions Derivative assets $ $ — $ $ $ (1) $ Derivative liabilities $ $ — $ $ $ (2) $ (1) Represents the cash collateral posted by counterparties as of the respective reporting date for HP's asset position, net of derivative amounts that could be offset, as of, generally, two business days prior to the respective reporting date. (2) Represents the collateral posted by HP through re-use of counterparty cash collateral as of the respective reporting date for HP's liability position, net of derivative amounts that could be offset, as of, generally, two business days prior to the respective reporting date. Effect of Derivative Instruments on the Consolidated Statements of Earnings The pre-tax effect of derivative instruments and related hedged items in a fair value hedging relationship for fiscal years ended October 31, 2015, 2014 and 2013 was as follows: (Loss) Gain Recognized in Income on Derivative Instruments and Related Hedged Items Derivative Instrument Location 2015 2014 2013 Hedged Item Location 2015 2014 2013 In millions In millions Interest rate contracts Interest and other, net $ ) $ $ ) Fixed-rate debt Interest and other, net $ $ ) $ The pre-tax effect of derivative instruments in cash flow and net investment hedging relationships for fiscal years ended October 31, 2015, 2014 and 2013 was as follows: Gain (Loss) Recognized in OCI on Derivatives (Effective Portion) Gain (Loss) Reclassified from Accumulated OCI Into Earnings (Effective Portion) 2015 2014 2013 Location 2015 2014 2013 In millions In millions Cash flow hedges: Foreign currency contracts $ $ $ ) Net revenue $ $ ) $ Foreign currency contracts ) ) ) Cost of products ) ) ) Foreign currency contracts ) ) Other operating expenses ) ) Foreign currency contracts ) Interest and other, net ) Total currency hedges $ $ $ ) $ $ ) $ ) Net investment hedges: Foreign currency contracts $ $ $ Interest and other, net $ — $ — $ — As of October 31, 2015, 2014 and 2013, 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. Hedge ineffectiveness for fair value, cash flow and net investment hedges was not material for fiscal 2015, 2014 and 2013. As of October 31, 2015, HP expects to reclassify an estimated net Accumulated other comprehensive gain of approximately $26 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 Statements of Earnings for fiscal 2015, 2014 and 2013 was as follows: Gain (Loss) Recognized in Income on Derivatives Location 2015 2014 2013 In millions Foreign currency contracts Interest and other, net $ $ $ Other derivatives Interest and other, net — — Interest rate contracts Interest and other, net — — Total $ $ $ |
Borrowings
Borrowings | 12 Months Ended |
Oct. 31, 2015 | |
Borrowings | |
Borrowings | Note 13: Borrowings Notes Payable and Short-Term Borrowings Notes payable and short-term borrowings, including the current portion of long-term debt, were as follows: 2015 2014 As of October 31 Amount Outstanding (1) Weighted-Average Interest Rate Amount Outstanding Weighted-Average Interest Rate In millions In millions Current portion of long-term debt $ % $ % Commercial paper (2) % % Notes payable to banks, lines of credit and other (2) % % $ $ (1) Out of current portion of long-term debt, $2.1 billion U.S. Dollar Global Notes was redeemed and repaid on November 4, 2015. (2) Commercial paper balance of $39 million and $298 million and Notes payable to banks, lines of credit and other includes $374 million and $404 million at October 31, 2015 and 2014, respectively, of borrowing- and funding-related activity associated with HPFS and its subsidiaries. Long-Term Debt As of October 31, 2015 October 31, 2014 In millions U.S. Dollar Global Notes (1) 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, paid November 2015 $ $ $750 issued at discount to par at a price of 99.932% in March 2008 at 5.5%, due March 2018, paid November 2015 2009 Shelf Registration Statement: $1,100 issued at discount to par at a price of 99.887% in September 2010 at 2.125%, paid September 2015 — $650 issued at discount to par at a price of 99.911% in December 2010 at 2.2%, due December 2015, paid November 2015 $1,350 issued at discount to par at a price of 99.827% in December 2010 at 3.75%, due December 2020 $1,000 issued at discount to par at a price of 99.958% in May 2011 at 2.65%, due June 2016, paid November 2015 $1,250 issued at discount to par at a price of 99.799% in May 2011 at 4.3%, due June 2021 $750 issued at discount to par at a price of 99.977% in September 2011 at 2.35%, paid March 2015 — $1,300 issued at discount to par at a price of 99.784% in September 2011 at 3.0%, due September 2016, paid November 2015 $1,000 issued at discount to par at a price of 99.816% in September 2011 at 4.375%, due September 2021 $1,200 issued at discount to par at a price of 99.863% in September 2011 at 6.0%, due September 2041 $650 issued at discount to par at a price of 99.946% in December 2011 at 2.625%, paid December 2014 — $850 issued at discount to par at a price of 99.790% in December 2011 at 3.3%, due December 2016, paid November 2015 $1,500 issued at discount to par at a price of 99.707% in December 2011 at 4.65%, due December 2021 $1,500 issued at discount to par at a price of 99.985% in March 2012 at 2.6%, due September 2017, paid November 2015 $500 issued at discount to par at a price of 99.771% in March 2012 at 4.05%, due September 2022 2012 Shelf Registration Statement: $750 issued at par in January 2014 at three-month USD LIBOR plus 0.94%, due January 2019 $1,250 issued at discount to par at a price of 99.954% in January 2014 at 2.75%, due January 2019 Hewlett Packard Enterprise Senior Notes $2,250 issued at discount to par at a price of 99.944% in October 2015 at 2.4%, due October 2017 — $2,650 issued at discount to par at a price of 99.872% in October 2015 at 2.8%, due October 2018 — $3,000 issued at discount to par at a price of 99.972% in October 2015 at 3.6%, due October 2020 — $1,350 issued at discount to par at a price of 99.802% in October 2015 at 4.4%, due October 2022 — $2,500 issued at discount to par at a price of 99.725% in October 2015 at 4.9%, due October 2025 — $750 issued at discount to par at a price of 99.942% in October 2015 at 6.2%, due October 2035 — $1,500 issued at discount to par at a price of 99.932% in October 2015 at 6.3%, due October 2045 — $350 issued at par in October 2015 at three-month USD LIBOR plus 1.74%, due October 2017 — $250 issued at par in October 2015 at three-month USD LIBOR plus 1.93%, due October 2018 — — EDS Senior Notes (1) $300 issued October 1999 at 7.45%, due October 2029 Other, including capital lease obligations, at 0.00%-8.30%, due in calendar years 2015-2024 (2) Fair value adjustment related to hedged debt Less: current portion ) ) Total long-term debt $ $ (1) HP may redeem some or all of the fixed-rate U.S. Dollar Global Notes and EDS Senior Notes at any time in accordance with the terms thereof. The U.S. Dollar Global Notes and EDS Senior Notes are senior unsecured debt. (2) Other, including capital lease obligations includes $196 million and $123 million as of October 31, 2015 and 2014, 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 borrowing. As disclosed in Note 12, HP uses interest rate swaps to mitigate the exposure of its debt portfolio to changes in fair value resulting from changes in interest rates by achieving a primarily U.S. dollar LIBOR-based floating interest expense. Interest rates shown in the table of long-term debt have not been adjusted to reflect the impact of any interest rate swaps. As of October 31, 2015, aggregate future maturities of debt at face value (excluding a fair value adjustment related to hedged debt of $48 million, a premium on debt issuance of $13 million and a discount on debt issuance of $25 million) were as follows: Fiscal year Aggregate future maturities of debt outstanding including capital lease obligations In millions 2016 $ 2017 2018 2019 2020 Thereafter Total $ Interest expense on borrowings recognized in the Consolidated Statements of Earnings during the fiscal years was as follows: Expense Location 2015 2014 2013 In millions Financing interest Financing interest $ $ $ Interest expense Interest and other, net Total interest expense $ $ $ Hewlett Packard Enterprise Senior Notes On October 9, 2015, Hewlett Packard Enterprise completed the offering and pricing of nine series of senior unsecured notes (the "Notes") in an aggregate principal amount of $14.6 billion which includes $14.0 billion of fixed rate notes and $600 million of floating rate notes. The interest on fixed rate notes are payable semiannually and the interest on floating-rate notes are payable quarterly. The issuance costs of $54 million are included in Other assets on the Consolidated Balance Sheets and are being amortized to Interest expense over the term of the Notes. The Notes were initially guaranteed by HP. The guarantee was automatically and unconditionally released upon the completion of the Separation on November 1, 2015. Concurrent with the issuance of the Notes, Hewlett Packard Enterprise entered into interest rate swaps to reduce the exposure of $9.5 billion of aggregate principal amount of fixed rate senior notes to changes in fair value resulting from changes in interest rates by achieving LIBOR-based floating interest expense. Extinguishment of Debt On September 30, 2015, HP commenced cash tender offers ("the Tender Offers") to purchase up to $8.85 billion outstanding debt securities in two separate offers, for (i) any and all of its outstanding 2.20% notes due December 2015, 2.65% notes due June 2016, 3.00% notes due September 2016, 3.30% notes due December 2016, 5.40% notes due March 2017, 2.60% notes due September 2017 and 5.50% notes due March 2018 and (ii) up to $2.3 billion in aggregate principal amount of its outstanding 2.75% notes due January 2019, Floating Rate notes due January 2019, 3.75% notes due December 2020, 4.30% notes due June 2021, 4.375% notes due September 2021, 4.650% notes due December 2021, 4.050% notes due September 2022 and 6.00% notes due September 2041. In the fourth quarter of fiscal 2015, HP redeemed and repaid $6.6 billion and this early extinguishment of debt resulted in a loss of $167 million, net of realized gains from fair value hedges, which was recorded as "Interest and other, net" on the Consolidated Statements of Earnings. On November 4, 2015, HP incrementally redeemed and repaid a total of $2.1 billion fixed-rate U.S. Dollar Global Notes which resulted in a loss of $66 million, net of realized gains from fair value hedges. Commercial Paper 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 provides for the issuance of commercial paper outside of the U.S. 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. On November 1, 2015, HP's Board of Directors authorized to borrow for the use and benefit of HP and HP's subsidiaries, by the issuance of commercial paper or through the execution of promissory notes, loan agreements, letters of credit, agreements for lines of credit or overdraft facilities. The total outstanding principal balance of such commercial paper issued by shall not exceed $4.0 billion or the equivalent in foreign currencies. Hewlett Packard Enterprise Commercial Paper and Credit Agreements Hewlett Packard Enterprise's Board of Directors has authorized the issuance of up to $4.0 billion in aggregate principal amount of commercial paper. Hewlett Packard Enterprise maintains two commercial paper programs: (i) a U.S. dollar-denominated commercial paper program under which, Hewlett Packard Enterprise is permitted to have issued and outstanding up to $4.0 billion unsecured commercial paper notes (the "U.S. Commercial Paper Program"), and (ii) a euro-commercial paper program under which, Hewlett Packard Enterprise is permitted to have issued and outstanding up to $3 billion unsecured commercial paper notes issued outside the U.S., (the "euro Commercial Paper Program"). The combined aggregate principal amount of commercial paper outstanding under those programs at any one time cannot exceed $4.0 billion. The Hewlett Packard Enterprise's subsidiaries has been authorized to issue up to an additional $500 million in aggregate principal amount of commercial paper. The Hewlett Packard Enterprise subsidiary's euro Commercial Paper / Certificate of Deposit Program, which provides for the issuance of commercial paper in various currencies of up to a maximum aggregate principal amount of $500 million. Credit Agreements As of October 31, 2015, HP maintained senior unsecured committed credit facilities primarily to support the issuance of commercial paper. HP had a $3.0 billion five-year credit facility that would have expired in March 2017 and a $4.5 billion five-year credit facility that would have expired in April 2019. Both facilities supported the U.S. commercial paper program and the euro commercial paper program. Commitment fees, interest rates and other terms of borrowing under the credit facilities varied based on HP's external credit ratings. HP's ability to have an outstanding U.S. commercial paper balance that exceeded the $7.5 billion supported by these credit facilities was subject to a number of factors, including liquidity conditions and business performance. In addition, the $3.0 billion five-year credit facility had been amended in September 2012 to permit borrowings in euros and British pounds, with the amounts available in euros and British pounds being limited to the U.S. dollar equivalent of $2.2 billion and $300 million, respectively. On November 1, 2015, the $3.0 billion five-year credit facility was cancelled and HP amended the $4.5 billion five-year credit facility to a revolving credit facility providing for a senior, unsecured revolving credit facility with aggregate lending commitments of $4.0 billion. Commitments under the revolving credit facility will be available until the period ending on April 2, 2019. Funds to be borrowed under this revolving credit facility may be used for general corporate purposes. Term Loan Agreement On April 30, 2015, HP entered into a credit agreement that provides for a senior unsecured delayed, multiple draw term loan facility in the aggregate principal amount of $5.0 billion. Funds borrowed under this agreement were used for general corporate purposes, including to pay expenses associated with HP's proposed plan to separate into two independent publicly traded companies and matters related to the acquisition of Aruba. In fiscal 2015, HP borrowed and repaid $3.5 billion under this credit agreement. Along with the repayment in the fourth quarter of fiscal 2015, this term loan agreement has terminated upon the Separation. Available Borrowing Resources HP's and HP's subsidiaries' resources available to obtain short-or long-term financing were as follows: As of October 31, 2015 In millions Commercial paper programs (1) $ Uncommitted lines of credit $ (1) The extent to which HP is able to utilize 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. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Oct. 31, 2015 | |
Stockholders' Equity | |
Stockholders' Equity | Note 14: Stockholders' Equity Dividends The stockholders of HP common stock are entitled to receive dividends when and as declared by HP's Board of Directors. Dividends declared were $0.67 per common share in fiscal 2015, $0.61 per common share in fiscal 2014 and $0.55 per common share in fiscal 2013. Share Repurchase Program HP's share repurchase program authorizes both open market and private repurchase transactions. In fiscal 2015, HP executed share repurchases of 75 million shares which included 0.5 million shares settled in November, 2015. In fiscal 2015, HP settled total shares for $2.9 billion. In fiscal 2014, HP executed share repurchases of 92 million shares and settled total shares for $2.7 billion. In fiscal 2013, HP executed share repurchases of 77 million shares and settled total shares for $1.5 billion. The shares repurchased in fiscal 2015, 2014 and 2013 were all open market repurchase transactions. As of October 31, 2015, HP had remaining authorization of $2.0 billion for future share repurchases under the $10.0 billion repurchase authorization approved by HP's Board of Directors on July 21, 2011. Taxes related to Other Comprehensive (Loss) Income For the fiscal years ended October 31 2015 2014 2013 In millions Tax benefit (provision) on change in unrealized (losses) gains on available-for-sale securities: Tax benefit (provision) on unrealized (losses) gains arising during the period $ $ ) $ ) ) ) Tax benefit (provision) on change in unrealized (losses) gains on cash flow hedges: Tax (provision) benefit on unrealized gains (losses) arising during the period ) ) Tax provision (benefit) on (gains) losses reclassified into earnings ) ) ) Tax benefit (provision) on change in unrealized components of defined benefit plans: Tax benefit (provision) on (losses) gains arising during the period ) Tax benefit on amortization of actuarial loss and prior service benefit ) ) ) Tax benefit (provision) on curtailments, settlements and other ) ) ) Tax (provision) benefit on change in cumulative translation adjustment ) ) Tax benefit (provision) on other comprehensive (loss) income $ $ ) $ ) Changes and reclassifications related to Other Comprehensive (Loss) Income, net of taxes For the fiscal years ended October 31 2015 2014 2013 In millions Other comprehensive (loss) income, net of taxes: Change in unrealized (losses) gains on available-for-sale securities: Unrealized (losses) gains arising during the period $ ) $ $ Gains reclassified into earnings — ) ) ) ) Change in unrealized (losses) gains on cash flow hedges: Unrealized gains (losses) arising during the period ) (Gains) losses reclassified into earnings (1) ) ) ) Change in unrealized components of defined benefit plans: (Losses) gains arising during the period ) ) Amortization of actuarial loss and prior service benefit (2) Curtailments, settlements and other ) Change in cumulative translation adjustment ) ) ) Other comprehensive (loss) income, net of taxes $ ) $ ) $ (1) Reclassification of pre-tax (gains) losses on cash flow hedges into the Consolidated Statements of Earnings was as follows: 2015 2014 2013 In millions Net revenue $ ) $ $ ) Cost of products Other operating expenses ) Interest and other, net ) ) $ ) $ $ (2) These components are included in the computation of net pension and post-retirement benefit (credit) cost in Note 4. The components of accumulated other comprehensive loss, net of taxes as of October 31, 2015 and changes during fiscal year 2015 were as follows: Net unrealized gain on available-for-sale securities Net unrealized gain (loss) on cash flow hedges Unrealized components of defined benefit plans Cumulative translation adjustment Accumulated other comprehensive loss In millions Balance at beginning of period $ $ $ ) $ ) $ ) Other comprehensive (loss) income before reclassifications ) ) ) Reclassifications of (gains) losses into earnings — ) — ) Balance at end of period $ $ ) $ ) $ ) $ ) |
Net Earnings Per Share
Net Earnings Per Share | 12 Months Ended |
Oct. 31, 2015 | |
Net Earnings Per Share | |
Net Earnings Per Share | Note 15: Net Earnings Per Share HP calculates basic net EPS using net earnings and the weighted-average number of shares outstanding during the reporting period. Diluted net EPS includes any dilutive effect of restricted stock awards, stock options, performance-based awards and shares purchased under the 2011 ESPP. The reconciliations of the numerators and denominators of each of the basic and diluted net EPS calculations were as follows: For the fiscal years ended October 31 2015 2014 2013 In millions, except per share amounts Numerator: Net earnings (1) $ $ $ Denominator: Weighted-average shares used to compute basic net EPS Dilutive effect of employee stock plans Weighted-average shares used to compute diluted net EPS Net earnings per share: Basic $ $ $ Diluted $ $ $ Anti-dilutive weighted-average options (2) (1) HP considers restricted stock awards that provide the holder with a non-forfeitable right to receive dividends to be participating securities. As of October 31, 2015, there were no restricted stock awards outstanding. For fiscal 2014 and 2013, the net earnings allocated to participating securities were not significant. (2) HP excludes options and restricted stock units where the assumed proceeds exceed the average market price from the calculation of diluted net EPS, because their effect would be anti-dilutive. The assumed proceeds of an option include the sum of its exercise price, average unrecognized compensation cost and excess tax benefits. The assumed proceeds of a restricted stock unit include the sum of its average unrecognized compensation cost and excess tax benefits. |
Litigation and Contingencies
Litigation and Contingencies | 12 Months Ended |
Oct. 31, 2015 | |
Litigation and Contingencies | |
Litigation and Contingencies | Note 16: Litigation and Contingencies HP is involved in lawsuits, claims, investigations and proceedings, including those identified below, consisting of IP, commercial, securities, employment, employee benefits and environmental matters that arise in the ordinary course of business. HP accrues a liability when management believes that it is both probable that a liability has been incurred and the amount of loss can be reasonably estimated. HP believes it has recorded adequate provisions for any such matters and, as of October 31, 2015, 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. Under the separation and distribution agreement, HP and Hewlett Packard Enterprise agreed to cooperate with each other in managing litigation and environmental matters related to both companies' businesses. The separation and distribution agreement also included provisions that assign to each company responsibility for managing pending and future litigation and environmental matters related to the general corporate matters of HP arising prior to the Separation. 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 multi-function devices ("MFDs"), 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 issued a decision on July 3, 2014 partially granting the claim of VG Wort. The German Federal Supreme Court decision provides that levies are due where the printer is used with a PC to make permitted reprographic copies in a single process under the control of the same person, but no levies are due on a printer for reprographic copies made with a "scanner-PC-printer" product chain. The case has been remitted to the Stuttgart Civil Court to assess the amount to be paid per printer unit. The industry association BITKOM and VG Wort signed a settlement agreement defining the levies due on printers sold in Germany from 2001-2007. HP opted to join the settlement agreement on August 10, 2015 and paid €68.2 million (approximately $72.0 million) in levies, excluding value added taxes, due as a result of such settlement by November 30, 2015. 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 issued a decision on July 3, 2014 partially granting the claim of VG Wort. The German Federal Supreme Court decision provides that levies are due for audio-visual copying of standing text and pictures using a PC as the last device in a single reproduction process under the control of the same person, but no levies are due on a PC for reprographic copies made using a "PC-printer" or a "scanner-PC-printer" chain. The case has been remitted to the Munich Court of Appeals to assess the amount to be paid per PC unit. 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. The case was heard by the CJEU on January 29, 2015 and on November 12, 2015, the CJEU published its judgment providing that a national legislation such as the Belgian one at issue in the main proceedings is incompatible with EU law in multiple legal points, as argued by HP. The Court of Appeal of Brussels now has to rule on the litigation between HP and Reprobel following the answers provided by the CJEU. 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. Memjet Technology Ltd. v. HP. On August 11, 2015, Memjet Technology Ltd. ("Memjet") filed a lawsuit against HP in U.S. District Court in the Southern District of California. The complaint alleges that HP infringes eight Memjet patents. The products accused of infringement are those that use the HP PageWide Technology, including the OfficeJet Pro X series, OfficeJet Enterprise X series, HP PageWide XL, wide scan printers, and printers using 4.25-inch thermal inkjet printheads, such as HP Web Presses and Photo Kiosks. On October 2, 2015, HP answered Memjet's complaint and asserted a counter-claim against Memjet for infringement of four HP patents. The products accused of infringement include various Memjet OEM printers that incorporate Memjet's printheads and print engines. On November 20, 2015, HP asserted three additional patents against Memjet. The patents asserted by both parties generally relate to inkjet printhead and print system technology. Both Memjet's and HP's respective complaints seek injunctive relief and monetary damages from the other party for alleged patent infringement. On November 16, 2015, Memjet was granted an ex parte preliminary injunction in Germany (State Court Munich), against HP Deutschland GmbH's sale and offers for sale of HP PageWide XL printers. Memjet's injunction request alleges that HP infringes a Memjet European patent. On December 4, 2015, HP filed an opposition and an application to suspend enforcement of the preliminary injunction pending a court hearing and decision. On December 9, 2015, the court denied HP's application to suspend enforcement prior to a hearing. A hearing is scheduled for January 7, 2016. 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 Electronic Data Systems Corporation ("EDS") or HP have been misclassified as exempt employees under the Fair Labor Standards Act (" FLSA") and/or in violation of the California Labor Code or other state laws. Those matters include the following: • Karlbom, et al. v. Electronic Data Systems Corporation is a purported wage and hour class action filed on March 16, 2009 in California Superior Court. The plaintiffs claim that EDS and HP information technology employees in the Infrastructure job codes working in California were misclassified as exempt from overtime and wrongfully paid under the law. On October 30, 2015, the plaintiffs filed a motion to certify a Rule 23 state class of all California-based EDS employees in the Infrastructure Associate, Infrastructure Analyst, Infrastructure Specialist and Infrastructure Specialist Senior job codes from March 16, 2005 through October 31, 2009 that they claim were improperly classified as exempt from overtime under state law. Pursuant to the separation and distribution agreement, Hewlett Packard Enterprise has been assigned responsibility for this litigation. • Benedict v. Hewlett-Packard Company is a purported class 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 February 13, 2014, the court granted the plaintiff's motion for conditional class certification. On May 7, 2015, the plaintiffs filed a motion to certify a Rule 23 state class of certain Technical Solutions Consultants in California, Massachusetts, and Colorado that they claim were improperly classified as exempt from overtime under state law. On July 30, 2015, the court dismissed the Technology Consultant and certain Field Technical Support Consultant opt-ins from the conditionally certified FLSA collective action. Pursuant to the separation and distribution agreement, Hewlett Packard Enterprise has been assigned responsibility for this litigation. India Directorate of Revenue Intelligence Proceedings. On April 30 and May 10, 2010, the India Directorate of Revenue Intelligence (the "DRI") issued show cause notices to Hewlett-Packard India Sales Private Ltd ("HP India"), a subsidiary of HP, seven HP India employees and one former HP India employee alleging that HP India underpaid customs duties while importing products and spare parts into India and seeking to recover an aggregate of approximately $370 million, plus penalties. Prior to the issuance of the show cause notices, HP India deposited approximately $16 million with the DRI and agreed to post a provisional bond in exchange for the DRI's agreement to not seize HP India products and spare parts and to not interrupt the transaction of business by HP India. On April 11, 2012, the Bangalore Commissioner of Customs issued an order on the products-related show cause notice affirming certain duties and penalties against HP India and the named individuals of approximately $386 million, of which HP India had already deposited $9 million. On December 11, 2012, HP India voluntarily deposited an additional $10 million in connection with the products-related show cause notice. The differential duty demand is subject to interest. On April 20, 2012, the Commissioner issued an order on the parts-related show cause notice affirming certain duties and penalties against HP India and certain of the named individuals of approximately $17 million, of which HP India had already deposited $7 million. After the order, HP India deposited an additional $3 million in connection with the parts-related show cause notice so as to avoid certain penalties. HP India filed appeals of the Commissioner's orders before the Customs Tribunal along with applications for waiver of the pre-deposit of remaining demand amounts as a condition for hearing the appeals. The Customs Department has also filed cross-appeals before the Customs Tribunal. On January 24, 2013, the Customs Tribunal ordered HP India to deposit an additional $24 million against the products order, which HP India deposited in March 2013. The Customs Tribunal did not order any additional deposit to be made under the parts order. In December 2013, HP India filed applications before the Customs Tribunal seeking early hearing of the appeals as well as an extension of the stay of deposit as to HP India and the individuals already granted until final disposition of the appeals. On February 7, 2014, the application for extension of the stay of deposit was granted by the Customs Tribunal until disposal of the appeals. On October 27, 2014, the Customs Tribunal commenced hearings on the cross-appeals of the Commissioner's orders. The Customs Tribunal rejected HP India's request to remand the matter to the Commissioner on procedural grounds. The hearings scheduled to reconvene on April 6, 2015 and again on November 3, 2015 were cancelled at the request of the Customs Tribunal. A new hearing date has not been set. Russia GPO and Other Anti-Corruption 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 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 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 Regional Court of Leipzig will determine whether the matter should be admitted to trial. The Polish Central Anti-Corruption Bureau is also investigating potential corrupt actions by a former employee of Hewlett-Packard Polska Sp. z o.o., a former indirect subsidiary of HP, in connection with certain public-sector transactions in Poland. HP is cooperating with these investigating agencies. On December 2, 2014, plaintiffs Petroleos Mexicanos and Pemex Exploracion filed a complaint against HP and HP Mexico in the United States District Court for the Northern District of California alleging violations of the Racketeer Influenced and Corrupt Organizations Act (RICO Act), fraudulent concealment, tortious interference, and violations of the California Unfair Competition Law in connection with alleged improper payments provided to Pemex officials by third-parties retained by HP Mexico. These allegations arise from the same subject-matter as a previously disclosed 2014 Non-Prosecution Agreement between HP Mexico and the DOJ and a simultaneous cease-and-desist order against HP issued by the Securities and Exchange Commission ("SEC"). On February 9, 2015, HP and HP Mexico filed a motion to dismiss the complaint in its entirety. On July 13, 2015, the court granted the motion to dismiss and gave the plaintiffs leave to amend their complaint. The plaintiffs filed a first amended complaint on July 31, 2015. On August 21, 2015, HP and HP Mexico filed a motion to dismiss the first amended complaint. On November 3, 2015, the parties settled the matter for no payment and the court dismissed this case with prejudice on November 4, 2015. 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 ECT's decision revoked. HP Brazil also requested an injunction suspending the application of the penalties until a final ruling on the merits of the case. The court of first instance has not issued a decision on the merits of the case, but it has denied HP Brazil's request for injunctive relief. HP Brazil appealed the denial of its request for injunctive relief to the intermediate appellate court, which issued a preliminary ruling denying the request for injunctive relief but reducing the length of the sanctions from five 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 decision to be issued in 2016 and any subsequent appeal on the merits to last several years. Pursuant to the separation and distribution agreement, Hewlett Packard Enterprise has been assigned responsibility for this litigation. Cisco Systems. On August 21, 2015, Cisco Systems, Inc. ("Cisco Systems") and Cisco Systems Capital Corporation ("Cisco Capital") filed an action in Santa Clara County Superior Court for declaratory judgment and breach of contract against HP in connection with a dispute arising out of a third-party's termination of a services contract with HP. As part of that third-party services contract, HP separately contracted with Cisco on an agreement to utilize Cisco products and services. HP prepaid the entire amount due Cisco through a financing arrangement with Cisco Capital. Following the termination of HP services contract with the third-party, HP no longer required Cisco's products and services, and, accordingly, exercised its contractual termination rights under the agreement with Cisco, and requested that Cisco apply the appropriate credit toward the remaining balance owed Cisco Capital. This lawsuit relates to the calculation of that credit under the agreement between Cisco and HP. Cisco contends that after the credit is applied, HP still owes Cisco Capital approximately $58 million. HP contends that under a proper reading of the agreement, HP owes nothing to Cisco Capital, and that Cisco owes significant amounts to HP. Pursuant to the separation and distribution agreement, Hewlett Packard Enterprise has been assigned responsibility for this litigation. 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: • 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 Foreign Corrupt Practices Act of 1977 ("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, the 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, the 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, the plaintiff filed an appeal with the United States Court of Appeals for the Ninth Circuit. On October 26, 2015, the United States Court of Appeals for the Ninth Circuit affirmed the dismissal of the action. • 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, and 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 relate Copeland II to Copeland I . On April 8, 2014, the court granted the parties' stipulation to stay the action pending resolution of Copeland I by the United States Court of Appeals for the Ninth Circuit. • 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 plaintiff filed an amended complaint on September 9, 2013, and the defendants moved to dismiss that complaint on October 24, 2013. On June 25, 2014, the court issued an order granting the defendants' motions to dismiss and on July 25, 2014, plaintiff filed a notice of appeal to the United States Court of Appeals for the Ninth Circuit. On November 4, 2014, the plaintiff-appellant filed its opening brief in the Court of Appeals for the Ninth Circuit. HP filed its answering brief on January 16, 2015 and the plaintiff-appellant's reply brief was filed on March 2, 2015. Oral argument has not yet been scheduled. Autonomy-Related Legal Matters Investigations. As a result of the findings of an ongoing investigation, HP has provided information to the U.K. Serious Fraud Office, the U.S. Department of Justice ("DOJ") and the SEC related to the accounting improprieties, disclosure failures and misrepresentations at Autonomy that occurred prior to and in connection with HP's acquisition of Autonomy. On November 21, 2012, DOJ representatives 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. On January 19, 2015, the U.K. Serious Fraud Office notified HP that it was closing its investigation and had decided to cede jurisdiction of the investigation to the U.S. authorities. HP is cooperating with the DOJ and the SEC, whose investigations are ongoing. Litigation. As described below, HP is involved in various stockholder litigation relating to, among other things, its October 2011 acquisition of Autonomy and 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: • 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. The lead plaintiff filed a motion for class certification on November 4, 2014 and, on December 15, 2014, the defendants filed their opposition to the motion. On Ju |
Guarantees, Indemnifcations, ad
Guarantees, Indemnifcations, adn Warranties | 12 Months Ended |
Oct. 31, 2015 | |
Guarantees | |
Guarantees, Indemnifications and Warranties | Note 17: Guarantees, Indemnifications and Warranties Guarantees In the ordinary course of business, HP may issue performance guarantees to certain of its clients, customers and other parties pursuant to which HP has guaranteed the performance obligations of third parties. Some of those guarantees may be backed by standby letters of credit or surety bonds. In general, HP would be obligated to perform over the term of the guarantee in the event a specified triggering event occurs as defined by the guarantee. HP believes the likelihood of having to perform under a material guarantee is remote. 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 having 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 a third party to such arrangement from any losses incurred relating to the services they perform on behalf of HP or for losses arising from certain events as defined within the particular contract, which may include, for example, litigation or claims relating to past performance. HP also provides indemnifications to certain vendors and customers against claims of IP infringement made by third parties arising from the vendors' and customers' use of HP's software products and services and certain other matters. Some indemnifications may not be subject to maximum loss clauses. Historically, payments made related to these indemnifications have been immaterial. Under the separation and distribution agreement, HP agreed to indemnify Hewlett Packard Enterprise, each of its subsidiaries and each of their respective directors, officers and employees from and against all liabilities relating to, arising out of or resulting from, among other matters, the liabilities allocated to HP as part of the Separation. Hewlett Packard Enterprise similarly agreed to indemnify HP, each of its subsidiaries and each of their respective directors, officers and employees from and against all liabilities relating to, arising out of or resulting from, among other matters, the liabilities allocated to Hewlett Packard Enterprise as part of the Separation. HP expects Hewlett Packard Enterprise to fully perform under the terms of the separation and distribution agreement. For information on the cross-indemnifications related to the tax matter agreements and litigations effective upon the Separation on November 1, 2015, see Note 6 "Taxes on Earnings" and Note 16 "Litigation and Contingencies", respectively. Warranties HP accrues the estimated cost of product warranties at the time it recognizes revenue. HP engages in extensive product quality programs and processes, including actively monitoring and evaluating the quality of its component suppliers; however, contractual warranty terms, repair costs, product call rates, average cost per call, current period product shipments and ongoing product failure rates, as well as specific product class failures outside of HP's baseline experience, affect the estimated warranty obligation. HP's aggregate product warranty liabilities and changes were as follows: As of October 31 2015 2014 In millions Balance at beginning of year $ $ Accruals for warranties issued Adjustments related to pre-existing warranties (including changes in estimates) ) Settlements made (in cash or in kind) ) ) Balance at end of year $ $ |
Commitments
Commitments | 12 Months Ended |
Oct. 31, 2015 | |
Commitments | |
Commitments | Note 18: Commitments Lease Commitments HP leases certain real and personal property under non-cancelable operating leases. Certain leases require HP to pay property taxes, insurance and routine maintenance and include renewal options and escalation clauses. Rent expense was approximately $1.0 billion in fiscal 2015, 2014 and 2013. Property under capital leases was comprised primarily of equipment and furniture. Capital lease assets included in Property, plant and equipment in the Consolidated Balance Sheets were $207 million and $229 million as of October 31, 2015 and 2014, respectively. Accumulated depreciation on the property under capital leases was $187 million and $207 million as of October 31, 2015 and 2014, respectively. As of October 31, 2015, future minimum operating lease commitments were as follows: Fiscal year In millions 2016 $ 2017 2018 2019 2020 Thereafter Less: Sublease rental income ) Total (1) $ (1) Subsequent to the Separation, HP expects the total remaining future minimum operating lease commitments to be approximately $367 million. Unconditional Purchase Obligations As of October 31, 2015, HP had unconditional purchase obligations of approximately $2.7 billion. These unconditional purchase obligations include agreements to purchase goods or services that are enforceable and legally binding on HP and that specify all significant terms, including fixed or minimum quantities to be purchased, fixed, minimum or variable price provisions and the approximate timing of the transaction. These unconditional purchase obligations are related principally to inventory, service support and other items. Unconditional purchase obligations exclude agreements that are cancelable without penalty. As of October 31, 2015, future unconditional purchase obligations were as follows: Fiscal year In millions 2016 $ 2017 2018 2019 2020 Thereafter Total (1) $ (1) Subsequent to the Separation, HP expects the total remaining future unconditional purchase obligations to be approximately $915 million. |
Overview and Summary of Signi26
Overview and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Oct. 31, 2015 | |
Overview and Summary of Significant Accounting Policies | |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements of HP and its wholly-owned subsidiaries are prepared in conformity with United States ("U.S.") generally accepted accounting principles ("GAAP"). HP has eliminated all intercompany accounts and transactions. The historical results of operations, financial position, and cash flows of Hewlett Packard Enterprise are included in the consolidated financial statements of HP for each of the fiscal years included in this report and will be reported as discontinued operations beginning in the first quarter of fiscal 2016. |
Principles of Consolidation | Principles of Consolidation The Consolidated Financial Statements include the accounts of HP and its subsidiaries and affiliates in which HP has a controlling financial interest or is the primary beneficiary. HP accounts for investments in companies over which HP has the ability to exercise significant influence but does not hold a controlling interest under the equity method, and HP records its proportionate share of income or losses in Interest and other, net in the Consolidated Statements of Earnings. HP presents non-controlling interests as a separate component within Total stockholder's equity in the Consolidated Balance Sheets. Net earnings attributable to the non-controlling interests are eliminated within Interest and other, net in the Consolidated Statements of Earnings and are not presented separately as they were not material for any period presented. |
Reclassifications | Reclassifications HP has made certain segment and business unit realignments in order to optimize its operating structure. Reclassifications of certain 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 ("EPS"). See Note 2 for a further discussion of HP's segment reorganization. |
Use of Estimates | Use of Estimates The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in HP's Consolidated Financial Statements and accompanying notes. Actual results could differ materially from those estimates. |
Foreign Currency Translation | Foreign Currency Translation HP predominately uses the U.S. dollar as its functional currency. Assets and liabilities denominated in non-U.S. dollars are remeasured into U.S. dollars at current exchange rates for monetary assets and liabilities and at historical exchange rates for nonmonetary assets and liabilities. Net revenue, costs and expenses denominated in non-U.S. dollars are recorded in U.S. dollars at monthly average exchange rates prevailing during the period. HP includes gains or losses from foreign currency remeasurement in Interest and other, net in the Consolidated Statements of Earnings. Certain non-U.S. subsidiaries designate the local currency as their functional currency, and HP records the translation of their assets and liabilities into U.S. dollars at the balance sheet date as translation adjustments and includes them as a component of Accumulated other comprehensive loss in the Consolidated Balance Sheets. |
Accounting Pronouncements | Accounting Pronouncements In November 2015, the Financial Accounting Standards Board ("FASB") issued an accounting standards update for income taxes, which requires deferred tax assets and liabilities to be classified as noncurrent in a classified statement of financial position. The new accounting guidance is effective for annual reporting periods beginning after December 15, 2016 and interim periods therein. Early adoption is permitted for all entities as of the beginning of interim or annual reporting periods. HP is currently assessing the impact of this adoption on its Consolidated Financial Statements, and plans to adopt for its interim and annual reporting period beginning November 1, 2015. In April 2015, the FASB amended the existing accounting standards for intangible assets. The amendments provide explicit guidance to customers in determining the accounting for fees paid in a cloud computing arrangement, wherein the arrangements that do not convey a software license to the customer are accounted for as service contracts. HP is required to adopt the guidance in the first quarter of fiscal 2017; however early adoption is permitted as is retrospective application. HP is currently evaluating the impact of these amendments on its Consolidated Financial Statements. In April 2015, the FASB amended the existing accounting standards for imputation of interest. The amendments require that debt issuance costs related to a recognized debt liability be presented on the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by these amendments. HP is required to adopt the guidance in the first quarter of fiscal 2017. Early adoption is permitted. The amendments should be applied retrospectively with the adjusted balance sheet of each individual period presented, in order to reflect the period-specific effects of applying the new guidance. HP is currently evaluating the timing and the impact of these amendments on its Consolidated Financial Statements. In May 2014, the FASB amended the existing accounting standards for revenue recognition. The amendments are based on the principle that revenue should be recognized to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In August 2015, the FASB issued an accounting standard update for a one-year deferral of the effective date, with an option of applying the standard on the original effective date, which for HP is the first quarter of fiscal 2018. In accordance with this deferral, HP is required to adopt these amendments in the first quarter of fiscal 2019. The amendments may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the date of initial application. HP is continuing to evaluate the impact of these amendments and the transition alternatives on its Consolidated Financial Statements. In April 2014, the FASB issued guidance which changes the criteria for identifying a discontinued operation. The guidance limits the definition of a discontinued operation to the disposal of a component or group of components that is disposed of or is classified as held for sale and represents a strategic shift that has, or will have, a major effect on an entity's operations and financial results. HP is required to adopt the guidance in the first quarter of fiscal 2016. |
Revenue Recognition | Revenue Recognition General HP recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred or services are rendered, the sales price or fee is fixed or determinable, and collectability is reasonably assured. Additionally, HP recognizes hardware revenue on sales to channel partners, including resellers, distributors or value-added solution providers at the time of delivery when the channel partners have economic substance apart from HP, and HP has completed its obligations related to the sale. HP generally recognizes revenue for its standalone software sales to channel partners on receipt of evidence that the software has been sold to a specific end user. HP limits the amount of revenue recognized for delivered elements to the amount that is not contingent on the future delivery of products or services, future performance obligations or subject to customer-specified refund or return rights. HP reduces revenue for customer and distributor programs and incentive offerings, including price protection, rebates, promotions, other volume-based incentives and expected returns, at the later of the date of revenue recognition or the date the sales incentive is offered. Future market conditions and product transitions may require HP to take actions to increase customer incentive offerings, possibly resulting in an incremental reduction of revenue at the time the incentive is offered. For certain incentive programs, HP estimates the number of customers expected to redeem the incentive based on historical experience and the specific terms and conditions of the incentive. In instances when revenue is derived from sales of third-party vendor products or services, HP records revenue on a gross basis when HP is a principal to the transaction and on a net basis when HP is acting as an agent between the customer and the vendor. HP considers several factors to determine whether it is acting as a principal or an agent, most notably whether HP is the primary obligor to the customer, has established its own pricing and has inventory and credit risks. HP reports revenue net of any taxes collected from customers and remitted to government authorities, with the collected taxes recorded as current liabilities until remitted to the relevant government authority. Multiple element arrangements When a sales arrangement contains multiple elements or deliverables, such as hardware and software products, and/or services, HP allocates revenue to each element based on a selling price hierarchy. The selling price for a deliverable is based on its vendor specific objective evidence ("VSOE") of selling price, if available, third-party evidence ("TPE") if VSOE of selling price is not available, or estimated selling price ("ESP") if neither VSOE of selling price nor TPE is available. HP establishes VSOE of selling price using the price charged for a deliverable when sold separately and, in rare instances, using the price established by management having the relevant authority. HP establishes TPE of selling price by evaluating largely similar and interchangeable competitor products or services in standalone sales to similarly situated customers. HP establishes ESP based on management judgment considering internal factors such as margin objectives, pricing practices and controls, customer segment pricing strategies and the product life cycle. Consideration is also given to market conditions such as competitor pricing strategies and technology industry life cycles. In most arrangements with multiple elements, HP allocates the transaction price to the individual units of accounting at inception of the arrangement based on their relative selling price. In multiple element arrangements that include software that is more-than-incidental, HP allocates the transaction price to the individual units of accounting for the non-software deliverables and to the software deliverables as a group using the relative selling price of each of the deliverables in the arrangement based on the selling price hierarchy. If the arrangement contains more than one software deliverable, the transaction price allocated to the group of software deliverables is then allocated to each component software deliverable. HP evaluates each deliverable in an arrangement to determine whether it represents a separate unit of accounting. A deliverable constitutes a separate unit of accounting when it has standalone value to the customer. For elements with no standalone value, HP recognizes revenue consistent with the pattern of the undelivered elements. If the arrangement includes a customer-negotiated refund or return right or other contingency relative to the delivered items, and the delivery and performance of the undelivered items is considered probable and substantially within HP's control, the delivered element constitutes a separate unit of accounting. In arrangements with combined units of accounting, changes in the allocation of the transaction price among elements may impact the timing of revenue recognition for the contract but will not change the total revenue recognized for the contract. Product revenue Hardware Under HP's standard terms and conditions of sale, HP transfers title and risk of loss to the customer at the time product is delivered to the customer and recognizes revenue accordingly, unless customer acceptance is uncertain or significant obligations to the customer remain. HP reduces revenue for estimated customer returns, price protection, rebates and other programs offered under sales agreements established by HP with its distributors and resellers. HP records revenue from the sale of equipment under sales-type leases as product revenue at the inception of the lease. HP accrues the estimated cost of post-sale obligations, including standard product warranties, based on historical experience at the time HP recognizes revenue. Software HP recognizes revenue from perpetual software licenses at the inception of the license term, assuming all revenue recognition criteria have been satisfied. Term-based software license revenue is generally recognized ratably over the term of the license. HP uses the residual method to allocate revenue to software licenses at inception of the arrangement when VSOE of fair value for all undelivered elements, such as post-contract customer support, exists and all other revenue recognition criteria have been satisfied. HP recognizes revenue from maintenance and unspecified upgrades or updates provided on a when-and- if-available basis ratably over the period during which such items are delivered. HP recognizes revenue for hosting or software-as-a-service ("SaaS") arrangements as the service is delivered, generally on a straight-line basis, over the contractual period of performance. In hosting arrangements, HP considers the rights provided to the customer (e.g. whether the customer has the contractual right to take possession of the software at any time during the hosting period without significant penalty and the feasibility of the customer to operate or contract with another vendor to operate the software) in determining whether the arrangement includes the sale of a software license. In hosting arrangements where software licenses are sold, license revenue is generally recognized according to whether perpetual or term licenses are sold, when all other revenue recognition criteria are satisfied. Services revenue HP recognizes revenue from fixed-price support or maintenance contracts, including extended warranty contracts and software post-contract customer support agreements, ratably over the contract period and recognizes the costs associated with these contracts as incurred. For time and material contracts, HP recognizes revenue as services are rendered and recognizes costs as they are incurred. HP recognizes revenue from certain fixed-price contracts, such as consulting arrangements, as work progresses over the contract period on a proportional performance basis, as determined by the percentage of labor costs incurred to date compared to the total estimated labor costs of a contract. HP recognizes revenue on fixed-price contracts for design and build projects (to design, develop and construct software and systems) using the percentage-of-completion method. HP uses the cost-to-cost method to measure progress toward completion as determined by the percentage of cost incurred to date compared to the total estimated costs of the project. Estimates of total project costs for fixed-price contracts are regularly revised during the life of a contract. Provisions for estimated losses on fixed-priced contracts are recognized in the period when such losses become known. If reasonable and reliable cost estimates for a project cannot be made, HP uses the completed contract method and recognizes revenue and costs upon service completion. HP generally recognizes outsourcing services revenue in the period when the service is provided and the amount earned is not contingent on the occurrence of any future event. HP recognizes revenue using an objective measure of output for unit-priced contracts. Revenue for fixed-price outsourcing contracts with periodic billings is recognized on a straight-line basis if the service is provided evenly during the contract term. Provisions for estimated losses on outsourcing arrangements are recognized in the period when such losses become probable and estimable. HP recognizes revenue from operating leases on a straight-line basis as service revenue over the rental period. Financing income Sales-type and direct-financing leases produce financing income, which HP recognizes at consistent rates of return over the lease term. Deferred revenue and deferred costs HP records amounts invoiced to customers in excess of revenue recognized as deferred revenue until the revenue recognition criteria are satisfied. HP records revenue that is earned and recognized in excess of amounts invoiced on services contracts as trade receivables. Deferred revenue represents amounts invoiced in advance for product support contracts, software customer support contracts, outsourcing startup services work, consulting and integration projects, product sales or leasing income. HP recognizes costs associated with outsourcing contracts as incurred, unless such costs are considered direct and incremental to the startup phase of the contract, in which case HP defers these costs during the startup phase and subsequently amortizes such costs over the period that outsourcing services are provided, once those services commence. HP amortizes deferred contract costs on a straight-line basis over the remaining term of the contract unless facts and circumstances of the contract indicate a shorter period is more appropriate. Based on actual and projected contract financial performance indicators, HP analyzes the recoverability of deferred contract costs using the undiscounted estimated cash flows of the contract over its remaining term. If such undiscounted cash flows are insufficient to recover the carrying amount of deferred contract costs and long-lived assets directly associated with the contract, the deferred contract costs are first impaired. If a cash flow deficiency remains after reducing the carrying amount of the deferred contract costs to zero, HP evaluates any remaining long-lived assets related to that contract for impairment. |
Shipping and handling | Shipping and Handling HP includes costs related to shipping and handling in Cost of products. |
Stock-Based Compensation | Stock-Based Compensation HP determines stock-based compensation expense based on the measurement date fair value of the award. HP recognizes compensation cost only for those awards expected to meet the service and performance vesting conditions on a straight-line basis over the requisite service period of the award. HP determines compensation costs at the aggregate grant level for service-based awards and at the individual vesting tranche level for awards with performance and/or market conditions. HP estimates the forfeiture rate based on its historical experience. HP utilizes the Black-Scholes-Merton option pricing formula to estimate the fair value of stock options subject to service-based vesting conditions. 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. |
Retirement and Post-Retirement Plans | Retirement and Post-Retirement Plans HP has various defined benefit, other contributory and noncontributory retirement and post-retirement plans. HP generally amortizes unrecognized actuarial gains and losses on a straight-line basis over the average remaining estimated service life of participants. In some cases, HP amortizes actuarial gains and losses using the corridor approach. See Note 4 for a full description of these plans and the accounting and funding policies. |
Advertising | Advertising Costs to produce advertising are expensed as incurred during production. Costs to communicate advertising are expensed when the advertising is first run. Such costs totaled approximately $859 million in fiscal 2015, $834 million in fiscal 2014 and $867 million in fiscal 2013. |
Restructuring | Restructuring HP records charges associated with management-approved restructuring plans to reorganize one or more of HP's business segments, to remove duplicative headcount and infrastructure associated with business acquisitions or to simplify business processes and accelerate innovation. Restructuring charges can include severance costs to eliminate a specified number of employees, infrastructure charges to vacate facilities and consolidate operations, and contract cancellation costs. HP records restructuring charges based on estimated employee terminations and site closure and consolidation plans. HP accrues for severance and other employee separation costs under these actions when it is probable that benefits will be paid and the amount is reasonably estimable. The rates used in determining severance accruals are based on existing plans, historical experiences and negotiated settlements. |
Taxes on Earnings | Taxes on Earnings HP recognizes deferred tax assets and liabilities for the expected tax consequences of temporary differences between the tax bases of assets and liabilities and their reported amounts using enacted tax rates in effect for the year the differences are expected to reverse. HP records a valuation allowance to reduce the deferred tax assets to the amount that is more likely than not to be realized. HP records accruals for uncertain tax positions when HP believes that it is not more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. HP makes adjustments to these accruals when facts and circumstances change, such as the closing of a tax audit or the refinement of an estimate. The provision for income taxes includes the effects of adjustments for uncertain tax positions, as well as any related interest and penalties. HP recognizes interest income from favorable settlements and interest expense and penalties accrued on unrecognized tax benefits in Provision for taxes in the Consolidated Statements of Earnings 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. When the local tax treatment of the intercompany licensing arrangements differs from U.S. GAAP treatment, deferred taxes are recognized. |
Accounts Receivable | Accounts Receivable HP establishes an allowance for doubtful accounts for accounts receivable. HP records a specific reserve for individual accounts when HP becomes aware of specific customer circumstances, such as in the case of a bankruptcy filing or deterioration in the customer's operating results or financial position. If there are additional changes in circumstances related to the specific customer, HP further adjusts estimates of the recoverability of receivables. HP maintains bad debt reserves for all other customers based on a variety of factors, including the use of third-party credit risk models that generate quantitative measures of default probabilities based on market factors, the financial condition of customers, the length of time receivables are past due, trends in the weighted-average risk rating for the portfolio, macroeconomic conditions, information derived from competitive benchmarking, significant one-time events and historical experience. The past due or delinquency status of a receivable is based on the contractual payment terms of the receivable. |
Concentrations of Risk | Concentrations of Risk Financial instruments that potentially subject HP to significant concentrations of credit risk consist principally of cash and cash equivalents, investments, receivables from trade customers and contract manufacturers, financing receivables and derivatives. HP maintains cash and cash equivalents, investments, derivatives and certain other financial instruments with various financial institutions. These financial institutions are located in many different geographic regions, and HP's policy is designed to limit exposure from any particular institution. As part of its risk management processes, HP performs periodic evaluations of the relative credit standing of these financial institutions. HP has not sustained material credit losses from instruments held at these financial institutions. HP utilizes derivative contracts to protect against the effects of foreign currency and interest rate exposures. Such contracts involve the risk of non-performance by the counterparty, which could result in a material loss. HP sells a significant portion of its products through third-party distributors and resellers and, as a result, maintains individually significant receivable balances with these parties. If the financial condition or operations of these distributors' and resellers' aggregated business deteriorates substantially, HP's operating results could be adversely affected. The ten largest distributor and reseller receivable balances, which were concentrated primarily in North America and Europe, collectively represented 18% and 20% of gross accounts receivable as of October 31, 2015 and 2014, respectively. No single customer accounts for more than 10% of gross accounts receivable. Credit risk with respect to other accounts receivable and financing receivables is generally diversified due to the large number of entities comprising HP's customer base and their dispersion across many different industries and geographic regions. HP performs ongoing credit evaluations of the financial condition of its third-party distributors, resellers and other customers and may require collateral, such as letters of credit and bank guarantees, in certain circumstances. HP utilizes outsourced contract manufacturers around the world to manufacture HP-designed products. HP may purchase product components from suppliers and sell those components to its contract manufacturers thereby creating receivable balances from contract manufacturers. The three largest contract manufacturer receivable balances collectively represented 60% and 65% of HP's receivables from contract manufacturers of $1.0 billion as of October 31, 2015 and 2014, respectively. HP includes receivables from contract manufacturers in Other current assets in the Consolidated Balance Sheets on a gross basis. HP's credit risk associated with these receivables is mitigated wholly or in part, by the amount HP owes to these outsourced contract manufacturers, as HP generally has the legal right to offset its payables to contract manufacturers against these receivables. HP does not reflect the sale of these components in revenue and does not recognize any profit on these component sales until the related products are sold by HP, at which time any profit is recognized as a reduction to cost of sales. HP obtains a significant number of components from single source suppliers due to technology, availability, price, quality or other considerations. The loss of a single source supplier, the deterioration of HP's relationship with a single source supplier, or any unilateral modification to the contractual terms under which HP is supplied components by a single source supplier could adversely affect HP's revenue and gross margins. |
Inventory | Inventory HP values inventory at the lower of cost or market. Cost is computed using standard cost which approximates actual cost on a first-in, first-out basis. Adjustments to reduce the cost of inventory to its net realizable value are made, if required, for estimated excess or o bsolescence . |
Property, Plant and Equipment | Property, Plant and Equipment HP states property, plant and equipment at cost less accumulated depreciation. HP capitalizes additions and improvements and expenses maintenance and repairs as incurred. Depreciation expense is recognized on a straight-line basis over the estimated useful lives of the assets. Estimated useful lives are five to 40 years for buildings and improvements and three to 15 years for machinery and equipment. HP depreciates leasehold improvements over the life of the lease or the asset, whichever is shorter. HP depreciates equipment held for lease over the initial term of the lease to the equipment's estimated residual value. The estimated useful lives of assets used solely to support a customer services contract generally do not exceed the term of the customer contract. On retirement or disposition, the asset cost and related accumulated depreciation are removed from the Consolidated Balance Sheets with any gain or loss recognized in the Consolidated Statements of Earnings. HP capitalizes certain internal and external costs incurred to acquire or create internal use software, principally related to software coding, designing system interfaces and installation and testing of the software. HP amortizes capitalized internal use software costs using the straight-line method over the estimated useful lives of the software, generally from three to five years. |
Business Combinations | Business Combinations HP includes the results of operations of acquired businesses in HP's consolidated results prospectively from the date of acquisition. HP allocates the fair value of purchase consideration to the assets acquired, including in-process research and development ("IPR&D"), liabilities assumed, and non-controlling interests in the acquired entity generally based on their fair values at the acquisition date. IPR&D is initially capitalized at fair value as an intangible asset with an indefinite life and assessed for impairment thereafter. When the IPR&D project is complete, it is reclassified as an amortizable purchased intangible asset and is amortized over its estimated useful life. If an IPR&D project is abandoned, HP will record a charge for the value of the related intangible asset to HP's Consolidated Statement of Earnings in the period it is abandoned. The excess of the fair value of purchase consideration over the fair value of these assets acquired, liabilities assumed and non-controlling interests in the acquired entity is recorded as goodwill. The primary items that generate goodwill include the value of the synergies between the acquired company and HP and the value of the acquired assembled workforce, neither of which qualifies for recognition as an intangible asset. Acquisition-related expenses and post-acquisition restructuring costs are recognized separately from the business combination and are expensed as incurred. |
Goodwill | Goodwill HP reviews goodwill for impairment annually and whenever events or changes in circumstances indicate the carrying amount of goodwill may not be recoverable. While HP is permitted to conduct a qualitative assessment to determine whether it is necessary to perform a two-step quantitative goodwill impairment test, for its annual goodwill impairment test in the fourth quarter of fiscal 2015, HP performed a quantitative test for all of its reporting units. Goodwill is tested for impairment at the reporting unit level. As of October 31, 2015, HP's reporting units are consistent with the reportable segments identified in Note 2, except for Enterprise Services ("ES"), which consists of two reporting units: MphasiS Limited and the remainder of ES. In the first step of the impairment test, HP compares the fair value of each reporting unit to its carrying amount. HP estimates the fair value of its reporting units using a weighting of fair values derived most significantly from the income approach, and to a lesser extent, the market approach. Under the income approach, HP estimates the fair value of a reporting unit based on the present value of estimated future cash flows. HP bases cash flow projections on management's estimates of revenue growth rates and operating margins, taking into consideration industry and market conditions. HP bases the discount rate on the weighted-average cost of capital adjusted for the relevant risk associated with business-specific characteristics and the uncertainty related to the reporting unit's ability to execute on the projected cash flows. Under the market approach, HP estimates fair value based on market multiples of revenue and earnings derived from comparable publicly-traded companies with similar operating and investment characteristics as the reporting unit. HP weights the fair value derived from the market approach depending on the level of comparability of these publicly-traded companies to the reporting unit. When market comparables are not meaningful or not available, HP estimates the fair value of a reporting unit using only the income approach. For the MphasiS Limited reporting unit, HP utilized the quoted market price in an active market to estimate fair value. In order to assess the reasonableness of the estimated fair value of HP's reporting units, HP compares the aggregate reporting unit fair value to HP's market capitalization and calculates an implied control premium (the excess of the sum of the reporting units' fair value over HP's market capitalization). HP evaluates the control premium by comparing it to observable control premiums from recent comparable transactions. If the implied control premium is not believed to be reasonable in light of these recent transactions, HP reevaluates reporting unit fair values, which may result in an adjustment to the discount rate and/or other assumptions. This reevaluation could result in a change to the estimated fair value for certain or all reporting units. If the fair value of a reporting unit exceeds the carrying amount of the net assets assigned to that reporting unit, goodwill is not impaired and no further testing is required. If the fair value of the reporting unit is less than its carrying amount, then HP performs the second step of the goodwill impairment test to measure the amount of impairment loss, if any. In the second step, HP measures the reporting unit's assets, including any unrecognized intangible assets, liabilities and non-controlling interests at fair value in a hypothetical analysis to calculate the implied fair value of goodwill for the reporting unit in the same manner as if the reporting unit was being acquired in a business combination. If the implied fair value of the reporting unit's goodwill is less than its carrying amount, the difference is recorded as an impairment loss. |
Intangible Assets and Long-Lived Assets | Intangible Assets and Long-Lived Assets HP reviews intangible assets with finite lives and long-lived assets for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. HP assesses the recoverability of assets based on the estimated undiscounted future cash flows expected to result from the use and eventual disposition of the asset. If the undiscounted future cash flows are less than the carrying amount, the asset is impaired. HP measures the amount of impairment loss, if any, as the difference between the carrying amount of the asset and its fair value using an income approach or, when available and appropriate, using a market approach. HP amortizes intangible assets with finite lives using the straight-line method over the estimated economic lives of the assets, ranging from one to ten years. |
Debt and Marketable Equity Securities | Debt and Marketable Equity Securities Investments Debt and marketable equity securities are generally considered available-for-sale and are reported at fair value with unrealized gains and losses, net of applicable taxes, in Accumulated other comprehensive loss in the Consolidated Balance Sheets. Realized gains and losses for available-for-sale securities are calculated based on the specific identification method and included in Interest and other, net in the Consolidated Statements of Earnings. HP monitors its investment portfolio for potential impairment on a quarterly basis. When the carrying amount of an investment in debt securities exceeds its fair value and the decline in value is determined to be other-than-temporary (i.e., when HP does not intend to sell the debt securities and it is not more likely than not that HP will be required to sell the debt securities prior to anticipated recovery of its amortized cost basis), HP records an impairment charge to Interest and other, net in the amount of the credit loss and the balance, if any, is recorded in Accumulated other comprehensive loss in the Consolidated Balance Sheets. |
Derivatives | Derivatives HP uses derivative instruments, primarily forwards, swaps, and at times, options, to hedge certain foreign currency and interest rate exposures. HP also may use other derivative instruments not designated as hedges, such as forwards used to hedge foreign currency balance sheet exposures. HP does not use derivative financial instruments for speculative purposes. See Note 12 for a full description of HP's derivative financial instrument activities and related accounting policies. Equity securities in privately held companies include cost basis and equity method investments and are included in Long-term financing receivables and other assets in the Consolidated Balance Sheets. As part of its risk management strategy, HP uses derivative instruments, primarily forward contracts, interest rate swaps, total return swaps and, at times, option contracts to hedge certain foreign currency, interest rate and, 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 the fair value of assets and liabilities. HP does not have any leveraged derivatives and does not use derivative contracts for speculative purposes. HP may designate its derivative contracts as fair value hedges, cash flow hedges or hedges of the foreign currency exposure of a net investment in a foreign operation ("net investment hedges"). Additionally, for derivatives not designated as hedging instruments, HP categorizes those economic hedges as other derivatives. HP recognizes all derivative instruments at fair value in the Consolidated Balance Sheets. HP classifies cash flows from its derivative programs with the activities that correspond to the underlying hedged items in the Consolidated Statements of Cash Flows. As a result of its use of derivative instruments, 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 derivative contracts with carefully selected major financial institutions based on their credit ratings and other factors, and HP maintains dollar risk limits that correspond to each financial 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 reassessing the creditworthiness of its counterparties. Master netting agreements further mitigate credit exposure to counterparties by permitting HP to net amounts due from HP to counterparty against amounts due to HP from the same counterparty under certain conditions. To further 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 of the derivatives' net liability position. Collateral is generally posted within two business days. The fair value of derivatives with credit contingent features in a net liability position was $173 million and $38 million at October 31, 2015 and 2014, respectively, all of which were fully collateralized within two business days. Under HP's derivative contracts, the counterparty can terminate all outstanding trades following a covered change of control event affecting HP that results in the surviving entity being rated below a specified credit rating. This credit contingent provision did not affect HP's financial position or cash flows as of October 31, 2015 and 2014. Fair Value Hedges HP issues long-term debt primarily 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 changes in fair value resulting from changes in interest rates by achieving a primarily U.S. dollar London Interbank Offered Rate ("LIBOR")-based floating interest expense. 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 change in fair value of the derivative instrument, as well as the offsetting change in the fair value of the hedged item, in Interest and other, net in the Consolidated Statements of Earnings in the period of change. Cash Flow Hedges HP uses forward contracts and at times, option contracts designated as cash flow hedges to protect against the foreign currency exchange rate risks inherent in its forecasted net revenue and, to a lesser extent, cost of 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, hedges related to longer term procurement arrangements extend several years and forward contracts associated with sales-type and direct-financing leases and intercompany loans extend for the duration of the lease or loan term, which typically range from two to five years. For derivative instruments that are designated and qualify as cash flow hedges, HP initially records changes in fair value for the effective portion of the derivative instrument in Accumulated other comprehensive loss as a separate component of stockholders' equity in the Consolidated 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. 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. HP records the effective portion of such derivative instruments 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 Balance Sheets. Other Derivatives Other derivatives not designated as hedging instruments consist primarily of forward contracts used to hedge foreign currency-denominated balance sheet exposures. 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 of the derivative instrument, as well as the offsetting change in the fair value of the hedged item, in Interest and other, net in the Consolidated Statements of Earnings in the period of change. Hedge Effectiveness For interest rate swaps designated as fair value hedges, HP measures hedge effectiveness by offsetting the change in fair value of the hedged item with the change in fair value of the derivative. For foreign currency options and forward contracts designated as cash flow or net investment hedges, HP measures hedge effectiveness by comparing the cumulative change in fair value of the hedge contract with the cumulative change in fair value of the hedged item, both of which are based on forward rates. HP recognizes any ineffective portion of the hedge in the Consolidated Statements of Earnings in the same period in which ineffectiveness occurs. Amounts excluded from the assessment of effectiveness are recognized in the Consolidated Statements of Earnings in the period they arise. |
Loss Contingencies | Loss Contingencies HP is involved in various lawsuits, claims, investigations and proceedings that arise in the ordinary course of business. HP records a liability for contingencies when it believes it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. See Note 16 for a full description of HP's loss contingencies and related accounting policies. HP is involved in lawsuits, claims, investigations and proceedings, including those identified below, consisting of IP, commercial, securities, employment, employee benefits and environmental matters that arise in the ordinary course of business. HP accrues a liability when management believes that it is both probable that a liability has been incurred and the amount of loss can be reasonably estimated. HP believes it has recorded adequate provisions for any such matters and, as of October 31, 2015, 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 Policy | Segment 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 allocate resources to, each of the segments. Segment revenue includes revenues from sales to external customers and intersegment revenues that reflect transactions between the segments on an arm's-length basis. Intersegment revenues primarily consist of sales of hardware and software that are sourced internally and, in the majority of the cases, are financed as operating leases by HPFS. HP's consolidated net revenue is derived and reported after the elimination of intersegment revenues from such arrangements. HP periodically engages in intercompany advanced royalty payment and licensing arrangements that may result in advance payments between subsidiaries. Revenues from these intercompany arrangements are deferred and recognized as earned over the term of the arrangement by the HP legal entities involved in such transactions; however, these advanced payments are eliminated from revenues as reported by HP and its business segments. As disclosed in Note 6, during fiscal 2015, HP executed an intercompany advanced royalty payment arrangement resulting in advanced payments of $8.8 billion, while during fiscal 2014 HP executed a multi-year intercompany licensing arrangement and intercompany advanced royalty payment arrangement which resulted in combined advanced payments of $11.5 billion. In these transactions, the payments were received in the U.S. from a foreign consolidated affiliate, with a deferral of intercompany revenues over the term of the arrangements, approximately 5 years and 15 years, respectively. The impact of these intercompany arrangements is eliminated from both HP consolidated and segment revenues. Financing interest in the Consolidated 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, acquisition and other related charges, separation costs, defined benefit plan settlement charges and impairment of data center assets. |
Financing Arrangements | HP has third-party short-term financing arrangements intended to facilitate the working capital requirements of certain customers. These financing arrangements, which in certain cases provide for partial recourse, result in the transfer of HP's trade receivables to a third party. HP reflects amounts transferred to, but not yet collected from, the third party in accounts receivable in the Consolidated Balance Sheets. For arrangements involving an element of recourse, the fair value of the recourse obligation is measured using market data from similar transactions and reported as a current liability in the Consolidated Balance Sheets. |
Net Earnings per share | HP calculates basic net EPS using net earnings and the weighted-average number of shares outstanding during the reporting period. Diluted net EPS includes any dilutive effect of restricted stock awards, stock options, performance-based awards and shares purchased under the 2011 ESPP. HP excludes options and restricted stock units where the assumed proceeds exceed the average market price from the calculation of diluted net EPS, because their effect would be anti-dilutive. The assumed proceeds of an option include the sum of its exercise price, average unrecognized compensation cost and excess tax benefits. The assumed proceeds of a restricted stock unit include the sum of its average unrecognized compensation cost and excess tax benefits. |
Warranty | Warranties HP accrues the estimated cost of product warranties at the time it recognizes revenue. HP engages in extensive product quality programs and processes, including actively monitoring and evaluating the quality of its component suppliers; however, contractual warranty terms, repair costs, product call rates, average cost per call, current period product shipments and ongoing product failure rates, as well as specific product class failures outside of HP's baseline experience, affect the estimated warranty obligation. |
Offsetting of Derivatives | Offsetting of Derivative Instruments HP recognizes all derivative instruments on a gross basis in the Consolidated Balance Sheets. HP does not offset the fair value of its derivative instruments against the fair value of cash collateral posted under its collateral security agreements. |
Cash and Cash Equivalents Policy | All highly liquid investments with original maturities of three months or less at the date of acquisition are considered cash equivalents. |
Fair Value | Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date. Fair Value Hierarchy HP uses valuation techniques that are based upon observable and unobservable inputs. Observable inputs are developed using market data such as publicly available information and reflect the assumptions market participants would use, while unobservable inputs are developed using the best information available about the assumptions market participants would use. Assets and liabilities are classified in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement: Level 1—Quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2—Quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability and market-corroborated inputs. Level 3—Unobservable inputs for the asset or liability. The fair value hierarchy gives the highest priority to observable inputs and lowest priority to unobservable inputs. 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 NAV, or models utilizing market observable inputs. The fair value of debt investments was based on quoted market prices or model-driven valuations using inputs primarily derived from or corroborated by observable market data, and, in certain instances, valuation models that utilize assumptions which cannot be corroborated with observable market data. Derivative Instruments: HP uses forward contracts, interest rate and total return swaps, and option contracts to hedge certain foreign currency and interest rate exposures. HP uses industry standard valuation models to measure fair value. Where applicable, these models project future cash flows and discount the future amounts to present value using market-based observable inputs, including interest rate curves, HP and counterparty credit risk, foreign currency rates, and forward and spot prices for currencies and interest rates. See Note 12 for a further discussion of HP's use of derivative instruments. Other Fair Value Disclosures Short- and Long-Term Debt: HP estimates the fair value of its debt primarily using an expected present value technique, which is based on observable market inputs using interest rates currently available to companies of similar credit standing for similar terms and remaining maturities, and considering its own credit risk. The portion of HP's debt that is hedged is reflected in the Consolidated 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. Other Financial Instruments: For the balance of HP's financial instruments, primarily accounts receivable, accounts payable and financial liabilities included in other accrued liabilities, the carrying amounts approximate fair value due to their short maturities. If measured at fair value in the Consolidated Balance Sheets, these other financial instruments would be classified in Level 2 or Level 3 of the fair value hierarchy. Non-Marketable Equity Investments and Non-Financial Assets: Elements within HP's non-marketable equity investments and non-financial assets, such as goodwill, intangible assets and property, plant and equipment, are recorded at fair value in the period an impairment charge is recognized. If measured at fair value in the Consolidated Balance Sheets, these would generally be classified in Level 3 of the fair value hierarchy. |
Financing Receivables Allowance for Credit Loss and Reserves Policy | HP includes the current portion in Financing receivables and amounts due after one year, net in Long-term financing receivables and other assets in the accompanying Consolidated Balance Sheets. 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 geographic 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 credit enhancements, such as guarantees, letters of credit or security deposits. 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 financing receivables with identified exposures, such as customer defaults, bankruptcy or other events, that make it unlikely HP will recover its investment. 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 considered probable, HP records a specific reserve. HP generally writes off a receivable or records a specific reserve when a receivable becomes 180 days past due, or sooner if HP determines that the receivable 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, which is suspension of interest accrual, and considers such receivables to be non-performing at the earlier of the time at which full payment of principal and interest becomes doubtful or the receivable becomes 90 days past due. Subsequently, HP may recognize revenue on non-accrual financing receivables as payments are received, which is 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, all cash receipts are applied to the carrying amount of the financing receivable, which is the cost recovery method. In certain circumstances, such as when HP deems a delinquency to be of an administrative nature, financing receivables may accrue interest after becoming 90 days past due. The non-accrual status of a financing receivable may not impact a customer's risk rating. After all of a customer's delinquent principal and interest balances are settled, HP may return the related financing receivable to accrual status. |
Fair Value Of Pension Plan Assets Policy | Investments in publicly-traded equity securities are valued using the closing price on the measurement date as reported on the stock exchange on which the individual securities are traded. For corporate, government and asset-backed debt securities, fair value is based on observable inputs of comparable market transactions. For corporate and government debt securities traded on active exchanges, fair value is based on observable quoted prices. The valuation of alternative investments, such as limited partnerships and joint ventures, may require significant management judgment. For alternative investments, valuation is based on net asset value ("NAV") as reported by the Asset Manager and adjusted for cash flows, if necessary. In making such an assessment, a variety of factors are reviewed by management, including, but not limited to, the timeliness of NAV as reported by the asset manager and changes in general economic and market conditions subsequent to the last NAV reported by the asset manager. Depending on the amount of management judgment, the lack of near-term liquidity, and the absence of quoted market prices, these assets are classified in Level 2 or Level 3 of the fair value hierarchy. Further, depending on how quickly HP can redeem its hedge fund investments, and the extent of any adjustments to NAV, hedge funds are classified in either Level 2 or Level 3 of the fair value hierarchy. Common collective trusts, interests in 103-12 entities and registered investment companies are valued at NAV. The valuation for some of these assets requires judgment due to the absence of quoted market prices, and these assets are generally classified in Level 2 of the fair value hierarchy. Cash and cash equivalents includes money market funds, which are valued based on NAV. Other assets, including insurance group annuity contracts, were classified in the fair value hierarchy based on the lowest level input (e.g., quoted prices and observable inputs) that is significant to the fair value measure in its entirety. |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Oct. 31, 2015 | |
Segment Information | |
Schedule of Revenue and Earnings (Loss) from Operations, by Segment | Printing and Personal Systems Personal Systems Printing Enterprise Group Enterprise Services Software HP Financial Services Corporate Investments Total In millions 2015 Net revenue $ $ $ $ $ $ $ $ Intersegment net revenue and other — Total segment net revenue $ $ $ $ $ $ $ $ Earnings (loss) from operations $ $ $ $ $ $ $ ) $ 2014 Net revenue $ $ $ $ $ $ $ $ Intersegment net revenue and other — Total segment net revenue $ $ $ $ $ $ $ $ Earnings (loss) from operations $ $ $ $ $ $ $ ) $ 2013 Net revenue $ $ $ $ $ $ $ $ Intersegment net revenue and other — Total segment net revenue $ $ $ $ $ $ $ $ Earnings (loss) from operations $ $ $ $ $ $ $ ) $ |
Schedule of Reconciliation of Revenues and Earnings before Taxes from Segments to Consolidated | For the fiscal years ended October 31 2015 2014 2013 In millions Net Revenue: Total segments $ $ $ Elimination of intersegment net revenue and other ) ) ) Total HP consolidated net revenue $ $ $ Earnings before taxes: Total segment earnings from operations $ $ $ Corporate and unallocated costs and eliminations ) ) ) Stock-based compensation expense ) ) ) Amortization of intangible assets ) ) ) Restructuring charges ) ) ) Acquisition and other related charges ) ) ) Separation costs ) — — Defined benefit plan settlement charges ) — — Impairment of data center assets ) — — Interest and other, net ) ) ) Total HP consolidated earnings before taxes $ $ $ |
Schedule of Reconciliation of Assets from Segments to Consolidated | As of October 31 2015 2014 In millions Personal Systems $ $ Printing Printing and Personal Systems Group Enterprise Group (1) Enterprise Services Software HP Financial Services Corporate Investments Corporate and unallocated assets Total HP consolidated assets $ $ (1) In connection with the acquisition of Aruba Networks, Inc. ("Aruba") in fiscal 2015, HP recorded approximately $1.8 billion of goodwill, $643 million of intangible assets and $153 million of IPR&D. HP reports the financial results of Aruba's business in the Networking business unit within the EG segment. |
Schedule of net revenue by geographical areas | For the fiscal years ended October 31 2015 2014 2013 In millions U.S. $ $ $ Other countries Total net revenue $ $ $ |
Schedule of net property, plant and equipment by geographical areas | As of October 31 2015 2014 In millions U.S. $ $ United Kingdom. Other countries Total net property, plant and equipment $ $ |
Schedule of Revenue by Segment and Business Unit | For the fiscal years ended October 31 2015 2014 2013 In millions Notebooks $ $ $ Desktops Workstations Other Personal Systems Supplies Commercial Hardware Consumer Hardware Printing Total Printing and Personal Systems Group Industry Standard Servers Technology Services Storage Networking Business Critical Systems Enterprise Group Infrastructure Technology Outsourcing Application and Business Services Enterprise Services Software HP Financial Services Corporate Investments Total segment net revenue Eliminations of intersegment net revenue and other ) ) ) Total net revenue $ $ $ |
Restructuring (Tables)
Restructuring (Tables) | 12 Months Ended |
Oct. 31, 2015 | |
Restructuring | |
Summary of Restructuring Plans | Fiscal 2015 As of October 31, 2015 Balance, October 31, 2014 Charges Cash Payments Other Adjustments and Non-Cash Settlements Balance, October 31, 2015 Total Costs Incurred to Date Total Expected Costs to Be Incurred In millions Fiscal 2015 Plan Severance $ — $ $ — $ — $ $ $ Infrastructure and other — ) — — Total 2015 Plan — ) — Fiscal 2012 Plan Severance and EER ) ) Infrastructure and other ) ) Total 2012 Plan ) ) Other Plans: Severance ) ) ) Infrastructure ) ) — Total Other Plans ) ) ) Total restructuring plans $ $ $ ) $ ) $ $ $ Reflected in Consolidated Balance Sheets: Accrued restructuring $ $ Other liabilities $ $ |
Retirement and Post-Retiremen29
Retirement and Post-Retirement Benefit Plans (Tables) | 12 Months Ended |
Oct. 31, 2015 | |
Retirement and Post-Retirement Benefit Plans | |
Schedule of fair value of plan assets and projected benefit obligations for US defined benefit plans and DPSP | For the fiscal years ended October 31 2015 2014 Plan Assets Projected Benefit Obligation Plan Assets Projected Benefit Obligation In millions U.S. defined benefit plans $ $ $ $ DPSP Total $ $ $ $ |
Schedule of net pension and post-retirement benefit (credit) costs | For the fiscal years ended October 31 2015 2014 2013 2015 2014 2013 2015 2014 2013 U.S. Defined Benefit Plans Non-U.S. Defined Benefit Plans Post-Retirement Benefit Plans In millions Service cost $ $ $ $ $ $ $ $ $ Interest cost Expected return on plan assets ) ) ) ) ) ) ) ) ) Amortization and deferrals: Actuarial loss (gain) ) ) Prior service benefit — — — ) ) ) ) ) ) Net periodic benefit (credit) cost ) ) ) ) ) ) Curtailment gain — — — — ) ) — — ) Settlement loss — — — Special termination benefits — — — ) Net benefit (credit) cost $ ) $ ) $ ) $ $ $ $ ) $ ) $ ) |
Schedule of weighted average assumptions used to calculate net benefit (credit) cost | For the fiscal years ended October 31 2015 2014 2013 2015 2014 2013 2015 2014 2013 U.S. Defined Benefit Plans Non-U.S. Defined Benefit Plans Post-Retirement Benefit Plans Discount rate % % % % % % % % % Expected increase in compensation levels % % % % % % — — — Expected long-term return on plan assets % % % % % % % % % |
Schedule of funded status of the defined benefit and post-retirement benefit plans | As of October 31 2015 2014 2015 2014 2015 2014 U.S. Defined Benefit Plans Non-U.S. Defined Benefit Plans Post-Retirement Benefit Plans In millions Change in fair value of plan assets: Fair value—beginning of year $ $ $ $ $ $ Acquisition/addition of plans ) — — — Actual return on plan assets Employer contributions Participant contributions — — Benefits paid ) ) ) ) ) ) Settlement ) ) ) ) — — Currency impact — — ) ) — — Fair value—end of year Change in benefit obligation: Projected benefit obligation—beginning of year Acquisition/addition of plans ) — — — Service cost Interest cost Participant contributions — — Actuarial (gain) loss ) ) Benefits paid ) ) ) ) ) ) Plan amendments — — ) — — — Curtailment — — — ) — — Settlement ) ) ) ) — — Special termination benefits — — Currency impact — — ) ) ) ) Projected benefit obligation—end of year Funded status at end of year $ ) $ ) $ ) $ ) $ ) $ ) Accumulated benefit obligation $ $ $ $ |
Schedule of weighted-average assumptions used to calculate the projected benefit obligations | For the fiscal years ended October 31 2015 2014 2015 2014 2015 2014 U.S. Defined Benefit Plans Non-U.S. Defined Benefit Plans Post-Retirement Benefit Plans Discount rate % % % % % % Expected increase in compensation levels % % % % — — |
Schedule of net amount recognized for the entity's defined benefit and post-retirement benefit plans in the entity's Consolidated Balance Sheets | As of October 31 2015 2014 2015 2014 2015 2014 U.S. Defined Benefit Plans Non-U.S. Defined Benefit Plans Post-Retirement Benefit Plans In millions Noncurrent assets $ — $ — $ $ $ — $ — Current liabilities ) ) ) ) ) ) Noncurrent liabilities ) ) ) ) ) ) Funded status at end of year $ ) $ ) $ ) $ ) $ ) $ ) |
Summary of pretax net actuarial loss (gain) and prior service benefit recognized in accumulated other comprehensive loss for defined benefit and post-retirement benefit plans | As of October 31, 2015 U.S. Defined Benefit Plans Non-U.S. Defined Benefit Plans Post-Retirement Benefit Plans In millions Net actuarial loss (gain) $ $ $ ) Prior service benefit — ) ) Total recognized in Accumulated other comprehensive loss $ $ $ ) |
Summary of actuarial loss (gain) and prior service benefit that are expected to be amortized from accumulated other comprehensive loss (income) and recognized as components of net periodic benefit (credit) cost | U.S. Defined Benefit Plans Non-U.S. Defined Benefit Plans Post-Retirement Benefit Plans In millions Net actuarial loss (gain) $ $ $ ) Prior service benefit — ) ) Total expected to be recognized in net periodic benefit (credit) cost $ $ $ ) |
Schedule of defined benefit plans with projected benefit obligations exceeding the fair value of plan assets | As of October 31 2015 2014 2015 2014 U.S. Defined Benefit Plans Non-U.S. Defined Benefit Plans In millions Aggregate fair value of plan assets $ $ $ $ Aggregate projected benefit obligation $ $ $ $ |
Schedule of defined benefit plans with accumulated benefit obligations exceeding the fair value of plan assets | As of October 31 2015 2014 2015 2014 U.S. Defined Benefit Plans Non-U.S. Defined Benefit Plans In millions Aggregate fair value of plan assets $ $ $ $ Aggregate accumulated benefit obligation $ $ $ $ |
Schedule of fair value of plan assets by asset category within the fair value hierarchy | As of October 31, 2015 U.S. Defined Benefit Plans Non-U.S. Defined Benefit Plans Post-Retirement Benefit Plans Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total In millions Asset Category: Equity securities U.S. $ $ $ — $ $ $ $ — $ $ — $ $ — $ Non-U.S. — — — — — Debt securities Corporate — — — — — Government (1) — — — — — — Alternative Investments Private Equity (2) — — — — — Hybrids (3) — — — — — — — — — Hedge Funds (4) — — — — — Real Estate Funds — — — — — — — — Insurance Group Annuity Contracts — — — — — — — — — Common Collective Trusts and 103-12 Investment Entities (5) — — — — — — Registered Investment Companies (6) — — — — Cash and Cash Equivalents (7) — — — — Other (8) ) — ) ) — — ) Total $ $ $ $ $ $ $ $ $ $ $ $ (1) Includes debt issued by national, state and local governments and agencies. (2) Includes limited partnerships such as equity, buyout, venture capital, real estate and other similar funds that invest in the U.S. and internationally where foreign currencies are hedged. (3) Includes a fund that invests in both private and public equities primarily in the U.S. and the United Kingdom, as well as emerging markets across all sectors. The fund also holds fixed income and derivative instruments to hedge interest rate and inflation risk. In addition, the fund includes units in transferable securities, collective investment schemes, money market funds, cash and deposits. (4) Includes limited partnerships that invest both long and short primarily in common stocks and credit, relative value, event driven equity, distressed debt and macro strategies. Management of the hedge funds has the ability to shift investments from value to growth strategies, from small to large capitalization stocks and bonds, and from a net long position to a net short position. (5) Department of Labor 103-12 IE (Investment Entity) designation is for plan assets held by two or more unrelated employee benefit plans which includes limited partnerships and venture capital partnerships. (6) Includes publicly and privately traded Registered Investment Entities. (7) Includes cash and cash equivalents such as short-term marketable securities. (8) Includes primarily unsettled transactions, international insured contracts and derivative instruments. Such unsettled transactions relate primarily to fixed income securities to be settled in the first quarter of fiscal 2016. As of October 31, 2014 U.S. Defined Benefit Plans Non-U.S. Defined Benefit Plans Post-Retirement Benefit Plans Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total In millions Asset Category: Equity securities U.S. $ $ — $ — $ $ $ $ — $ $ — $ — $ — $ — Non-U.S. — — — — — — Debt securities Corporate — — — — — Government (1) — — — — — — Alternative Investments Private Equity (2) — — — — — Hybrids (3) — — — — Hedge Funds (4) — — — — — — Real Estate Funds — — — — — — — — Insurance Group Annuity Contracts — — — — — — — — — Common Collective Trusts and 103-12 Investment Entities (5) — — — — — — — — Registered Investment Companies (6) — — — — — — Cash and Cash Equivalents (7) — — — — — Other (8) ) — ) — — ) Total $ $ $ $ $ $ $ $ $ $ $ $ (1) Includes debt issued by national, state and local governments and agencies. (2) Includes limited partnerships such as equity, buyout, venture capital, real estate and other similar funds that invest in the U.S. and internationally where foreign currencies are hedged. (3) Includes a fund that invests in both private and public equities primarily in the U.S. and the United Kingdom, as well as emerging markets across all sectors. The fund also holds fixed income and derivative instruments to hedge interest rate and inflation risk. In addition, the fund includes units in transferable securities, collective investment schemes, money market funds, cash and deposits. (4) Includes limited partnerships that invest both long and short primarily in common stocks and credit, relative value, event driven equity, distressed debt and macro strategies. Management of the hedge funds has the ability to shift investments from value to growth strategies, from small to large capitalization stocks and bonds, and from a net long position to a net short position. (5) Department of Labor 103-12 IE (Investment Entity) designation is for plan assets held by two or more unrelated employee benefit plans which includes limited partnerships and venture capital partnerships. (6) Includes publicly and privately traded Registered Investment Entities. (7) Includes cash and cash equivalents such as short-term marketable securities. (8) Includes international insured contracts, derivative instruments and unsettled transactions. |
Schedule of changes in fair value measurements of Level 3 investments | For the fiscal year ended October 31, 2015 U.S. Defined Benefit Plans Non-U.S. Defined Benefit Plans Post-Retirement Benefit Plans Debt Securities Alternative Investments Equity Alternative Investments Alternative Investments Corporate Debt Private Equity Hybrids Hedge Funds Total Non U.S. Equities Private Equity Hybrids Hedge Funds Real Estate Insurance Group Annuities Other Total Private Equity Hybrids Total In millions Beginning balance at October 31, 2014 $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ Actual return on plan assets: Relating to assets still held at the reporting date — ) — ) ) ) ) — — ) ) ) — ) Relating to assets sold during the period — ) — — ) — — — — ) — Purchases, sales, and settlements (net) ) ) — ) — — ) — ) ) ) Transfers in and/or out of Level 3 — — — — — — ) ) — — — Ending balance at October 31, 2015 $ $ $ — $ $ $ $ $ $ $ $ $ $ $ $ — $ For the fiscal year ended October 31, 2014 U.S. Defined Benefit Plans Non-U.S. Defined Benefit Plans Post-Retirement Benefit Plans Debt Securities Alternative Investments Equity Alternative Investments Alternative Investments Corporate Debt Private Equity Hybrids Hedge Funds Total Non U.S. Equities Private Equity Hybrids Hedge Funds Real Estate Insurance Group Annuities Other Total Private Equity Hybrids Total In millions Beginning balance at October 31, 2013 $ — $ $ $ $ $ $ $ — $ $ $ $ $ $ $ $ Actual return on plan assets: Relating to assets still held at the reporting date — — ) — — Relating to assets sold during the period — — — — — ) — — — — Purchases, sales, and settlements (net) ) — ) — ) ) — ) — ) Transfers in and/or out of Level 3 — — — — — — — — — — — — — Ending balance at October 31, 2014 $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ |
Schedule of weighted-average target and actual asset allocations across the benefit plans | U.S. Defined Benefit Plans Non-U.S. Defined Benefit Plans Post-Retirement Benefit Plans Plan Assets Plan Assets Plan Assets 2015 Target Allocation 2015 Target Allocation 2015 Target Allocation Asset Category 2015 2014 2015 2014 2015 2014 Public equity securities % % % % % % Private/other equity securities % % % % % % Real estate and other )% % % % )% — Equity-related investments % % % % % % % % % Debt securities % % % % % % % % % Cash % % % % % % % % % Total % % % % % % % % % |
Schedule of estimated future benefits payable for the retirement and post-retirement plans | Fiscal year U.S. Defined Benefit Plans Non-U.S. Defined Benefit Plans Post-Retirement Benefit Plans In millions 2016 $ $ $ 2017 2018 2019 2020 Next five fiscal years to October 31, 2025 |
Stock-Based Compensation (Table
Stock-Based Compensation (Table) | 12 Months Ended |
Oct. 31, 2015 | |
Share-based compensation | |
Schedule of stock based compensation expense and the resulting tax benefits | For the fiscal years ended October 31 2015 2014 2013 In millions Stock-based compensation expense $ $ $ Income tax benefit ) ) ) Stock-based compensation expense, net of tax $ $ $ |
Schedule of restricted stock award activity | As of October 31 2015 2014 2013 Shares Weighted- Average Grant Date Fair Value Per Share Shares Weighted- Average Grant Date Fair Value Per Share Shares Weighted- Average Grant Date Fair Value Per Share In thousands In thousands In thousands Outstanding at beginning of year $ $ $ Granted and assumed through acquisition $ $ $ Vested ) $ ) $ ) $ Forfeited ) $ ) $ ) $ Outstanding at end of year $ $ $ |
Schedule of shares available for future grant and shares reserved for future issuance under the ESPP and incentive compensation plans | As of October 31 2015 2014 2013 In thousands Shares available for future grant Shares reserved for future issuance |
Stock Options | |
Share-based compensation | |
Schedule of weighted-average fair value and the assumptions used to measure fair value | For the fiscal years ended October 31 2015 2014 2013 Weighted-average fair value (1) $ $ $ Expected volatility (2) % % % Risk-free interest rate (3) % % % Expected dividend yield (4) % % % Expected term in years (5) (1) The weighted-average fair value was based on stock options granted during the period. (2) For all awards granted in fiscal 2015 and fiscal 2013, expected volatility was estimated using the implied volatility derived from options traded on HP's common stock. For awards granted in fiscal 2014, expected volatility for awards subject to service-based vesting was estimated using the implied volatility derived from options traded on HP's common stock, whereas for performance- contingent awards, expected volatility was estimated using the historical volatility of HP's common stock. (3) The risk-free interest rate was estimated based on the yield on U.S. Treasury zero-coupon issues. (4) The expected dividend yield represents a constant dividend yield applied for the duration of the expected term of the award. (5) For awards subject to service-based vesting, the expected term was estimated using historical exercise and post-vesting termination patterns; and for performance-contingent awards, the expected term represents an output from the lattice model. |
Schedule of stock options activity | As of October 31 2015 2014 2013 Shares Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term Aggregate Intrinsic Value Shares Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term Aggregate Intrinsic Value Shares Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term Aggregate Intrinsic Value In thousands In years In millions In thousands In years In millions In thousands In years In millions Outstanding at beginning of year $ $ $ Granted and assumed through acquisitions $ $ $ Exercised ) $ ) $ ) $ Forfeited/cancelled/expired ) $ ) $ ) $ Outstanding at end of year $ $ $ $ $ $ Vested and expected to vest at end of year $ $ $ $ $ $ Exercisable at end of year $ $ $ $ $ $ |
Schedule of significant ranges of outstanding and exercisable stock options | As of October 31, 2015 Options Outstanding Options Exercisable Range of Exercise Prices Shares Outstanding Weighted- Average Remaining Contractual Term Weighted- Average Exercise Price Shares Exercisable Weighted- Average Exercise Price In thousands In years In thousands $0-$9.99 $ $ $10-$19.99 $ $ $20-$29.99 $ $ $30-$39.99 $ $ $40-$49.99 $ $ $50-$59.99 $ $ $ $ |
Taxes on Earnings (Tables)
Taxes on Earnings (Tables) | 12 Months Ended |
Oct. 31, 2015 | |
Taxes on Earnings | |
Schedule of domestic and foreign components of earnings (loss) before taxes | For the fiscal years ended October 31 2015 2014 2013 In millions U.S. $ $ $ Non-U.S. $ $ $ |
Schedule of provision for (benefit from) taxes on earnings | For the fiscal years ended October 31 2015 2014 2013 In millions U.S. federal taxes: Current $ ) $ $ Deferred ) ) Non-U.S. taxes: Current Deferred ) State taxes: Current Deferred ) ) $ $ $ |
Schedule of differences between the U.S. federal statutory income tax rate and effective tax rate | For the fiscal years ended October 31 2015 2014 2013 U.S. federal statutory income tax rate % % % State income taxes, net of federal tax benefit )% % % Lower rates in other jurisdictions, net )% )% )% Valuation allowances )% % % Uncertain tax positions % )% % Other, net % % % % % % |
Schedule of reconciliation of gross unrecognized tax benefits | As of October 31 2015 2014 2013 In millions Balance at beginning of year $ $ $ Increases: For current year's tax positions For prior years' tax positions Decreases: For prior years' tax positions ) ) ) Statute of limitations expirations ) ) ) Settlements with taxing authorities ) ) ) Balance at end of year $ $ $ |
Schedule of significant components of deferred tax assets and deferred tax liabilities | As of October 31 2015 2014 Deferred Tax Assets Deferred Tax Liabilities Deferred Tax Assets Deferred Tax Liabilities In millions Loss carryforwards $ $ — $ $ — Credit carryforwards — — Unremitted earnings of foreign subsidiaries — — Inventory valuation Intercompany transactions—profit in inventory — — Intercompany transactions—excluding inventory — — Fixed assets Warranty — — Employee and retiree benefits Accounts receivable allowance Intangible assets Restructuring — — Deferred revenue Other Gross deferred tax assets and liabilities Valuation allowances ) — ) — Net deferred tax assets and liabilities $ $ $ $ |
Schedule of current and long-term deferred tax assets and liabilities | As of October 31 2015 2014 In millions Current deferred tax assets $ $ Current deferred tax liabilities ) ) Long-term deferred tax assets Long-term deferred tax liabilities ) ) Net deferred tax assets net of deferred tax liabilities $ $ |
Schedule of tax credit carryforwards | Carryforward Valuation Allowance Initial Year of Expiration In millions U.S. foreign tax credits $ $ — U.S. R&D and other credits — Tax credits in state and foreign jurisdictions ) Balance at end of year $ $ ) |
Schedule of valuation allowance balance | As of October 31 2015 2014 2013 In millions Balance at beginning of year $ $ $ Income tax (benefit) expense ) Other comprehensive income, currency translation and charges to other accounts ) ) Balance at end of year $ $ $ |
Balance Sheet Details (Table)
Balance Sheet Details (Table) | 12 Months Ended |
Oct. 31, 2015 | |
Balance Sheet Details | |
Accounts Receivable, Net | As of October 31 2015 2014 In millions Accounts receivable $ $ Allowance for doubtful accounts ) ) $ $ |
Schedule of allowance for doubtful accounts related to accounts receivable | As of October 31 2015 2014 2013 In millions Balance at beginning of year $ $ $ Provision for doubtful accounts Deductions, net of recoveries ) ) ) Balance at end of year $ $ $ |
Schedule of maximum program capacity and available program capacity under revolving short-term financing arrangements | As of October 31 2015 2014 In millions Non-recourse arrangements: Maximum program capacity $ $ Utilized capacity (1)(2) ) ) Available capacity $ $ Partial-recourse arrangements: Maximum program capacity $ $ Utilized capacity (1)(2) ) ) Available capacity $ $ Total arrangements: Maximum program capacity $ $ Utilized capacity (1)(2) ) ) Available capacity $ $ (1) Utilized capacity represents the receivables sold to third parties, but not collected from the customer by the third parties. (2) HP reflects the amounts transferred to, but not yet collected from, third parties in Accounts receivable in the Consolidated Balance Sheets. These amounts, included in the utilized capacity are as follows: As of October 31 2015 2014 In millions Non-recourse arrangements $ $ Partial-recourse arrangements Total arrangements $ $ |
Schedule of revolving short-term financing arrangements | As of October 31 2015 2014 In millions Non-recourse arrangements $ $ Partial-recourse arrangements Total arrangements $ $ |
Schedule of transferred trade receivables not collected from the third parties | As of October 31 2015 2014 2013 In millions Balance at beginning of year (1) $ $ $ Trade receivables sold (2) Cash receipts (2) ) ) ) Foreign currency and other ) ) Balance at end of year (1) $ $ $ (1) Beginning and ending balance represents amounts for trade receivables sold but not yet collected. (2) In fiscal 2014, HP revised the presentation for the trade receivables sold and the cash received under the short-term financing arrangements for the fiscal year ended October 31, 2013 in order to present comparable information with that period. |
Inventory | As of October 31 2015 2014 In millions Finished goods $ $ Purchased parts and fabricated assemblies $ $ |
Other Current Assets | As of October 31 2015 2014 In millions Deferred tax assets—short-term $ $ Value-added taxes receivable Supplier and other receivables Prepaid and other current assets $ $ |
Property, Plant and Equipment | As of October 31 2015 2014 In millions Land $ $ Buildings and leasehold improvements Machinery and equipment, including equipment held for lease Accumulated depreciation ) ) $ $ |
Long-Term Financing Receivables and Other Assets | As of October 31 2015 2014 In millions Financing receivables, net $ $ Deferred tax assets Deferred costs Other $ $ |
Other Accrued Liabilities | As of October 31 2015 2014 In millions Accrued taxes—other $ $ Warranty Sales and marketing programs Other $ $ |
Other Liabilities | As of October 31 2015 2014 In millions Pension, post-retirement, and post-employment liabilities $ $ Deferred revenue—long-term Deferred tax liability—long-term Tax liability—long-term Other long-term liabilities $ $ |
Financing Receivables and Ope33
Financing Receivables and Operating Leases (Tables) | 12 Months Ended |
Oct. 31, 2015 | |
Financing Receivables and Operating Leases | |
Components of financing receivables | As of October 31 2015 2014 In millions Minimum lease payments receivable $ $ Unguaranteed residual value Unearned income ) ) Financing receivables, gross Allowance for doubtful accounts ) ) Financing receivables, net Less: current portion (1) ) ) Amounts due after one year, net (1) $ $ (1) HP includes the current portion in Financing receivables and amounts due after one year, net in Long-term financing receivables and other assets in the accompanying Consolidated Balance Sheets. |
Scheduled maturities of minimum lease payments receivable | Fiscal year In millions 2016 $ 2017 2018 2019 2020 Thereafter Total $ |
Credit risk profile of gross financing receivables | As of October 31 2015 2014 In millions Risk Rating: Low $ $ Moderate High Total $ $ |
Schedule of allowance for doubtful accounts for financing receivables | As of October 31 2015 2014 2013 In millions Balance at beginning of year $ $ $ Provision for doubtful accounts Deductions, net of recoveries ) ) ) Balance at end of year $ $ $ |
Gross financing receivables and related allowance collectively and individually evaluated for loss | As of October 31 2015 2014 In millions Gross financing receivables collectively evaluated for loss $ $ Gross financing receivables individually evaluated for loss Total $ $ Allowance for financing receivables collectively evaluated for loss $ $ Allowance for financing receivables individually evaluated for loss Total $ $ |
Summary of the aging and non-accrual status of gross financing receivables | As of October 31 2015 2014 In millions Billed (1) : Current 1-30 days $ $ Past due 31-60 days Past due 61-90 days Past due >90 days Unbilled sales-type and direct-financing lease receivables Total gross financing receivables $ $ Gross financing receivables on non-accrual status (2) $ $ Gross financing receivables 90 days past due and still accruing interest (2) $ $ (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 | As of October 31 2015 2014 In millions Equipment leased to customers $ $ Accumulated depreciation ) ) $ $ |
Minimum future rentals on non-cancelable operating leases | As of October 31, 2015, minimum future rentals on non-cancelable operating leases related to leased equipment were as follows: Fiscal year In millions 2016 $ 2017 2018 2019 2020 Thereafter Total $ |
Acquisitions and Divestitures (
Acquisitions and Divestitures (Tables) | 12 Months Ended |
Oct. 31, 2015 | |
Acquisitions and Divestitures | |
Aggregate purchase price allocation, including preliminary allocations | In millions Goodwill $ Amortizable intangible assets In-process research and development Net assets assumed Total fair value of consideration $ |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Oct. 31, 2015 | |
Goodwill and Intangible Assets | |
Schedule of allocation and changes in the carrying amount of goodwill | Personal Systems Printing Enterprise Group Enterprise Services (3) Software HP Financial Services Corporate Investments Total In millions Balance at October 31, 2013 (1)(2) $ $ $ $ $ $ $ — $ Goodwill acquired during the period — — — — — — Goodwill adjustments — — — — — — Balance at October 31, 2014 (1)(2) $ $ $ $ $ $ $ — $ Goodwill acquired during the period — — — — — Goodwill adjustments — ) ) ) ) — — ) Balance at October 31, 2015 (1) $ $ $ $ $ $ $ — $ (1) Goodwill is net of accumulated impairment losses of $14.5 billion. Of that amount, $8.0 billion relates to the ES segment, $5.7 billion relates to Software, and the remaining $0.8 billion relates to Corporate Investments. (2) In connection with the Separation, effective at the beginning of its fourth quarter of fiscal 2015, HP implemented an organizational change which resulted in the transfer of the marketing optimization solutions business from the Software segment to the Commercial Hardware business unit within the Printing segment. As a result, HP reclassified $512 million of goodwill related to the marketing optimization solutions business from the Software segment to the Printing segment. The reclassification has been reflected retrospectively for all periods presented above. (3) Goodwill relates to the MphasiS Limited reporting unit. |
Intangible Assets | As of October 31, 2015 As of October 31, 2014 Gross Accumulated Amortization Accumulated Impairment Loss Net Gross Accumulated Amortization Accumulated Impairment Loss Net In millions Customer contracts, customer lists and distribution agreements $ $ ) $ ) $ $ $ ) $ ) $ Developed and core technology and patents ) ) ) ) Trade name and trade marks ) ) ) ) In-process research and development — — — — — — Total intangible assets $ $ ) $ ) $ $ $ ) $ ) $ |
Schedule of intangible assets | Finite-Lived Intangible Assets Weighted-Average Useful Lives In years Customer contracts, customer lists and distribution agreements Developed and core technology and patents Trade name and trade marks |
Schedule of estimated future amortization expense related to finite-lived purchased intangible assets | As of October 31, 2015, estimated future amortization expense related to finite-lived intangible assets was as follows: Fiscal year In millions 2016 $ 2017 2018 2019 2020 Thereafter Total $ |
Fair Value (Tables)
Fair Value (Tables) | 12 Months Ended |
Oct. 31, 2015 | |
Fair Value. | |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | As of October 31, 2015 As of October 31, 2014 Fair Value Measured Using Fair Value Measured Using Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total In millions Assets Cash Equivalents and Investments: Time deposits $ — $ $ — $ $ — $ $ — $ Money market funds — — — — Mutual funds — — — — Marketable equity securities — — Foreign bonds — — Other debt securities — — Derivative Instruments: Interest rate contracts — — — — Foreign exchange contracts — — Other derivatives — — — — Total assets $ $ $ $ $ $ $ $ Liabilities Derivative Instruments: Interest rate contracts $ — $ $ — $ $ — $ $ — $ Foreign exchange contracts — — Total liabilities $ — $ $ $ $ — $ $ $ |
Financial Instruments (Tables)
Financial Instruments (Tables) | 12 Months Ended |
Oct. 31, 2015 | |
Financial Instruments | |
Schedule of cash equivalents and available-for-sale investments | As of October 31, 2015 As of October 31, 2014 Cost Gross Unrealized Gain Gross Unrealized Loss Fair Value Cost Gross Unrealized Gain Gross Unrealized Loss Fair Value In millions Cash Equivalents: Time deposits $ $ — $ — $ $ $ — $ — $ Money market funds — — — — Mutual funds — — — — Total cash equivalents — — — — Available-for-Sale Investments: Debt securities: Time deposits — — — — Foreign bonds — — Other debt securities — ) — ) Total debt securities ) ) Equity securities: Mutual funds — — — — Equity securities in public companies ) — Total equity securities ) — Total available-for-sale investments ) ) Total cash equivalents and available-for-sale investments $ $ $ ) $ $ $ $ ) $ |
Schedule of contractual maturities of investments in available-for-sale debt securities | As of October 31, 2015 Amortized Cost Fair Value In millions Due in one year $ $ Due in one to five years Due in more than five years $ $ |
Schedule of gross notional and fair value of derivative financial instruments in the Consolidated Balance Sheets | As of October 31, 2015 As of October 31, 2014 Outstanding Gross Notional Other Current Assets Long-Term Financing Receivables and Other Assets Other Accrued Liabilities Long-Term Other Liabilities Outstanding Gross Notional Other Current Assets Long-Term Financing Receivables and Other Assets Other Accrued Liabilities Long-Term Other Liabilities In millions Derivatives designated as hedging instruments Fair value hedges: Interest rate contracts $ $ $ $ — $ $ $ $ $ — $ Cash flow hedges: Foreign currency contracts Net investment hedges: Foreign currency contracts Total derivatives designated as hedging instruments Derivatives not designated as hedging instruments Foreign currency contracts Other derivatives — — — — — Total derivatives not designated as hedging instruments Total derivatives $ $ $ $ $ $ $ $ $ $ |
Schedule of information related to the potential effect of entity's master netting agreements and collateral security agreements | As of October 31, 2015 In the Consolidated Balance Sheets (vi) = (iii)–(iv)–(v) (i) (ii) (iii) = (i)–(ii) (iv) (v) Gross Amounts Not Offset Gross Amount Recognized Gross Amount Offset Net Amount Presented Derivatives Financial Collateral Net Amount In millions Derivative assets $ $ — $ $ $ (1) $ Derivative liabilities $ $ — $ $ $ (2) $ As of October 31, 2014 In the Consolidated Balance Sheets (vi) = (iii)–(iv)–(v) (i) (ii) (iii) = (i)–(ii) (iv) (v) Gross Amounts Not Offset Gross Amount Recognized Gross Amount Offset Net Amount Presented Derivatives Financial Collateral Net Amount In millions Derivative assets $ $ — $ $ $ (1) $ Derivative liabilities $ $ — $ $ $ (2) $ (1) Represents the cash collateral posted by counterparties as of the respective reporting date for HP's asset position, net of derivative amounts that could be offset, as of, generally, two business days prior to the respective reporting date. (2) Represents the collateral posted by HP through re-use of counterparty cash collateral as of the respective reporting date for HP's liability position, net of derivative amounts that could be offset, as of, generally, two business days prior to the respective reporting date. |
Schedule of pre-tax effect of derivative instruments and related hedged items in a fair value hedging relationship | (Loss) Gain Recognized in Income on Derivative Instruments and Related Hedged Items Derivative Instrument Location 2015 2014 2013 Hedged Item Location 2015 2014 2013 In millions In millions Interest rate contracts Interest and other, net $ ) $ $ ) Fixed-rate debt Interest and other, net $ $ ) $ |
Schedule of pre-tax effect of derivative instruments in cash flow and net investment hedging relationships | Gain (Loss) Recognized in OCI on Derivatives (Effective Portion) Gain (Loss) Reclassified from Accumulated OCI Into Earnings (Effective Portion) 2015 2014 2013 Location 2015 2014 2013 In millions In millions Cash flow hedges: Foreign currency contracts $ $ $ ) Net revenue $ $ ) $ Foreign currency contracts ) ) ) Cost of products ) ) ) Foreign currency contracts ) ) Other operating expenses ) ) Foreign currency contracts ) Interest and other, net ) Total currency hedges $ $ $ ) $ $ ) $ ) Net investment hedges: Foreign currency contracts $ $ $ 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 Income on Derivatives Location 2015 2014 2013 In millions Foreign currency contracts Interest and other, net $ $ $ Other derivatives Interest and other, net — — Interest rate contracts Interest and other, net — — Total $ $ $ |
Borrowings (Tables)
Borrowings (Tables) | 12 Months Ended |
Oct. 31, 2015 | |
Borrowings | |
Schedule of notes payable and short-term borrowings, including the current portion of long-term debt | 2015 2014 As of October 31 Amount Outstanding (1) Weighted-Average Interest Rate Amount Outstanding Weighted-Average Interest Rate In millions In millions Current portion of long-term debt $ % $ % Commercial paper (2) % % Notes payable to banks, lines of credit and other (2) % % $ $ (1) Out of current portion of long-term debt, $2.1 billion U.S. Dollar Global Notes was redeemed and repaid on November 4, 2015. (2) Commercial paper balance of $39 million and $298 million and Notes payable to banks, lines of credit and other includes $374 million and $404 million at October 31, 2015 and 2014, respectively, of borrowing- and funding-related activity associated with HPFS and its subsidiaries. |
Schedule of long-term debt | As of October 31, 2015 October 31, 2014 In millions U.S. Dollar Global Notes (1) 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, paid November 2015 $ $ $750 issued at discount to par at a price of 99.932% in March 2008 at 5.5%, due March 2018, paid November 2015 2009 Shelf Registration Statement: $1,100 issued at discount to par at a price of 99.887% in September 2010 at 2.125%, paid September 2015 — $650 issued at discount to par at a price of 99.911% in December 2010 at 2.2%, due December 2015, paid November 2015 $1,350 issued at discount to par at a price of 99.827% in December 2010 at 3.75%, due December 2020 $1,000 issued at discount to par at a price of 99.958% in May 2011 at 2.65%, due June 2016, paid November 2015 $1,250 issued at discount to par at a price of 99.799% in May 2011 at 4.3%, due June 2021 $750 issued at discount to par at a price of 99.977% in September 2011 at 2.35%, paid March 2015 — $1,300 issued at discount to par at a price of 99.784% in September 2011 at 3.0%, due September 2016, paid November 2015 $1,000 issued at discount to par at a price of 99.816% in September 2011 at 4.375%, due September 2021 $1,200 issued at discount to par at a price of 99.863% in September 2011 at 6.0%, due September 2041 $650 issued at discount to par at a price of 99.946% in December 2011 at 2.625%, paid December 2014 — $850 issued at discount to par at a price of 99.790% in December 2011 at 3.3%, due December 2016, paid November 2015 $1,500 issued at discount to par at a price of 99.707% in December 2011 at 4.65%, due December 2021 $1,500 issued at discount to par at a price of 99.985% in March 2012 at 2.6%, due September 2017, paid November 2015 $500 issued at discount to par at a price of 99.771% in March 2012 at 4.05%, due September 2022 2012 Shelf Registration Statement: $750 issued at par in January 2014 at three-month USD LIBOR plus 0.94%, due January 2019 $1,250 issued at discount to par at a price of 99.954% in January 2014 at 2.75%, due January 2019 Hewlett Packard Enterprise Senior Notes $2,250 issued at discount to par at a price of 99.944% in October 2015 at 2.4%, due October 2017 — $2,650 issued at discount to par at a price of 99.872% in October 2015 at 2.8%, due October 2018 — $3,000 issued at discount to par at a price of 99.972% in October 2015 at 3.6%, due October 2020 — $1,350 issued at discount to par at a price of 99.802% in October 2015 at 4.4%, due October 2022 — $2,500 issued at discount to par at a price of 99.725% in October 2015 at 4.9%, due October 2025 — $750 issued at discount to par at a price of 99.942% in October 2015 at 6.2%, due October 2035 — $1,500 issued at discount to par at a price of 99.932% in October 2015 at 6.3%, due October 2045 — $350 issued at par in October 2015 at three-month USD LIBOR plus 1.74%, due October 2017 — $250 issued at par in October 2015 at three-month USD LIBOR plus 1.93%, due October 2018 — — EDS Senior Notes (1) $300 issued October 1999 at 7.45%, due October 2029 Other, including capital lease obligations, at 0.00%-8.30%, due in calendar years 2015-2024 (2) Fair value adjustment related to hedged debt Less: current portion ) ) Total long-term debt $ $ (1) HP may redeem some or all of the fixed-rate U.S. Dollar Global Notes and EDS Senior Notes at any time in accordance with the terms thereof. The U.S. Dollar Global Notes and EDS Senior Notes are senior unsecured debt. (2) Other, including capital lease obligations includes $196 million and $123 million as of October 31, 2015 and 2014, 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 borrowing. |
Schedule of aggregate future maturities of long-term debt at face value | As of October 31, 2015, aggregate future maturities of debt at face value (excluding a fair value adjustment related to hedged debt of $48 million, a premium on debt issuance of $13 million and a discount on debt issuance of $25 million) were as follows: Fiscal year Aggregate future maturities of debt outstanding including capital lease obligations In millions 2016 $ 2017 2018 2019 2020 Thereafter Total $ |
Schedule of interest expense on borrowings recognized in the Consolidated Statements of Earnings | Expense Location 2015 2014 2013 In millions Financing interest Financing interest $ $ $ Interest expense Interest and other, net Total interest expense $ $ $ |
Schedule of borrowing resources available to obtain short-term or long-term financing | As of October 31, 2015 In millions Commercial paper programs (1) $ Uncommitted lines of credit $ (1) The extent to which HP is able to utilize 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. |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Oct. 31, 2015 | |
Stockholders' Equity | |
Schedule of tax effects related to changes in other Comprehensive (Loss) Income | For the fiscal years ended October 31 2015 2014 2013 In millions Tax benefit (provision) on change in unrealized (losses) gains on available-for-sale securities: Tax benefit (provision) on unrealized (losses) gains arising during the period $ $ ) $ ) ) ) Tax benefit (provision) on change in unrealized (losses) gains on cash flow hedges: Tax (provision) benefit on unrealized gains (losses) arising during the period ) ) Tax provision (benefit) on (gains) losses reclassified into earnings ) ) ) Tax benefit (provision) on change in unrealized components of defined benefit plans: Tax benefit (provision) on (losses) gains arising during the period ) Tax benefit on amortization of actuarial loss and prior service benefit ) ) ) Tax benefit (provision) on curtailments, settlements and other ) ) ) Tax (provision) benefit on change in cumulative translation adjustment ) ) Tax benefit (provision) on other comprehensive (loss) income $ $ ) $ ) |
Schedule of changes and reclassifications related to items of Other Comprehensive (Loss) Income, net of taxes | For the fiscal years ended October 31 2015 2014 2013 In millions Other comprehensive (loss) income, net of taxes: Change in unrealized (losses) gains on available-for-sale securities: Unrealized (losses) gains arising during the period $ ) $ $ Gains reclassified into earnings — ) ) ) ) Change in unrealized (losses) gains on cash flow hedges: Unrealized gains (losses) arising during the period ) (Gains) losses reclassified into earnings (1) ) ) ) Change in unrealized components of defined benefit plans: (Losses) gains arising during the period ) ) Amortization of actuarial loss and prior service benefit (2) Curtailments, settlements and other ) Change in cumulative translation adjustment ) ) ) Other comprehensive (loss) income, net of taxes $ ) $ ) $ (1) Reclassification of pre-tax (gains) losses on cash flow hedges into the Consolidated Statements of Earnings was as follows: 2015 2014 2013 In millions Net revenue $ ) $ $ ) Cost of products Other operating expenses ) Interest and other, net ) ) $ ) $ $ (2) These components are included in the computation of net pension and post-retirement benefit (credit) cost in Note 4. |
Schedule of reclassifications of pre tax (gains) on cash flow hedges into the Consolidated Statements of Earnings | 2015 2014 2013 In millions Net revenue $ ) $ $ ) Cost of products Other operating expenses ) Interest and other, net ) ) $ ) $ $ |
Schedule of Accumulated Other Comprehensive Loss, net of taxes | Net unrealized gain on available-for-sale securities Net unrealized gain (loss) on cash flow hedges Unrealized components of defined benefit plans Cumulative translation adjustment Accumulated other comprehensive loss In millions Balance at beginning of period $ $ $ ) $ ) $ ) Other comprehensive (loss) income before reclassifications ) ) ) Reclassifications of (gains) losses into earnings — ) — ) Balance at end of period $ $ ) $ ) $ ) $ ) |
Net Earnings Per Share (Tables)
Net Earnings Per Share (Tables) | 12 Months Ended |
Oct. 31, 2015 | |
Net Earnings Per Share | |
Basic and diluted net Earnings Per Share calculations | For the fiscal years ended October 31 2015 2014 2013 In millions, except per share amounts Numerator: Net earnings (1) $ $ $ Denominator: Weighted-average shares used to compute basic net EPS Dilutive effect of employee stock plans Weighted-average shares used to compute diluted net EPS Net earnings per share: Basic $ $ $ Diluted $ $ $ Anti-dilutive weighted-average options (2) (1) HP considers restricted stock awards that provide the holder with a non-forfeitable right to receive dividends to be participating securities. As of October 31, 2015, there were no restricted stock awards outstanding. For fiscal 2014 and 2013, the net earnings allocated to participating securities were not significant. (2) HP excludes options and restricted stock units where the assumed proceeds exceed the average market price from the calculation of diluted net EPS, because their effect would be anti-dilutive. The assumed proceeds of an option include the sum of its exercise price, average unrecognized compensation cost and excess tax benefits. The assumed proceeds of a restricted stock unit include the sum of its average unrecognized compensation cost and excess tax benefits. |
Guarantees (Tables)
Guarantees (Tables) | 12 Months Ended |
Oct. 31, 2015 | |
Guarantees | |
Changes in aggregate product warranty liabilities and changes | As of October 31 2015 2014 In millions Balance at beginning of year $ $ Accruals for warranties issued Adjustments related to pre-existing warranties (including changes in estimates) ) Settlements made (in cash or in kind) ) ) Balance at end of year $ $ |
Commitments (Tables)
Commitments (Tables) | 12 Months Ended |
Oct. 31, 2015 | |
Commitments | |
Schedule of Future Minimum Rental and Lease Payments for Operating [Table Text Block] | As of October 31, 2015, future minimum operating lease commitments were as follows: Fiscal year In millions 2016 $ 2017 2018 2019 2020 Thereafter Less: Sublease rental income ) Total (1) $ (1) Subsequent to the Separation, HP expects the total remaining future minimum operating lease commitments to be approximately $367 million. |
Future unconditional purchase obligations | As of October 31, 2015, future unconditional purchase obligations were as follows: Fiscal year In millions 2016 $ 2017 2018 2019 2020 Thereafter Total (1) $ (1) Subsequent to the Separation, HP expects the total remaining future unconditional purchase obligations to be approximately $915 million. |
Overview and Summary of Signi43
Overview and Summary of Significant Accounting Policies (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2013 | Oct. 21, 2015 | |
Overview and Summary of Significant Accounting Policies | ||||
Number of shares of Hewlett Packard Enterprise common stock for every share of HP Inc. common stock | 1 | |||
Advertising cost | $ 859 | $ 834 | $ 867 |
Overview and Summary of Signi44
Overview and Summary of Significant Accounting Policies (Details 2) - Major Customers - Accounts Receivable $ in Billions | 12 Months Ended | |
Oct. 31, 2015USD ($)item | Oct. 31, 2014USD ($) | |
Ten largest distributor | ||
Concentration Risk | ||
Number of largest distributor and reseller receivable balances or largest outsourced manufacturer receivable balances | 10 | |
Concentration of credit risk (as a percent) | 18.00% | 20.00% |
Three largest outsourced manufacturer | ||
Concentration Risk | ||
Number of largest distributor and reseller receivable balances or largest outsourced manufacturer receivable balances | 3 | |
Concentration of credit risk (as a percent) | 60.00% | 65.00% |
Contract manufacturers receivables | $ | $ 1 | $ 1 |
Overview and Summary of Signi45
Overview and Summary of Significant Accounting Policies (Details 3) | 12 Months Ended |
Oct. 31, 2015 | |
Buildings and improvements | Minimum | |
Property, Plant and Equipment, Net | |
Estimated useful life for property, plant and equipment | 5 years |
Buildings and improvements | Maximum | |
Property, Plant and Equipment, Net | |
Estimated useful life for property, plant and equipment | 40 years |
Machinery and equipment, including equipment held for lease | Minimum | |
Property, Plant and Equipment, Net | |
Estimated useful life for property, plant and equipment | 3 years |
Machinery and equipment, including equipment held for lease | Maximum | |
Property, Plant and Equipment, Net | |
Estimated useful life for property, plant and equipment | 15 years |
Capitalized internal use software | Minimum | |
Property, Plant and Equipment, Net | |
Estimated useful life for property, plant and equipment | 3 years |
Capitalized internal use software | Maximum | |
Property, Plant and Equipment, Net | |
Estimated useful life for property, plant and equipment | 5 years |
Intangible Assets And Long Lived Assets | Minimum | |
Property, Plant and Equipment, Net | |
Estimated useful life for purchased intangible assets | 1 year |
Intangible Assets And Long Lived Assets | Maximum | |
Property, Plant and Equipment, Net | |
Estimated useful life for purchased intangible assets | 10 years |
Segment Information (Detail)
Segment Information (Detail) $ in Millions | Nov. 01, 2015segment | Jan. 31, 2015USD ($) | Oct. 31, 2015USD ($)segment | Oct. 31, 2014USD ($) | Oct. 31, 2013USD ($) |
Segment Reporting Information | |||||
Number of Reportable Segments | segment | 7 | ||||
Advance royalty proceeds received from intercompany advanced royalty payments and licensing arrangements | $ 8,800 | $ 11,500 | |||
Royalty recognition term | 5 years | 15 years | |||
Net revenue | $ 103,355 | $ 111,454 | $ 112,298 | ||
Earnings (loss) from operations | 5,471 | 7,185 | 7,131 | ||
Elimination of inter-segment net revenue and other | |||||
Segment Reporting Information | |||||
Net revenue | (3,760) | (3,682) | (3,515) | ||
Operating segments | |||||
Segment Reporting Information | |||||
Net revenue | 107,115 | 115,136 | 115,813 | ||
Earnings (loss) from operations | 10,505 | 11,328 | 10,802 | ||
Printing | |||||
Segment Reporting Information | |||||
Goodwill transferred | 512 | ||||
Enterprise Group | |||||
Segment Reporting Information | |||||
Net revenue | 26,670 | 26,809 | 27,045 | ||
Enterprise Group | Elimination of inter-segment net revenue and other | |||||
Segment Reporting Information | |||||
Net revenue | (1,237) | (914) | (958) | ||
Enterprise Group | Operating segments | |||||
Segment Reporting Information | |||||
Net revenue | 27,907 | 27,723 | 28,003 | ||
Earnings (loss) from operations | 3,981 | 3,995 | 4,245 | ||
Enterprise Services | |||||
Segment Reporting Information | |||||
Net revenue | 19,009 | 21,297 | 23,041 | ||
Enterprise Services | Elimination of inter-segment net revenue and other | |||||
Segment Reporting Information | |||||
Net revenue | (797) | (1,101) | (1,020) | ||
Enterprise Services | Operating segments | |||||
Segment Reporting Information | |||||
Net revenue | 19,806 | 22,398 | 24,061 | ||
Earnings (loss) from operations | 1,051 | 816 | 693 | ||
Software | |||||
Segment Reporting Information | |||||
Net revenue | 3,142 | 3,375 | 3,469 | ||
Goodwill transferred | (512) | ||||
Software | Elimination of inter-segment net revenue and other | |||||
Segment Reporting Information | |||||
Net revenue | (316) | (326) | (320) | ||
Software | Operating segments | |||||
Segment Reporting Information | |||||
Net revenue | 3,458 | 3,701 | 3,789 | ||
Earnings (loss) from operations | 760 | 828 | 848 | ||
HP Financial Services | |||||
Segment Reporting Information | |||||
Net revenue | 3,131 | 3,416 | 3,570 | ||
HP Financial Services | Elimination of inter-segment net revenue and other | |||||
Segment Reporting Information | |||||
Net revenue | (85) | (82) | (59) | ||
HP Financial Services | Operating segments | |||||
Segment Reporting Information | |||||
Net revenue | 3,216 | 3,498 | 3,629 | ||
Earnings (loss) from operations | 349 | 389 | 399 | ||
Corporate Investments | |||||
Segment Reporting Information | |||||
Net revenue | 27 | 302 | 24 | ||
Corporate Investments | Operating segments | |||||
Segment Reporting Information | |||||
Net revenue | 27 | 302 | 24 | ||
Earnings (loss) from operations | (565) | (199) | (316) | ||
Parent Company | |||||
Segment Reporting Information | |||||
Number of Reportable Segments | segment | 3 | ||||
Personal Systems and Printing Group | Operating segments | |||||
Segment Reporting Information | |||||
Net revenue | 52,701 | 57,514 | 56,307 | ||
Personal Systems and Printing Group | Personal Systems | |||||
Segment Reporting Information | |||||
Net revenue | 30,438 | 33,304 | 31,232 | ||
Personal Systems and Printing Group | Personal Systems | Elimination of inter-segment net revenue and other | |||||
Segment Reporting Information | |||||
Net revenue | (1,031) | (999) | (947) | ||
Personal Systems and Printing Group | Personal Systems | Operating segments | |||||
Segment Reporting Information | |||||
Net revenue | 31,469 | 34,303 | 32,179 | ||
Earnings (loss) from operations | 1,064 | 1,270 | 980 | ||
Personal Systems and Printing Group | Printing | |||||
Segment Reporting Information | |||||
Net revenue | 20,938 | 22,951 | 23,917 | ||
Personal Systems and Printing Group | Printing | Elimination of inter-segment net revenue and other | |||||
Segment Reporting Information | |||||
Net revenue | (294) | (260) | (211) | ||
Personal Systems and Printing Group | Printing | Operating segments | |||||
Segment Reporting Information | |||||
Net revenue | 21,232 | 23,211 | 24,128 | ||
Earnings (loss) from operations | $ 3,865 | $ 4,229 | $ 3,953 |
Segment Information (Detail 2)
Segment Information (Detail 2) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | ||
May. 31, 2015 | Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2013 | |
Segment Reporting Information | ||||
Net Revenue | $ 103,355 | $ 111,454 | $ 112,298 | |
Total segment earnings from operations | 5,471 | 7,185 | 7,131 | |
Stock-based compensation expense | (709) | (560) | (500) | |
Amortization of intangible assets | (931) | (1,000) | (1,373) | |
Restructuring charges | (1,017) | (1,619) | (990) | |
Acquisition-related charges | (90) | (11) | (22) | |
Separation costs | (1,259) | |||
Defined benefit plan settlement charges | (168) | |||
Impairment of data center assets | (136) | |||
Interest and other, net | (739) | (628) | (621) | |
Earnings before taxes | 4,732 | 6,557 | 6,510 | |
Assets | 106,882 | 103,206 | ||
Goodwill | 32,941 | 31,139 | 31,124 | |
Aruba | ||||
Segment Reporting Information | ||||
Total fair value of consideration | $ 2,800 | |||
Goodwill | 1,800 | |||
Intangible assets | 643 | |||
In-process research and development | Aruba | ||||
Segment Reporting Information | ||||
Intangible assets- indefinite | $ 153 | 153 | ||
Printing | ||||
Segment Reporting Information | ||||
Goodwill | 3,092 | 3,103 | 3,103 | |
Enterprise Group | ||||
Segment Reporting Information | ||||
Net Revenue | 26,670 | 26,809 | 27,045 | |
Enterprise Services | ||||
Segment Reporting Information | ||||
Net Revenue | 19,009 | 21,297 | 23,041 | |
Software | ||||
Segment Reporting Information | ||||
Net Revenue | 3,142 | 3,375 | 3,469 | |
Goodwill | 8,313 | 8,340 | 8,328 | |
HP Financial Services | ||||
Segment Reporting Information | ||||
Net Revenue | 3,131 | 3,416 | 3,570 | |
Goodwill | 144 | 144 | 144 | |
Corporate Investments | ||||
Segment Reporting Information | ||||
Net Revenue | 27 | 302 | 24 | |
Personal Systems and Printing Group | Personal Systems | ||||
Segment Reporting Information | ||||
Net Revenue | 30,438 | 33,304 | 31,232 | |
Personal Systems and Printing Group | Printing | ||||
Segment Reporting Information | ||||
Net Revenue | 20,938 | 22,951 | 23,917 | |
Operating segments | ||||
Segment Reporting Information | ||||
Net Revenue | 107,115 | 115,136 | 115,813 | |
Total segment earnings from operations | 10,505 | 11,328 | 10,802 | |
Operating segments | Enterprise Group | ||||
Segment Reporting Information | ||||
Net Revenue | 27,907 | 27,723 | 28,003 | |
Total segment earnings from operations | 3,981 | 3,995 | 4,245 | |
Assets | 33,499 | 27,236 | ||
Operating segments | Enterprise Services | ||||
Segment Reporting Information | ||||
Net Revenue | 19,806 | 22,398 | 24,061 | |
Total segment earnings from operations | 1,051 | 816 | 693 | |
Assets | 14,354 | 13,472 | ||
Operating segments | Software | ||||
Segment Reporting Information | ||||
Net Revenue | 3,458 | 3,701 | 3,789 | |
Total segment earnings from operations | 760 | 828 | 848 | |
Assets | 11,226 | 10,972 | ||
Operating segments | HP Financial Services | ||||
Segment Reporting Information | ||||
Net Revenue | 3,216 | 3,498 | 3,629 | |
Total segment earnings from operations | 349 | 389 | 399 | |
Assets | 13,093 | 13,529 | ||
Operating segments | Corporate Investments | ||||
Segment Reporting Information | ||||
Net Revenue | 27 | 302 | 24 | |
Total segment earnings from operations | (565) | (199) | (316) | |
Assets | 56 | 34 | ||
Operating segments | Personal Systems and Printing Group | ||||
Segment Reporting Information | ||||
Net Revenue | 52,701 | 57,514 | 56,307 | |
Assets | 18,528 | 22,770 | ||
Operating segments | Personal Systems and Printing Group | Personal Systems | ||||
Segment Reporting Information | ||||
Net Revenue | 31,469 | 34,303 | 32,179 | |
Total segment earnings from operations | 1,064 | 1,270 | 980 | |
Assets | 9,534 | 12,104 | ||
Operating segments | Personal Systems and Printing Group | Printing | ||||
Segment Reporting Information | ||||
Net Revenue | 21,232 | 23,211 | 24,128 | |
Total segment earnings from operations | 3,865 | 4,229 | 3,953 | |
Assets | 8,994 | 10,666 | ||
Elimination of inter-segment net revenue and other | ||||
Segment Reporting Information | ||||
Net Revenue | (3,760) | (3,682) | (3,515) | |
Elimination of inter-segment net revenue and other | Enterprise Group | ||||
Segment Reporting Information | ||||
Net Revenue | (1,237) | (914) | (958) | |
Elimination of inter-segment net revenue and other | Enterprise Services | ||||
Segment Reporting Information | ||||
Net Revenue | (797) | (1,101) | (1,020) | |
Elimination of inter-segment net revenue and other | Software | ||||
Segment Reporting Information | ||||
Net Revenue | (316) | (326) | (320) | |
Elimination of inter-segment net revenue and other | HP Financial Services | ||||
Segment Reporting Information | ||||
Net Revenue | (85) | (82) | (59) | |
Elimination of inter-segment net revenue and other | Personal Systems and Printing Group | Personal Systems | ||||
Segment Reporting Information | ||||
Net Revenue | (1,031) | (999) | (947) | |
Elimination of inter-segment net revenue and other | Personal Systems and Printing Group | Printing | ||||
Segment Reporting Information | ||||
Net Revenue | (294) | (260) | (211) | |
Significant Reconciling Items | ||||
Segment Reporting Information | ||||
Corporate and unallocated costs and eliminations | (724) | (953) | (786) | |
Stock-based compensation expense | (709) | (560) | (500) | |
Amortization of intangible assets | (931) | (1,000) | (1,373) | |
Restructuring charges | (1,017) | (1,619) | (990) | |
Acquisition-related charges | (90) | (11) | (22) | |
Separation costs | (1,259) | |||
Defined benefit plan settlement charges | (168) | |||
Impairment of data center assets | (136) | |||
Interest and other, net | (739) | (628) | $ (621) | |
Corporate and unallocated assets | ||||
Segment Reporting Information | ||||
Assets | $ 16,126 | $ 15,193 |
Segment Information (Detail 3)
Segment Information (Detail 3) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2013 | |
Segment Reporting Information | |||
Net revenue | $ 103,355 | $ 111,454 | $ 112,298 |
Net property, plant and equipment: | |||
Property, plant and equipment | 11,090 | 11,340 | |
U.S. | |||
Segment Reporting Information | |||
Net revenue | 37,679 | 38,805 | 40,284 |
Net property, plant and equipment: | |||
Property, plant and equipment | 5,501 | 5,668 | |
Non-U.S. | |||
Segment Reporting Information | |||
Net revenue | 65,676 | 72,649 | $ 72,014 |
U.K | |||
Net property, plant and equipment: | |||
Property, plant and equipment | 955 | 1,053 | |
Other countries | |||
Net property, plant and equipment: | |||
Property, plant and equipment | $ 4,634 | $ 4,619 |
Segment Information (Details 4)
Segment Information (Details 4) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2013 | |
Segment Reporting Information | |||
Net revenue | $ 103,355 | $ 111,454 | $ 112,298 |
Operating segments | |||
Segment Reporting Information | |||
Net revenue | 107,115 | 115,136 | 115,813 |
Elimination of inter-segment net revenue and other | |||
Segment Reporting Information | |||
Net revenue | (3,760) | (3,682) | (3,515) |
Enterprise Group | |||
Segment Reporting Information | |||
Net revenue | 26,670 | 26,809 | 27,045 |
Enterprise Group | Operating segments | |||
Segment Reporting Information | |||
Net revenue | 27,907 | 27,723 | 28,003 |
Enterprise Group | Operating segments | Industry Standard Servers | |||
Segment Reporting Information | |||
Net revenue | 13,412 | 12,474 | 12,102 |
Enterprise Group | Operating segments | Technology Services | |||
Segment Reporting Information | |||
Net revenue | 7,662 | 8,375 | 8,710 |
Enterprise Group | Operating segments | Storage | |||
Segment Reporting Information | |||
Net revenue | 3,180 | 3,316 | 3,475 |
Enterprise Group | Operating segments | Networking | |||
Segment Reporting Information | |||
Net revenue | 2,846 | 2,629 | 2,526 |
Enterprise Group | Operating segments | Business Critical Systems | |||
Segment Reporting Information | |||
Net revenue | 807 | 929 | 1,190 |
Enterprise Group | Elimination of inter-segment net revenue and other | |||
Segment Reporting Information | |||
Net revenue | (1,237) | (914) | (958) |
Enterprise Services | |||
Segment Reporting Information | |||
Net revenue | 19,009 | 21,297 | 23,041 |
Enterprise Services | Operating segments | |||
Segment Reporting Information | |||
Net revenue | 19,806 | 22,398 | 24,061 |
Enterprise Services | Operating segments | Infrastructure Technology Outsourcing | |||
Segment Reporting Information | |||
Net revenue | 12,107 | 14,038 | 15,223 |
Enterprise Services | Operating segments | Application and Business Services | |||
Segment Reporting Information | |||
Net revenue | 7,699 | 8,360 | 8,838 |
Enterprise Services | Elimination of inter-segment net revenue and other | |||
Segment Reporting Information | |||
Net revenue | (797) | (1,101) | (1,020) |
Software | |||
Segment Reporting Information | |||
Net revenue | 3,142 | 3,375 | 3,469 |
Software | Operating segments | |||
Segment Reporting Information | |||
Net revenue | 3,458 | 3,701 | 3,789 |
Software | Elimination of inter-segment net revenue and other | |||
Segment Reporting Information | |||
Net revenue | (316) | (326) | (320) |
HP Financial Services | |||
Segment Reporting Information | |||
Net revenue | 3,131 | 3,416 | 3,570 |
HP Financial Services | Operating segments | |||
Segment Reporting Information | |||
Net revenue | 3,216 | 3,498 | 3,629 |
HP Financial Services | Elimination of inter-segment net revenue and other | |||
Segment Reporting Information | |||
Net revenue | (85) | (82) | (59) |
Corporate Investments | |||
Segment Reporting Information | |||
Net revenue | 27 | 302 | 24 |
Corporate Investments | Operating segments | |||
Segment Reporting Information | |||
Net revenue | 27 | 302 | 24 |
Personal Systems and Printing Group | Operating segments | |||
Segment Reporting Information | |||
Net revenue | 52,701 | 57,514 | 56,307 |
Personal Systems and Printing Group | Personal Systems | |||
Segment Reporting Information | |||
Net revenue | 30,438 | 33,304 | 31,232 |
Personal Systems and Printing Group | Personal Systems | Operating segments | |||
Segment Reporting Information | |||
Net revenue | 31,469 | 34,303 | 32,179 |
Personal Systems and Printing Group | Personal Systems | Operating segments | Notebooks | |||
Segment Reporting Information | |||
Net revenue | 17,271 | 17,540 | 16,029 |
Personal Systems and Printing Group | Personal Systems | Operating segments | Desktops | |||
Segment Reporting Information | |||
Net revenue | 10,941 | 13,197 | 12,844 |
Personal Systems and Printing Group | Personal Systems | Operating segments | Workstations | |||
Segment Reporting Information | |||
Net revenue | 2,018 | 2,218 | 2,147 |
Personal Systems and Printing Group | Personal Systems | Operating segments | Other | |||
Segment Reporting Information | |||
Net revenue | 1,239 | 1,348 | 1,159 |
Personal Systems and Printing Group | Personal Systems | Elimination of inter-segment net revenue and other | |||
Segment Reporting Information | |||
Net revenue | (1,031) | (999) | (947) |
Personal Systems and Printing Group | Printing | |||
Segment Reporting Information | |||
Net revenue | 20,938 | 22,951 | 23,917 |
Personal Systems and Printing Group | Printing | Operating segments | |||
Segment Reporting Information | |||
Net revenue | 21,232 | 23,211 | 24,128 |
Personal Systems and Printing Group | Printing | Operating segments | Supplies | |||
Segment Reporting Information | |||
Net revenue | 13,979 | 14,917 | 15,716 |
Personal Systems and Printing Group | Printing | Operating segments | Commercial Hardware | |||
Segment Reporting Information | |||
Net revenue | 5,378 | 5,949 | 5,976 |
Personal Systems and Printing Group | Printing | Operating segments | Consumer Hardware | |||
Segment Reporting Information | |||
Net revenue | 1,875 | 2,345 | 2,436 |
Personal Systems and Printing Group | Printing | Elimination of inter-segment net revenue and other | |||
Segment Reporting Information | |||
Net revenue | $ (294) | $ (260) | $ (211) |
Restructuring (Details)
Restructuring (Details) $ in Millions | Sep. 14, 2015USD ($)employee | Oct. 31, 2015USD ($)position | Oct. 31, 2014USD ($) | Oct. 31, 2013USD ($) |
Restructuring Reserve | ||||
Balance at the beginning of the period | $ 1,114 | |||
Restructuring charges | 1,017 | $ 1,619 | $ 990 | |
Cash Payments | (1,243) | |||
Other Adjustments and Non-Cash Settlements | (83) | |||
Balance at the end of the period | 805 | 1,114 | ||
Short-term portion of restructuring reserve, recorded in Accrued restructuring | 689 | 898 | ||
Long-term portion of restructuring reserve, recorded in Other liabilities | 116 | 216 | ||
Total Costs Incurred to Date | 9,988 | |||
Total Expected Costs to be Incurred | 12,458 | |||
Fiscal 2015 Restructuring Plan | ||||
Restructuring Reserve | ||||
Restructuring charges | 391 | |||
Cash Payments | (1) | |||
Balance at the end of the period | 390 | |||
Total Costs Incurred to Date | 391 | |||
Total Expected Costs to be Incurred | $ 2,900 | $ 2,861 | ||
Completion Date | Oct. 31, 2018 | |||
Fiscal 2015 Restructuring Plan | Maximum | ||||
Restructuring Reserve | ||||
Expected positions to be eliminated | employee | 33,300 | |||
Fiscal 2015 Restructuring Plan | Parent Company | ||||
Restructuring Reserve | ||||
Total Expected Costs to be Incurred | $ 280 | |||
Fiscal 2015 Restructuring Plan | Severance | ||||
Restructuring Reserve | ||||
Restructuring charges | $ 390 | |||
Balance at the end of the period | 390 | |||
Total Costs Incurred to Date | 390 | |||
Total Expected Costs to be Incurred | 2,355 | |||
Fiscal 2015 Restructuring Plan | Infrastructure and other items | ||||
Restructuring Reserve | ||||
Restructuring charges | 1 | |||
Cash Payments | (1) | |||
Total Costs Incurred to Date | 1 | |||
Total Expected Costs to be Incurred | 506 | 506 | ||
Fiscal 2015 Restructuring Plan | Severance and workforce reductions | ||||
Restructuring Reserve | ||||
Total Expected Costs to be Incurred | $ 2,400 | |||
Fiscal 2012 Restructuring Plan | ||||
Restructuring Reserve | ||||
Balance at the beginning of the period | 1,053 | |||
Restructuring charges | 640 | |||
Cash Payments | (1,221) | |||
Other Adjustments and Non-Cash Settlements | (82) | |||
Balance at the end of the period | 390 | 1,053 | ||
Total Costs Incurred to Date | 5,548 | |||
Total Expected Costs to be Incurred | $ 5,548 | |||
Completion Date | Oct. 31, 2021 | |||
Fiscal 2012 Restructuring Plan | Severance | ||||
Restructuring Reserve | ||||
Balance at the beginning of the period | $ 955 | |||
Restructuring charges | 566 | |||
Cash Payments | (1,101) | |||
Other Adjustments and Non-Cash Settlements | (78) | |||
Balance at the end of the period | 342 | 955 | ||
Total Costs Incurred to Date | 4,959 | |||
Total Expected Costs to be Incurred | $ 4,959 | |||
Expected positions to be eliminated | position | 55,800 | |||
Fiscal 2012 Restructuring Plan | Infrastructure and other items | ||||
Restructuring Reserve | ||||
Balance at the beginning of the period | $ 98 | |||
Restructuring charges | 74 | |||
Cash Payments | (120) | |||
Other Adjustments and Non-Cash Settlements | (4) | |||
Balance at the end of the period | 48 | 98 | ||
Total Costs Incurred to Date | 589 | |||
Total Expected Costs to be Incurred | 589 | |||
Other Plans | ||||
Restructuring Reserve | ||||
Balance at the beginning of the period | 61 | |||
Restructuring charges | (14) | |||
Cash Payments | (21) | |||
Other Adjustments and Non-Cash Settlements | (1) | |||
Balance at the end of the period | 25 | 61 | ||
Total Costs Incurred to Date | 4,049 | |||
Total Expected Costs to be Incurred | $ 4,049 | |||
Completion Date | Oct. 31, 2019 | |||
Other Plans | Severance and workforce reductions | ||||
Restructuring Reserve | ||||
Balance at the beginning of the period | $ 7 | |||
Restructuring charges | (4) | |||
Cash Payments | (1) | |||
Other Adjustments and Non-Cash Settlements | (1) | |||
Balance at the end of the period | 1 | 7 | ||
Total Costs Incurred to Date | 2,625 | |||
Total Expected Costs to be Incurred | 2,625 | |||
Other Plans | Infrastructure | ||||
Restructuring Reserve | ||||
Balance at the beginning of the period | 54 | |||
Restructuring charges | (10) | |||
Cash Payments | (20) | |||
Balance at the end of the period | 24 | $ 54 | ||
Total Costs Incurred to Date | 1,424 | |||
Total Expected Costs to be Incurred | $ 1,424 |
Retirement and Post-Retiremen51
Retirement and Post-Retirement Benefit Plans (Details) - USD ($) $ in Millions | 12 Months Ended | |
Oct. 31, 2015 | Oct. 31, 2014 | |
Defined Benefit Plan And Deferred Profit Sharing Plan Disclosure [Line Items] | ||
Plan Assets | $ 11,819 | $ 12,807 |
Projected Benefit Obligation | 13,458 | 14,584 |
U.S. Defined Benefit Plans | ||
Defined Benefit Plan And Deferred Profit Sharing Plan Disclosure [Line Items] | ||
Plan Assets | 11,077 | 11,979 |
Projected Benefit Obligation | $ 12,716 | 13,756 |
Post-Retirement Benefit Plans | ||
Post Retirement Benefit Plans | ||
Eligible Age for HP Retirement Medical Savings Account Plan | 45 years | |
DPSP | ||
Defined Benefit Plan And Deferred Profit Sharing Plan Disclosure [Line Items] | ||
Plan Assets | $ 742 | 828 |
Projected Benefit Obligation | $ 742 | $ 828 |
Retirement and Post-Retiremen52
Retirement and Post-Retirement Benefit Plans (Details 2) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2013 | |
Defined Contribution Plan Disclosure [Line Items] | |||
Total defined contribution expense | $ 542 | $ 573 | $ 603 |
HP 401(k) Plan | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Percent of equal 401(k) match to employees effective during the period | 100.00% | ||
Percentage of maximum matching contribution | 4.00% |
Retirement and Post-Retiremen53
Retirement and Post-Retirement Benefit Plans (Details 3) - USD ($) $ in Millions | Nov. 01, 2014 | Jul. 31, 2015 | Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2013 |
U.S. Defined Benefit Plans | |||||
Net benefit (credit) cost | |||||
Service cost | $ 1 | $ 1 | $ 1 | ||
Interest cost | 566 | 569 | 560 | ||
Expected return on plan assets | (818) | (811) | (845) | ||
Amortization and deferrals: | |||||
Actuarial (gain) loss | 54 | 15 | 77 | ||
Net periodic benefit (credit) cost | (197) | (226) | (207) | ||
Settlement loss | 114 | 1 | 12 | ||
Net benefit cost (credit) | (83) | (225) | (195) | ||
Employer Contributions and Funding Policy | |||||
Contributions to benefit plans | $ 29 | 27 | |||
Percentage of eligible participants who elected to receive benefits | 50.00% | ||||
Lump sum payments to participants | $ 826 | ||||
Re-measurement resulting in additional benefit cost | $ 45 | ||||
Settlement Expense | 96 | ||||
Non-U.S. Defined Benefit Plans | |||||
Net benefit (credit) cost | |||||
Service cost | 326 | 308 | 337 | ||
Interest cost | 622 | 737 | 676 | ||
Expected return on plan assets | (1,166) | (1,140) | (1,007) | ||
Amortization and deferrals: | |||||
Actuarial (gain) loss | 441 | 318 | 341 | ||
Prior service benefit | (21) | (23) | (27) | ||
Net periodic benefit (credit) cost | 202 | 200 | 320 | ||
Curtailment gain | (7) | (3) | |||
Settlement loss | 4 | 12 | 18 | ||
Special termination benefits | 25 | 50 | 31 | ||
Net benefit cost (credit) | 231 | 255 | 366 | ||
Employer Contributions and Funding Policy | |||||
Expected contribution to defined benefit plans in fiscal 2016 | $ 18 | 384 | |||
Contributions to benefit plans | 619 | 1,019 | |||
U.S. non-qualified plan participants | |||||
Employer Contributions and Funding Policy | |||||
Expected contribution to defined benefit plans in fiscal 2016 | 36 | 37 | |||
Post-Retirement Benefit Plans | |||||
Net benefit (credit) cost | |||||
Service cost | 5 | 5 | 6 | ||
Interest cost | 29 | 32 | 31 | ||
Expected return on plan assets | (39) | (34) | (34) | ||
Amortization and deferrals: | |||||
Actuarial (gain) loss | (11) | (10) | 2 | ||
Prior service benefit | (20) | (41) | (67) | ||
Net periodic benefit (credit) cost | (36) | (48) | (62) | ||
Curtailment gain | (7) | ||||
Special termination benefits | 1 | 32 | (5) | ||
Net benefit cost (credit) | $ (35) | (16) | $ (74) | ||
Age for eligibility under HP Retirement Medical Savings Account Plan | 45 years | ||||
Employer Contributions and Funding Policy | |||||
Expected contribution to defined benefit plans in fiscal 2016 | $ 43 | $ 46 | |||
Contributions to benefit plans | $ 39 | $ 92 |
Retirement and Post-Retiremen54
Retirement and Post-Retirement Benefit Plans (Details 4) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2013 | |
Change in benefit obligation: | |||
Settlement | $ (168) | ||
U.S. Defined Benefit Plans | |||
Weighted average assumptions used to calculate net benefit (credit) cost | |||
Discount rate (as a percent) | 4.40% | 4.90% | 4.10% |
Expected increase in compensation levels (as a percent) | 2.00% | 2.00% | 2.00% |
Expected long-term return on plan assets (as a percent) | 7.20% | 7.70% | 7.80% |
Increase in defined benefit plan benefit obligation | $ 870 | ||
Change in fair value of plan assets: | |||
Fair value - beginning of year | $ 11,979 | 10,866 | |
Acquisition/addition of plans | (1) | ||
Actual return on plan assets | 506 | 1,648 | |
Employer contributions | 29 | 27 | |
Benefits paid | (322) | (558) | |
Settlement | (1,114) | (4) | |
Fair value - end of year | 11,077 | 11,979 | $ 10,866 |
Change in benefit obligation: | |||
Projected benefit obligation - beginning of year | 13,756 | 11,866 | |
Acquisition/addition of plans | (1) | ||
Service cost | 1 | 1 | 1 |
Interest cost | 566 | 569 | 560 |
Actuarial (gain) loss | (170) | 1,882 | |
Benefits paid | (322) | (558) | |
Settlement | (1,114) | (4) | |
Projected benefit obligation - end of year | 12,716 | 13,756 | $ 11,866 |
Funded status at end of year | (1,639) | (1,777) | |
Accumulated benefit obligation | $ 12,715 | $ 13,755 | |
Weighted average assumptions used to calculate the projected benefit obligations | |||
Discount rate (as a percent) | 4.40% | 4.40% | |
Expected increase in compensation levels (as a percent) | 2.00% | 2.00% | |
Net amounts recognized for defined benefit and post-retirement benefit plans in Consolidated Balance Sheets | |||
Current liabilities | $ (37) | $ (35) | |
Noncurrent liabilities | (1,602) | (1,742) | |
Funded status at end of year | (1,639) | (1,777) | |
Pretax net actuarial loss (gain) and prior service benefit recognized in accumulated other comprehensive loss for defined benefit and post-retirement benefit plans | |||
Net actuarial loss (gain) | 1,379 | ||
Total recognized in Accumulated other comprehensive loss | 1,379 | ||
Net actuarial loss (gain) and prior service benefit that are expected to be amortized from accumulated other comprehensive loss (income) and recognized as components of net periodic benefit cost (credit) | |||
Net actuarial (loss) gain | 55 | ||
Total expected to be recognized in net periodic benefit (credit) cost | 55 | ||
Defined benefit plans with projected benefit obligations exceeding the fair value of plan assets | |||
Aggregate fair value of plan assets | 11,077 | 11,979 | |
Aggregate projected benefit obligation | 12,716 | 13,756 | |
Defined benefit plans with accumulated benefit obligations exceeding the fair value of plan assets | |||
Aggregate fair value of plan assets | 11,077 | 11,979 | |
Aggregate accumulated benefit obligation | 12,715 | 13,755 | |
Contributions to benefit plans | $ 29 | $ 27 | |
Non-U.S. Defined Benefit Plans | |||
Weighted average assumptions used to calculate net benefit (credit) cost | |||
Discount rate (as a percent) | 3.00% | 3.90% | 3.80% |
Expected increase in compensation levels (as a percent) | 2.40% | 2.40% | 2.40% |
Expected long-term return on plan assets (as a percent) | 6.90% | 7.00% | 7.20% |
Change in fair value of plan assets: | |||
Fair value - beginning of year | $ 17,570 | $ 16,083 | |
Acquisition/addition of plans | 5 | 8 | |
Actual return on plan assets | 1,059 | 1,814 | |
Employer contributions | 619 | 1,019 | |
Participant contributions | 55 | 64 | |
Benefits paid | (570) | (568) | |
Settlement | (17) | (49) | |
Currency impact | (1,244) | (801) | |
Fair value - end of year | 17,477 | 17,570 | $ 16,083 |
Change in benefit obligation: | |||
Projected benefit obligation - beginning of year | 21,220 | 19,152 | |
Acquisition/addition of plans | 1 | 10 | |
Service cost | 326 | 308 | 337 |
Interest cost | 622 | 737 | 676 |
Participant contributions | 55 | 64 | |
Actuarial (gain) loss | 457 | 2,500 | |
Benefits paid | (570) | (568) | |
Plan amendments | (89) | ||
Curtailment | (49) | ||
Settlement | (17) | (49) | |
Special termination benefits | 25 | 50 | 31 |
Currency impact | (1,509) | (935) | |
Projected benefit obligation - end of year | 20,521 | 21,220 | 19,152 |
Funded status at end of year | (3,044) | (3,650) | |
Accumulated benefit obligation | $ 19,695 | $ 20,207 | |
Weighted average assumptions used to calculate the projected benefit obligations | |||
Discount rate (as a percent) | 3.00% | 3.20% | |
Expected increase in compensation levels (as a percent) | 2.50% | 2.50% | |
Net amounts recognized for defined benefit and post-retirement benefit plans in Consolidated Balance Sheets | |||
Noncurrent assets | $ 532 | $ 421 | |
Current liabilities | (42) | (43) | |
Noncurrent liabilities | (3,534) | (4,028) | |
Funded status at end of year | (3,044) | (3,650) | |
Pretax net actuarial loss (gain) and prior service benefit recognized in accumulated other comprehensive loss for defined benefit and post-retirement benefit plans | |||
Net actuarial loss (gain) | 5,161 | ||
Prior service benefit | (242) | ||
Total recognized in Accumulated other comprehensive loss | 4,919 | ||
Net actuarial loss (gain) and prior service benefit that are expected to be amortized from accumulated other comprehensive loss (income) and recognized as components of net periodic benefit cost (credit) | |||
Net actuarial (loss) gain | 25 | ||
Prior service benefit | (3) | ||
Total expected to be recognized in net periodic benefit (credit) cost | 22 | ||
Defined benefit plans with projected benefit obligations exceeding the fair value of plan assets | |||
Aggregate fair value of plan assets | 8,928 | 12,701 | |
Aggregate projected benefit obligation | 12,504 | 16,774 | |
Defined benefit plans with accumulated benefit obligations exceeding the fair value of plan assets | |||
Aggregate fair value of plan assets | 8,858 | 12,578 | |
Aggregate accumulated benefit obligation | 11,804 | 15,797 | |
Special termination benefits | 25 | 50 | 31 |
Contributions to benefit plans | $ 619 | 1,019 | |
Curtailment gain | $ (7) | $ (3) | |
Post-Retirement Benefit Plans | |||
Weighted average assumptions used to calculate net benefit (credit) cost | |||
Discount rate (as a percent) | 3.60% | 3.90% | 3.00% |
Expected long-term return on plan assets (as a percent) | 9.00% | 8.90% | 9.00% |
Change in fair value of plan assets: | |||
Fair value - beginning of year | $ 458 | $ 396 | |
Actual return on plan assets | 45 | 83 | |
Employer contributions | 39 | 92 | |
Participant contributions | 57 | 54 | |
Benefits paid | (126) | (167) | |
Fair value - end of year | 474 | 458 | $ 396 |
Change in benefit obligation: | |||
Projected benefit obligation - beginning of year | 840 | 867 | |
Service cost | 5 | 5 | 6 |
Interest cost | 29 | 32 | 31 |
Participant contributions | 57 | 54 | |
Actuarial (gain) loss | (59) | 22 | |
Benefits paid | (126) | (167) | |
Special termination benefits | 1 | 32 | (5) |
Currency impact | (10) | (5) | |
Projected benefit obligation - end of year | 737 | 840 | 867 |
Funded status at end of year | $ (263) | $ (382) | |
Weighted average assumptions used to calculate the projected benefit obligations | |||
Discount rate (as a percent) | 3.80% | 3.60% | |
Net amounts recognized for defined benefit and post-retirement benefit plans in Consolidated Balance Sheets | |||
Current liabilities | $ (46) | $ (47) | |
Noncurrent liabilities | (217) | (335) | |
Funded status at end of year | (263) | (382) | |
Pretax net actuarial loss (gain) and prior service benefit recognized in accumulated other comprehensive loss for defined benefit and post-retirement benefit plans | |||
Net actuarial loss (gain) | (173) | ||
Prior service benefit | (99) | ||
Total recognized in Accumulated other comprehensive loss | (272) | ||
Net actuarial loss (gain) and prior service benefit that are expected to be amortized from accumulated other comprehensive loss (income) and recognized as components of net periodic benefit cost (credit) | |||
Net actuarial (loss) gain | (12) | ||
Prior service benefit | (17) | ||
Total expected to be recognized in net periodic benefit (credit) cost | (29) | ||
Defined benefit plans with accumulated benefit obligations exceeding the fair value of plan assets | |||
Special termination benefits | 1 | 32 | (5) |
Contributions to benefit plans | $ 39 | $ 92 | |
Curtailment gain | $ (7) |
Retirement and Post-Retiremen55
Retirement and Post-Retirement Benefit Plans (Details 5) - USD ($) $ in Millions | Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2013 |
U.S. Defined Benefit Plans | |||
Retirement and post-retirement benefit plans | |||
Fair value of plan assets | $ 11,077 | $ 11,979 | $ 10,866 |
U.S. Defined Benefit Plans | U.S, equity securities | |||
Retirement and post-retirement benefit plans | |||
Fair value of plan assets | 1,880 | 1,787 | |
U.S. Defined Benefit Plans | Non-U.S, equity securities | |||
Retirement and post-retirement benefit plans | |||
Fair value of plan assets | 1,335 | 1,268 | |
U.S. Defined Benefit Plans | Corporate debt securities | |||
Retirement and post-retirement benefit plans | |||
Fair value of plan assets | 3,269 | 3,290 | |
U.S. Defined Benefit Plans | Government debt securities | |||
Retirement and post-retirement benefit plans | |||
Fair value of plan assets | 1,756 | 2,204 | |
U.S. Defined Benefit Plans | Private Equity, Alternative Investments | |||
Retirement and post-retirement benefit plans | |||
Fair value of plan assets | 1,170 | 1,284 | |
U.S. Defined Benefit Plans | Hybrids, Alternative Investments | |||
Retirement and post-retirement benefit plans | |||
Fair value of plan assets | 3 | ||
U.S. Defined Benefit Plans | Hedge Funds, Alternative Investments | |||
Retirement and post-retirement benefit plans | |||
Fair value of plan assets | 648 | 609 | |
U.S. Defined Benefit Plans | Common Collective Trusts and 103-12 Investment Entities | |||
Retirement and post-retirement benefit plans | |||
Fair value of plan assets | 756 | 854 | |
U.S. Defined Benefit Plans | Registered Investment Companies | |||
Retirement and post-retirement benefit plans | |||
Fair value of plan assets | 214 | 382 | |
U.S. Defined Benefit Plans | Cash and Cash Equivalents | |||
Retirement and post-retirement benefit plans | |||
Fair value of plan assets | 241 | 227 | |
U.S. Defined Benefit Plans | Other | |||
Retirement and post-retirement benefit plans | |||
Fair value of plan assets | (192) | 71 | |
U.S. Defined Benefit Plans | Fair Value Measured Using Level 1 | |||
Retirement and post-retirement benefit plans | |||
Fair value of plan assets | 3,007 | 3,260 | |
U.S. Defined Benefit Plans | Fair Value Measured Using Level 1 | U.S, equity securities | |||
Retirement and post-retirement benefit plans | |||
Fair value of plan assets | 1,833 | 1,787 | |
U.S. Defined Benefit Plans | Fair Value Measured Using Level 1 | Non-U.S, equity securities | |||
Retirement and post-retirement benefit plans | |||
Fair value of plan assets | 1,322 | 1,268 | |
U.S. Defined Benefit Plans | Fair Value Measured Using Level 1 | Registered Investment Companies | |||
Retirement and post-retirement benefit plans | |||
Fair value of plan assets | 38 | 68 | |
U.S. Defined Benefit Plans | Fair Value Measured Using Level 1 | Cash and Cash Equivalents | |||
Retirement and post-retirement benefit plans | |||
Fair value of plan assets | 38 | 161 | |
U.S. Defined Benefit Plans | Fair Value Measured Using Level 1 | Other | |||
Retirement and post-retirement benefit plans | |||
Fair value of plan assets | (224) | (24) | |
U.S. Defined Benefit Plans | Fair Value Measured Using Level 2 | |||
Retirement and post-retirement benefit plans | |||
Fair value of plan assets | 6,609 | 7,162 | |
U.S. Defined Benefit Plans | Fair Value Measured Using Level 2 | U.S, equity securities | |||
Retirement and post-retirement benefit plans | |||
Fair value of plan assets | 47 | ||
U.S. Defined Benefit Plans | Fair Value Measured Using Level 2 | Non-U.S, equity securities | |||
Retirement and post-retirement benefit plans | |||
Fair value of plan assets | 13 | ||
U.S. Defined Benefit Plans | Fair Value Measured Using Level 2 | Corporate debt securities | |||
Retirement and post-retirement benefit plans | |||
Fair value of plan assets | 3,238 | 3,283 | |
U.S. Defined Benefit Plans | Fair Value Measured Using Level 2 | Government debt securities | |||
Retirement and post-retirement benefit plans | |||
Fair value of plan assets | 1,756 | 2,204 | |
U.S. Defined Benefit Plans | Fair Value Measured Using Level 2 | Hedge Funds, Alternative Investments | |||
Retirement and post-retirement benefit plans | |||
Fair value of plan assets | 388 | 346 | |
U.S. Defined Benefit Plans | Fair Value Measured Using Level 2 | Common Collective Trusts and 103-12 Investment Entities | |||
Retirement and post-retirement benefit plans | |||
Fair value of plan assets | 756 | 854 | |
U.S. Defined Benefit Plans | Fair Value Measured Using Level 2 | Registered Investment Companies | |||
Retirement and post-retirement benefit plans | |||
Fair value of plan assets | 176 | 314 | |
U.S. Defined Benefit Plans | Fair Value Measured Using Level 2 | Cash and Cash Equivalents | |||
Retirement and post-retirement benefit plans | |||
Fair value of plan assets | 203 | 66 | |
U.S. Defined Benefit Plans | Fair Value Measured Using Level 2 | Other | |||
Retirement and post-retirement benefit plans | |||
Fair value of plan assets | 32 | 95 | |
U.S. Defined Benefit Plans | Fair Value Measured Using Level 3 | |||
Retirement and post-retirement benefit plans | |||
Fair value of plan assets | 1,461 | 1,557 | 1,365 |
U.S. Defined Benefit Plans | Fair Value Measured Using Level 3 | Corporate debt securities | |||
Retirement and post-retirement benefit plans | |||
Fair value of plan assets | 31 | 7 | |
U.S. Defined Benefit Plans | Fair Value Measured Using Level 3 | Private Equity, Alternative Investments | |||
Retirement and post-retirement benefit plans | |||
Fair value of plan assets | 1,170 | 1,284 | 1,250 |
U.S. Defined Benefit Plans | Fair Value Measured Using Level 3 | Hybrids, Alternative Investments | |||
Retirement and post-retirement benefit plans | |||
Fair value of plan assets | 3 | 2 | |
U.S. Defined Benefit Plans | Fair Value Measured Using Level 3 | Hedge Funds, Alternative Investments | |||
Retirement and post-retirement benefit plans | |||
Fair value of plan assets | 260 | 263 | 113 |
Non-U.S. Defined Benefit Plans | |||
Retirement and post-retirement benefit plans | |||
Fair value of plan assets | 17,477 | 17,570 | 16,083 |
Non-U.S. Defined Benefit Plans | U.S, equity securities | |||
Retirement and post-retirement benefit plans | |||
Fair value of plan assets | 2,927 | 2,965 | |
Non-U.S. Defined Benefit Plans | Non-U.S, equity securities | |||
Retirement and post-retirement benefit plans | |||
Fair value of plan assets | 4,662 | 4,872 | |
Non-U.S. Defined Benefit Plans | Corporate debt securities | |||
Retirement and post-retirement benefit plans | |||
Fair value of plan assets | 3,352 | 2,935 | |
Non-U.S. Defined Benefit Plans | Government debt securities | |||
Retirement and post-retirement benefit plans | |||
Fair value of plan assets | 1,534 | 1,787 | |
Non-U.S. Defined Benefit Plans | Private Equity, Alternative Investments | |||
Retirement and post-retirement benefit plans | |||
Fair value of plan assets | 71 | 53 | |
Non-U.S. Defined Benefit Plans | Hybrids, Alternative Investments | |||
Retirement and post-retirement benefit plans | |||
Fair value of plan assets | 2,700 | 2,623 | |
Non-U.S. Defined Benefit Plans | Hedge Funds, Alternative Investments | |||
Retirement and post-retirement benefit plans | |||
Fair value of plan assets | 403 | 388 | |
Non-U.S. Defined Benefit Plans | Real Estate Funds | |||
Retirement and post-retirement benefit plans | |||
Fair value of plan assets | 1,084 | 1,040 | |
Non-U.S. Defined Benefit Plans | Insurance Group Annuity Contracts | |||
Retirement and post-retirement benefit plans | |||
Fair value of plan assets | 119 | 123 | |
Non-U.S. Defined Benefit Plans | Common Collective Trusts and 103-12 Investment Entities | |||
Retirement and post-retirement benefit plans | |||
Fair value of plan assets | 7 | ||
Non-U.S. Defined Benefit Plans | Registered Investment Companies | |||
Retirement and post-retirement benefit plans | |||
Fair value of plan assets | 1 | ||
Non-U.S. Defined Benefit Plans | Cash and Cash Equivalents | |||
Retirement and post-retirement benefit plans | |||
Fair value of plan assets | 493 | 573 | |
Non-U.S. Defined Benefit Plans | Other | |||
Retirement and post-retirement benefit plans | |||
Fair value of plan assets | 124 | 211 | |
Non-U.S. Defined Benefit Plans | Fair Value Measured Using Level 1 | |||
Retirement and post-retirement benefit plans | |||
Fair value of plan assets | 7,989 | 7,971 | |
Non-U.S. Defined Benefit Plans | Fair Value Measured Using Level 1 | U.S, equity securities | |||
Retirement and post-retirement benefit plans | |||
Fair value of plan assets | 2,851 | 2,935 | |
Non-U.S. Defined Benefit Plans | Fair Value Measured Using Level 1 | Non-U.S, equity securities | |||
Retirement and post-retirement benefit plans | |||
Fair value of plan assets | 4,085 | 4,050 | |
Non-U.S. Defined Benefit Plans | Fair Value Measured Using Level 1 | Hybrids, Alternative Investments | |||
Retirement and post-retirement benefit plans | |||
Fair value of plan assets | 114 | ||
Non-U.S. Defined Benefit Plans | Fair Value Measured Using Level 1 | Hedge Funds, Alternative Investments | |||
Retirement and post-retirement benefit plans | |||
Fair value of plan assets | 28 | ||
Non-U.S. Defined Benefit Plans | Fair Value Measured Using Level 1 | Real Estate Funds | |||
Retirement and post-retirement benefit plans | |||
Fair value of plan assets | 464 | 220 | |
Non-U.S. Defined Benefit Plans | Fair Value Measured Using Level 1 | Cash and Cash Equivalents | |||
Retirement and post-retirement benefit plans | |||
Fair value of plan assets | 493 | 573 | |
Non-U.S. Defined Benefit Plans | Fair Value Measured Using Level 1 | Other | |||
Retirement and post-retirement benefit plans | |||
Fair value of plan assets | 68 | 79 | |
Non-U.S. Defined Benefit Plans | Fair Value Measured Using Level 2 | |||
Retirement and post-retirement benefit plans | |||
Fair value of plan assets | 8,369 | 8,516 | |
Non-U.S. Defined Benefit Plans | Fair Value Measured Using Level 2 | U.S, equity securities | |||
Retirement and post-retirement benefit plans | |||
Fair value of plan assets | 76 | 30 | |
Non-U.S. Defined Benefit Plans | Fair Value Measured Using Level 2 | Non-U.S, equity securities | |||
Retirement and post-retirement benefit plans | |||
Fair value of plan assets | 494 | 742 | |
Non-U.S. Defined Benefit Plans | Fair Value Measured Using Level 2 | Corporate debt securities | |||
Retirement and post-retirement benefit plans | |||
Fair value of plan assets | 3,352 | 2,935 | |
Non-U.S. Defined Benefit Plans | Fair Value Measured Using Level 2 | Government debt securities | |||
Retirement and post-retirement benefit plans | |||
Fair value of plan assets | 1,534 | 1,787 | |
Non-U.S. Defined Benefit Plans | Fair Value Measured Using Level 2 | Private Equity, Alternative Investments | |||
Retirement and post-retirement benefit plans | |||
Fair value of plan assets | 1 | 2 | |
Non-U.S. Defined Benefit Plans | Fair Value Measured Using Level 2 | Hybrids, Alternative Investments | |||
Retirement and post-retirement benefit plans | |||
Fair value of plan assets | 2,670 | 2,466 | |
Non-U.S. Defined Benefit Plans | Fair Value Measured Using Level 2 | Hedge Funds, Alternative Investments | |||
Retirement and post-retirement benefit plans | |||
Fair value of plan assets | 125 | 103 | |
Non-U.S. Defined Benefit Plans | Fair Value Measured Using Level 2 | Real Estate Funds | |||
Retirement and post-retirement benefit plans | |||
Fair value of plan assets | 49 | 277 | |
Non-U.S. Defined Benefit Plans | Fair Value Measured Using Level 2 | Insurance Group Annuity Contracts | |||
Retirement and post-retirement benefit plans | |||
Fair value of plan assets | 46 | 44 | |
Non-U.S. Defined Benefit Plans | Fair Value Measured Using Level 2 | Common Collective Trusts and 103-12 Investment Entities | |||
Retirement and post-retirement benefit plans | |||
Fair value of plan assets | 7 | ||
Non-U.S. Defined Benefit Plans | Fair Value Measured Using Level 2 | Registered Investment Companies | |||
Retirement and post-retirement benefit plans | |||
Fair value of plan assets | 1 | ||
Non-U.S. Defined Benefit Plans | Fair Value Measured Using Level 2 | Other | |||
Retirement and post-retirement benefit plans | |||
Fair value of plan assets | 14 | 130 | |
Non-U.S. Defined Benefit Plans | Fair Value Measured Using Level 3 | |||
Retirement and post-retirement benefit plans | |||
Fair value of plan assets | 1,119 | 1,083 | 737 |
Non-U.S. Defined Benefit Plans | Fair Value Measured Using Level 3 | Non-U.S, equity securities | |||
Retirement and post-retirement benefit plans | |||
Fair value of plan assets | 83 | 80 | 77 |
Non-U.S. Defined Benefit Plans | Fair Value Measured Using Level 3 | Private Equity, Alternative Investments | |||
Retirement and post-retirement benefit plans | |||
Fair value of plan assets | 70 | 51 | 48 |
Non-U.S. Defined Benefit Plans | Fair Value Measured Using Level 3 | Hybrids, Alternative Investments | |||
Retirement and post-retirement benefit plans | |||
Fair value of plan assets | 30 | 43 | |
Non-U.S. Defined Benefit Plans | Fair Value Measured Using Level 3 | Hedge Funds, Alternative Investments | |||
Retirement and post-retirement benefit plans | |||
Fair value of plan assets | 250 | 285 | 204 |
Non-U.S. Defined Benefit Plans | Fair Value Measured Using Level 3 | Real Estate Funds | |||
Retirement and post-retirement benefit plans | |||
Fair value of plan assets | 571 | 543 | 325 |
Non-U.S. Defined Benefit Plans | Fair Value Measured Using Level 3 | Insurance Group Annuity Contracts | |||
Retirement and post-retirement benefit plans | |||
Fair value of plan assets | 73 | 79 | 81 |
Non-U.S. Defined Benefit Plans | Fair Value Measured Using Level 3 | Other | |||
Retirement and post-retirement benefit plans | |||
Fair value of plan assets | 42 | 2 | 2 |
Post-Retirement Benefit Plans | |||
Retirement and post-retirement benefit plans | |||
Fair value of plan assets | 474 | 458 | 396 |
Post-Retirement Benefit Plans | U.S, equity securities | |||
Retirement and post-retirement benefit plans | |||
Fair value of plan assets | 1 | ||
Post-Retirement Benefit Plans | Corporate debt securities | |||
Retirement and post-retirement benefit plans | |||
Fair value of plan assets | 28 | 20 | |
Post-Retirement Benefit Plans | Government debt securities | |||
Retirement and post-retirement benefit plans | |||
Fair value of plan assets | 39 | 22 | |
Post-Retirement Benefit Plans | Private Equity, Alternative Investments | |||
Retirement and post-retirement benefit plans | |||
Fair value of plan assets | 253 | 271 | |
Post-Retirement Benefit Plans | Hybrids, Alternative Investments | |||
Retirement and post-retirement benefit plans | |||
Fair value of plan assets | 1 | ||
Post-Retirement Benefit Plans | Common Collective Trusts and 103-12 Investment Entities | |||
Retirement and post-retirement benefit plans | |||
Fair value of plan assets | 59 | 55 | |
Post-Retirement Benefit Plans | Registered Investment Companies | |||
Retirement and post-retirement benefit plans | |||
Fair value of plan assets | 95 | 87 | |
Post-Retirement Benefit Plans | Cash and Cash Equivalents | |||
Retirement and post-retirement benefit plans | |||
Fair value of plan assets | 7 | 6 | |
Post-Retirement Benefit Plans | Other | |||
Retirement and post-retirement benefit plans | |||
Fair value of plan assets | (8) | (4) | |
Post-Retirement Benefit Plans | Fair Value Measured Using Level 1 | |||
Retirement and post-retirement benefit plans | |||
Fair value of plan assets | 88 | 82 | |
Post-Retirement Benefit Plans | Fair Value Measured Using Level 1 | Registered Investment Companies | |||
Retirement and post-retirement benefit plans | |||
Fair value of plan assets | 92 | 86 | |
Post-Retirement Benefit Plans | Fair Value Measured Using Level 1 | Cash and Cash Equivalents | |||
Retirement and post-retirement benefit plans | |||
Fair value of plan assets | 4 | ||
Post-Retirement Benefit Plans | Fair Value Measured Using Level 1 | Other | |||
Retirement and post-retirement benefit plans | |||
Fair value of plan assets | (8) | (4) | |
Post-Retirement Benefit Plans | Fair Value Measured Using Level 2 | |||
Retirement and post-retirement benefit plans | |||
Fair value of plan assets | 133 | 104 | |
Post-Retirement Benefit Plans | Fair Value Measured Using Level 2 | Non-U.S, equity securities | |||
Retirement and post-retirement benefit plans | |||
Fair value of plan assets | 1 | ||
Post-Retirement Benefit Plans | Fair Value Measured Using Level 2 | Corporate debt securities | |||
Retirement and post-retirement benefit plans | |||
Fair value of plan assets | 28 | 20 | |
Post-Retirement Benefit Plans | Fair Value Measured Using Level 2 | Government debt securities | |||
Retirement and post-retirement benefit plans | |||
Fair value of plan assets | 39 | 22 | |
Post-Retirement Benefit Plans | Fair Value Measured Using Level 2 | Common Collective Trusts and 103-12 Investment Entities | |||
Retirement and post-retirement benefit plans | |||
Fair value of plan assets | 59 | 55 | |
Post-Retirement Benefit Plans | Fair Value Measured Using Level 2 | Registered Investment Companies | |||
Retirement and post-retirement benefit plans | |||
Fair value of plan assets | 3 | 1 | |
Post-Retirement Benefit Plans | Fair Value Measured Using Level 2 | Cash and Cash Equivalents | |||
Retirement and post-retirement benefit plans | |||
Fair value of plan assets | 3 | 6 | |
Post-Retirement Benefit Plans | Fair Value Measured Using Level 3 | |||
Retirement and post-retirement benefit plans | |||
Fair value of plan assets | 253 | 272 | 235 |
Post-Retirement Benefit Plans | Fair Value Measured Using Level 3 | Private Equity, Alternative Investments | |||
Retirement and post-retirement benefit plans | |||
Fair value of plan assets | $ 253 | 271 | 234 |
Post-Retirement Benefit Plans | Fair Value Measured Using Level 3 | Hybrids, Alternative Investments | |||
Retirement and post-retirement benefit plans | |||
Fair value of plan assets | $ 1 | $ 1 |
Retirement and Post-Retiremen56
Retirement and Post-Retirement Benefit Plans (Details 6) $ in Thousands | Nov. 01, 2014USD ($) | Oct. 31, 2015USD ($)item | Oct. 31, 2014USD ($) | Nov. 01, 2015USD ($) | Oct. 31, 2015USD ($) | Oct. 31, 2014USD ($) |
Separation related activities | ||||||
Number of identical pension plans | item | 2 | |||||
Pension Plans | Forecast | ||||||
Actual return on plan assets: | ||||||
Plan assets | $ 11,930 | |||||
Separation related activities | ||||||
Funded status at end of year | 1,862,000 | |||||
Projected benefit obligation | 13,792 | |||||
U.S. Defined Benefit Plans | ||||||
Changes in fair value measurements of Level 3 investments | ||||||
Fair value - beginning of year | $ 11,979,000 | $ 11,979,000 | $ 10,866,000 | |||
Actual return on plan assets: | ||||||
Plan assets | 11,979,000 | $ 11,979,000 | 10,866,000 | $ 11,077,000 | $ 11,979,000 | |
Plan assets target allocation (as a percent) | 100.00% | |||||
Plan asset actual allocations (as a percent) | 100.00% | 100.00% | ||||
Future benefits payable for the retirement and post-retirement plans | ||||||
2,016 | $ 879,000 | |||||
2,017 | 636,000 | |||||
2,018 | 645,000 | |||||
2,019 | 670,000 | |||||
2,020 | 705,000 | |||||
Next five fiscal years to October 31, 2025 | 3,785,000 | |||||
Separation related activities | ||||||
Funded status at end of year | (1,639,000) | $ (1,777,000) | ||||
U.S. Defined Benefit Plans | Forecast | ||||||
Actual return on plan assets: | ||||||
Plan assets | 11,077,000 | |||||
Separation related activities | ||||||
Funded status at end of year | 1,632,000 | |||||
Projected benefit obligation | 12,709 | |||||
U.S. Defined Benefit Plans | Fair Value Measured Using Level 3 | ||||||
Changes in fair value measurements of Level 3 investments | ||||||
Fair value - beginning of year | 1,557,000 | $ 1,557,000 | 1,365,000 | |||
Actual return on plan assets: | ||||||
Relating to assets still held at the reporting date | (28,000) | 103,000 | ||||
Relating to assets sold during the period | 144,000 | 169,000 | ||||
Purchases, sales, and settlements (net) | (212,000) | (80,000) | ||||
Plan assets | 1,557,000 | $ 1,557,000 | 1,365,000 | $ 1,461,000 | $ 1,557,000 | |
U.S. Defined Benefit Plans | Marketable equity securities | ||||||
Actual return on plan assets: | ||||||
Plan assets target allocation (as a percent) | 53.50% | |||||
Plan asset actual allocations (as a percent) | 48.90% | 47.70% | ||||
U.S. Defined Benefit Plans | U.S, equity securities | ||||||
Changes in fair value measurements of Level 3 investments | ||||||
Fair value - beginning of year | 1,787,000 | $ 1,787,000 | ||||
Actual return on plan assets: | ||||||
Plan assets | 1,787,000 | 1,787,000 | $ 1,880,000 | $ 1,787,000 | ||
U.S. Defined Benefit Plans | Non-U.S, equity securities | ||||||
Changes in fair value measurements of Level 3 investments | ||||||
Fair value - beginning of year | 1,268,000 | 1,268,000 | ||||
Actual return on plan assets: | ||||||
Plan assets | 1,268,000 | $ 1,268,000 | $ 1,335,000 | $ 1,268,000 | ||
U.S. Defined Benefit Plans | Debt securities: | ||||||
Actual return on plan assets: | ||||||
Plan assets target allocation (as a percent) | 46.10% | |||||
Plan asset actual allocations (as a percent) | 47.50% | 49.20% | ||||
U.S. Defined Benefit Plans | Corporate debt securities | ||||||
Changes in fair value measurements of Level 3 investments | ||||||
Fair value - beginning of year | 3,290,000 | $ 3,290,000 | ||||
Actual return on plan assets: | ||||||
Plan assets | 3,290,000 | 3,290,000 | $ 3,269,000 | $ 3,290,000 | ||
U.S. Defined Benefit Plans | Corporate debt securities | Fair Value Measured Using Level 3 | ||||||
Changes in fair value measurements of Level 3 investments | ||||||
Fair value - beginning of year | 7,000 | 7,000 | ||||
Actual return on plan assets: | ||||||
Purchases, sales, and settlements (net) | 24,000 | 7,000 | ||||
Plan assets | 7,000 | 7,000 | 31,000 | 7,000 | ||
U.S. Defined Benefit Plans | Government debt securities | ||||||
Changes in fair value measurements of Level 3 investments | ||||||
Fair value - beginning of year | 2,204,000 | 2,204,000 | ||||
Actual return on plan assets: | ||||||
Plan assets | 2,204,000 | 2,204,000 | 1,756,000 | 2,204,000 | ||
U.S. Defined Benefit Plans | Private Equity, Alternative Investments | ||||||
Changes in fair value measurements of Level 3 investments | ||||||
Fair value - beginning of year | 1,284,000 | 1,284,000 | ||||
Actual return on plan assets: | ||||||
Plan assets | 1,284,000 | 1,284,000 | $ 1,170,000 | $ 1,284,000 | ||
Plan asset actual allocations (as a percent) | 16.40% | 15.80% | ||||
U.S. Defined Benefit Plans | Private Equity, Alternative Investments | Fair Value Measured Using Level 3 | ||||||
Changes in fair value measurements of Level 3 investments | ||||||
Fair value - beginning of year | 1,284,000 | 1,284,000 | 1,250,000 | |||
Actual return on plan assets: | ||||||
Relating to assets still held at the reporting date | (25,000) | 92,000 | ||||
Relating to assets sold during the period | 145,000 | 169,000 | ||||
Purchases, sales, and settlements (net) | (234,000) | (227,000) | ||||
Plan assets | 1,284,000 | 1,284,000 | 1,250,000 | $ 1,170,000 | $ 1,284,000 | |
U.S. Defined Benefit Plans | Hybrids, Alternative Investments | ||||||
Changes in fair value measurements of Level 3 investments | ||||||
Fair value - beginning of year | 3,000 | 3,000 | ||||
Actual return on plan assets: | ||||||
Plan assets | 3,000 | 3,000 | 3,000 | |||
U.S. Defined Benefit Plans | Hybrids, Alternative Investments | Fair Value Measured Using Level 3 | ||||||
Changes in fair value measurements of Level 3 investments | ||||||
Fair value - beginning of year | 3,000 | 3,000 | 2,000 | |||
Actual return on plan assets: | ||||||
Relating to assets still held at the reporting date | 1,000 | |||||
Relating to assets sold during the period | (1,000) | |||||
Purchases, sales, and settlements (net) | (2,000) | |||||
Plan assets | 3,000 | 3,000 | 2,000 | 3,000 | ||
U.S. Defined Benefit Plans | Hedge Funds, Alternative Investments | ||||||
Changes in fair value measurements of Level 3 investments | ||||||
Fair value - beginning of year | 609,000 | 609,000 | ||||
Actual return on plan assets: | ||||||
Plan assets | 609,000 | 609,000 | 648,000 | 609,000 | ||
U.S. Defined Benefit Plans | Hedge Funds, Alternative Investments | Fair Value Measured Using Level 3 | ||||||
Changes in fair value measurements of Level 3 investments | ||||||
Fair value - beginning of year | 263,000 | 263,000 | 113,000 | |||
Actual return on plan assets: | ||||||
Relating to assets still held at the reporting date | (3,000) | 10,000 | ||||
Purchases, sales, and settlements (net) | 140,000 | |||||
Plan assets | 263,000 | 263,000 | 113,000 | $ 260,000 | $ 263,000 | |
U.S. Defined Benefit Plans | Equity securities in public companies | ||||||
Actual return on plan assets: | ||||||
Plan asset actual allocations (as a percent) | 34.20% | 31.30% | ||||
U.S. Defined Benefit Plans | Real Estate Funds | ||||||
Actual return on plan assets: | ||||||
Plan asset actual allocations (as a percent) | (1.70%) | 0.60% | ||||
U.S. Defined Benefit Plans | Cash and Cash Equivalents | ||||||
Changes in fair value measurements of Level 3 investments | ||||||
Fair value - beginning of year | 227,000 | 227,000 | ||||
Actual return on plan assets: | ||||||
Plan assets | 227,000 | $ 227,000 | $ 241,000 | $ 227,000 | ||
Plan assets target allocation (as a percent) | 0.40% | |||||
Plan asset actual allocations (as a percent) | 3.60% | 3.10% | ||||
U.S. Defined Benefit Plans | Other | ||||||
Changes in fair value measurements of Level 3 investments | ||||||
Fair value - beginning of year | 71,000 | $ 71,000 | ||||
Actual return on plan assets: | ||||||
Plan assets | 71,000 | 71,000 | $ (192,000) | $ 71,000 | ||
U.S. non-qualified plan participants | ||||||
Future Contributions and Funding Policy | ||||||
Expected contribution to defined benefit plans in fiscal 2016 | 36,000 | 37,000 | ||||
Non-U.S. Defined Benefit Plans | ||||||
Changes in fair value measurements of Level 3 investments | ||||||
Fair value - beginning of year | 17,570,000 | 17,570,000 | 16,083,000 | |||
Actual return on plan assets: | ||||||
Plan assets | 17,570,000 | $ 17,570,000 | 16,083,000 | $ 17,477,000 | $ 17,570,000 | |
Plan assets target allocation (as a percent) | 100.00% | |||||
Plan asset actual allocations (as a percent) | 100.00% | 100.00% | ||||
Future Contributions and Funding Policy | ||||||
Expected contribution to defined benefit plans in fiscal 2016 | 18,000 | $ 384,000 | ||||
Future benefits payable for the retirement and post-retirement plans | ||||||
2,016 | $ 22,000 | |||||
2,017 | 24,000 | |||||
2,018 | 26,000 | |||||
2,019 | 28,000 | |||||
2,020 | 29,000 | |||||
Next five fiscal years to October 31, 2025 | 188,000 | |||||
Separation related activities | ||||||
Funded status at end of year | (3,044,000) | $ (3,650,000) | ||||
Non-U.S. Defined Benefit Plans | Fair Value Measured Using Level 3 | ||||||
Changes in fair value measurements of Level 3 investments | ||||||
Fair value - beginning of year | 1,083,000 | 1,083,000 | 737,000 | |||
Actual return on plan assets: | ||||||
Relating to assets still held at the reporting date | (9,000) | 57,000 | ||||
Relating to assets sold during the period | (15,000) | 1,000 | ||||
Purchases, sales, and settlements (net) | 73,000 | 216,000 | ||||
Transfers in and/or out of Level 3 | (13,000) | 72,000 | ||||
Plan assets | 1,083,000 | $ 1,083,000 | 737,000 | $ 1,119,000 | $ 1,083,000 | |
Non-U.S. Defined Benefit Plans | Marketable equity securities | ||||||
Actual return on plan assets: | ||||||
Plan assets target allocation (as a percent) | 66.40% | |||||
Plan asset actual allocations (as a percent) | 68.50% | 69.10% | ||||
Non-U.S. Defined Benefit Plans | U.S, equity securities | ||||||
Changes in fair value measurements of Level 3 investments | ||||||
Fair value - beginning of year | 2,965,000 | $ 2,965,000 | ||||
Actual return on plan assets: | ||||||
Plan assets | 2,965,000 | 2,965,000 | $ 2,927,000 | $ 2,965,000 | ||
Non-U.S. Defined Benefit Plans | Non-U.S, equity securities | ||||||
Changes in fair value measurements of Level 3 investments | ||||||
Fair value - beginning of year | 4,872,000 | 4,872,000 | ||||
Actual return on plan assets: | ||||||
Plan assets | 4,872,000 | 4,872,000 | 4,662,000 | 4,872,000 | ||
Non-U.S. Defined Benefit Plans | Non-U.S, equity securities | Fair Value Measured Using Level 3 | ||||||
Changes in fair value measurements of Level 3 investments | ||||||
Fair value - beginning of year | 80,000 | 80,000 | 77,000 | |||
Actual return on plan assets: | ||||||
Relating to assets still held at the reporting date | (18,000) | 3,000 | ||||
Transfers in and/or out of Level 3 | 21,000 | |||||
Plan assets | 80,000 | $ 80,000 | 77,000 | $ 83,000 | $ 80,000 | |
Non-U.S. Defined Benefit Plans | Debt securities: | ||||||
Actual return on plan assets: | ||||||
Plan assets target allocation (as a percent) | 33.40% | |||||
Plan asset actual allocations (as a percent) | 28.70% | 27.60% | ||||
Non-U.S. Defined Benefit Plans | Corporate debt securities | ||||||
Changes in fair value measurements of Level 3 investments | ||||||
Fair value - beginning of year | 2,935,000 | $ 2,935,000 | ||||
Actual return on plan assets: | ||||||
Plan assets | 2,935,000 | 2,935,000 | $ 3,352,000 | $ 2,935,000 | ||
Non-U.S. Defined Benefit Plans | Government debt securities | ||||||
Changes in fair value measurements of Level 3 investments | ||||||
Fair value - beginning of year | 1,787,000 | 1,787,000 | ||||
Actual return on plan assets: | ||||||
Plan assets | 1,787,000 | 1,787,000 | 1,534,000 | 1,787,000 | ||
Non-U.S. Defined Benefit Plans | Private Equity, Alternative Investments | ||||||
Changes in fair value measurements of Level 3 investments | ||||||
Fair value - beginning of year | 53,000 | 53,000 | ||||
Actual return on plan assets: | ||||||
Plan assets | 53,000 | 53,000 | $ 71,000 | $ 53,000 | ||
Plan asset actual allocations (as a percent) | 15.90% | 15.20% | ||||
Non-U.S. Defined Benefit Plans | Private Equity, Alternative Investments | Fair Value Measured Using Level 3 | ||||||
Changes in fair value measurements of Level 3 investments | ||||||
Fair value - beginning of year | 51,000 | 51,000 | 48,000 | |||
Actual return on plan assets: | ||||||
Relating to assets still held at the reporting date | (1,000) | 2,000 | ||||
Relating to assets sold during the period | 7,000 | 2,000 | ||||
Purchases, sales, and settlements (net) | 13,000 | (1,000) | ||||
Plan assets | 51,000 | 51,000 | 48,000 | $ 70,000 | $ 51,000 | |
Non-U.S. Defined Benefit Plans | Hybrids, Alternative Investments | ||||||
Changes in fair value measurements of Level 3 investments | ||||||
Fair value - beginning of year | 2,623,000 | 2,623,000 | ||||
Actual return on plan assets: | ||||||
Plan assets | 2,623,000 | 2,623,000 | 2,700,000 | 2,623,000 | ||
Non-U.S. Defined Benefit Plans | Hybrids, Alternative Investments | Fair Value Measured Using Level 3 | ||||||
Changes in fair value measurements of Level 3 investments | ||||||
Fair value - beginning of year | 43,000 | 43,000 | ||||
Actual return on plan assets: | ||||||
Relating to assets sold during the period | (22,000) | |||||
Purchases, sales, and settlements (net) | 43,000 | |||||
Transfers in and/or out of Level 3 | 9,000 | |||||
Plan assets | 43,000 | 43,000 | 30,000 | 43,000 | ||
Non-U.S. Defined Benefit Plans | Hedge Funds, Alternative Investments | ||||||
Changes in fair value measurements of Level 3 investments | ||||||
Fair value - beginning of year | 388,000 | 388,000 | ||||
Actual return on plan assets: | ||||||
Plan assets | 388,000 | 388,000 | 403,000 | 388,000 | ||
Non-U.S. Defined Benefit Plans | Hedge Funds, Alternative Investments | Fair Value Measured Using Level 3 | ||||||
Changes in fair value measurements of Level 3 investments | ||||||
Fair value - beginning of year | 285,000 | 285,000 | 204,000 | |||
Actual return on plan assets: | ||||||
Relating to assets still held at the reporting date | 14,000 | |||||
Relating to assets sold during the period | (1,000) | |||||
Purchases, sales, and settlements (net) | 48,000 | 68,000 | ||||
Transfers in and/or out of Level 3 | (83,000) | |||||
Plan assets | 285,000 | 285,000 | 204,000 | $ 250,000 | $ 285,000 | |
Non-U.S. Defined Benefit Plans | Equity securities in public companies | ||||||
Actual return on plan assets: | ||||||
Plan asset actual allocations (as a percent) | 45.70% | 46.80% | ||||
Non-U.S. Defined Benefit Plans | Real Estate Funds | ||||||
Changes in fair value measurements of Level 3 investments | ||||||
Fair value - beginning of year | 1,040,000 | 1,040,000 | ||||
Actual return on plan assets: | ||||||
Plan assets | 1,040,000 | 1,040,000 | $ 1,084,000 | $ 1,040,000 | ||
Plan asset actual allocations (as a percent) | 6.90% | 7.10% | ||||
Non-U.S. Defined Benefit Plans | Real Estate Funds | Fair Value Measured Using Level 3 | ||||||
Changes in fair value measurements of Level 3 investments | ||||||
Fair value - beginning of year | 543,000 | 543,000 | 325,000 | |||
Actual return on plan assets: | ||||||
Relating to assets still held at the reporting date | 13,000 | 46,000 | ||||
Purchases, sales, and settlements (net) | 14,000 | 108,000 | ||||
Transfers in and/or out of Level 3 | 1,000 | 64,000 | ||||
Plan assets | 543,000 | 543,000 | 325,000 | $ 571,000 | $ 543,000 | |
Non-U.S. Defined Benefit Plans | Insurance Group Annuity Contracts | ||||||
Changes in fair value measurements of Level 3 investments | ||||||
Fair value - beginning of year | 123,000 | 123,000 | ||||
Actual return on plan assets: | ||||||
Plan assets | 123,000 | 123,000 | 119,000 | 123,000 | ||
Non-U.S. Defined Benefit Plans | Insurance Group Annuity Contracts | Fair Value Measured Using Level 3 | ||||||
Changes in fair value measurements of Level 3 investments | ||||||
Fair value - beginning of year | 79,000 | 79,000 | 81,000 | |||
Actual return on plan assets: | ||||||
Relating to assets still held at the reporting date | (6,000) | (8,000) | ||||
Purchases, sales, and settlements (net) | (2,000) | (2,000) | ||||
Transfers in and/or out of Level 3 | 2,000 | 8,000 | ||||
Plan assets | 79,000 | 79,000 | 81,000 | 73,000 | 79,000 | |
Non-U.S. Defined Benefit Plans | Cash and Cash Equivalents | ||||||
Changes in fair value measurements of Level 3 investments | ||||||
Fair value - beginning of year | 573,000 | 573,000 | ||||
Actual return on plan assets: | ||||||
Plan assets | 573,000 | $ 573,000 | $ 493,000 | $ 573,000 | ||
Plan assets target allocation (as a percent) | 0.20% | |||||
Plan asset actual allocations (as a percent) | 2.80% | 3.30% | ||||
Non-U.S. Defined Benefit Plans | Other | ||||||
Changes in fair value measurements of Level 3 investments | ||||||
Fair value - beginning of year | 211,000 | $ 211,000 | ||||
Actual return on plan assets: | ||||||
Plan assets | 211,000 | 211,000 | $ 124,000 | $ 211,000 | ||
Non-U.S. Defined Benefit Plans | Other | Fair Value Measured Using Level 3 | ||||||
Changes in fair value measurements of Level 3 investments | ||||||
Fair value - beginning of year | 2,000 | 2,000 | 2,000 | |||
Actual return on plan assets: | ||||||
Relating to assets still held at the reporting date | 3,000 | |||||
Transfers in and/or out of Level 3 | 37,000 | |||||
Plan assets | 2,000 | 2,000 | 2,000 | 42,000 | 2,000 | |
Post-Retirement Benefit Plans | ||||||
Changes in fair value measurements of Level 3 investments | ||||||
Fair value - beginning of year | 458,000 | 458,000 | 396,000 | |||
Actual return on plan assets: | ||||||
Plan assets | 458,000 | $ 458,000 | 396,000 | $ 474,000 | $ 458,000 | |
Plan assets target allocation (as a percent) | 100.00% | |||||
Plan asset actual allocations (as a percent) | 100.00% | 100.00% | ||||
Future Contributions and Funding Policy | ||||||
Expected contribution to defined benefit plans in fiscal 2016 | 43,000 | $ 46,000 | ||||
Future benefits payable for the retirement and post-retirement plans | ||||||
2,016 | $ 82,000 | |||||
2,017 | 71,000 | |||||
2,018 | 58,000 | |||||
2,019 | 54,000 | |||||
2,020 | 51,000 | |||||
Next five fiscal years to October 31, 2025 | 197,000 | |||||
Separation related activities | ||||||
Funded status at end of year | (263,000) | $ (382,000) | ||||
Post-Retirement Benefit Plans | Forecast | ||||||
Actual return on plan assets: | ||||||
Plan assets | 434,000 | |||||
Separation related activities | ||||||
Funded status at end of year | 164,000 | |||||
Projected benefit obligation | $ 598,000 | |||||
Post-Retirement Benefit Plans | Fair Value Measured Using Level 3 | ||||||
Changes in fair value measurements of Level 3 investments | ||||||
Fair value - beginning of year | 272,000 | 272,000 | 235,000 | |||
Actual return on plan assets: | ||||||
Relating to assets still held at the reporting date | (2,000) | 51,000 | ||||
Relating to assets sold during the period | 46,000 | 21,000 | ||||
Purchases, sales, and settlements (net) | (63,000) | (35,000) | ||||
Plan assets | 272,000 | $ 272,000 | 235,000 | $ 253,000 | $ 272,000 | |
Post-Retirement Benefit Plans | Marketable equity securities | ||||||
Actual return on plan assets: | ||||||
Plan assets target allocation (as a percent) | 66.10% | |||||
Plan asset actual allocations (as a percent) | 62.30% | 68.80% | ||||
Post-Retirement Benefit Plans | U.S, equity securities | ||||||
Actual return on plan assets: | ||||||
Plan assets | $ 1,000 | |||||
Post-Retirement Benefit Plans | Debt securities: | ||||||
Actual return on plan assets: | ||||||
Plan assets target allocation (as a percent) | 32.00% | |||||
Plan asset actual allocations (as a percent) | 33.20% | 27.50% | ||||
Post-Retirement Benefit Plans | Corporate debt securities | ||||||
Changes in fair value measurements of Level 3 investments | ||||||
Fair value - beginning of year | 20,000 | $ 20,000 | ||||
Actual return on plan assets: | ||||||
Plan assets | 20,000 | 20,000 | $ 28,000 | $ 20,000 | ||
Post-Retirement Benefit Plans | Government debt securities | ||||||
Changes in fair value measurements of Level 3 investments | ||||||
Fair value - beginning of year | 22,000 | 22,000 | ||||
Actual return on plan assets: | ||||||
Plan assets | 22,000 | 22,000 | 39,000 | 22,000 | ||
Post-Retirement Benefit Plans | Private Equity, Alternative Investments | ||||||
Changes in fair value measurements of Level 3 investments | ||||||
Fair value - beginning of year | 271,000 | 271,000 | ||||
Actual return on plan assets: | ||||||
Plan assets | 271,000 | 271,000 | $ 253,000 | $ 271,000 | ||
Plan asset actual allocations (as a percent) | 53.40% | 58.60% | ||||
Post-Retirement Benefit Plans | Private Equity, Alternative Investments | Fair Value Measured Using Level 3 | ||||||
Changes in fair value measurements of Level 3 investments | ||||||
Fair value - beginning of year | 271,000 | 271,000 | 234,000 | |||
Actual return on plan assets: | ||||||
Relating to assets still held at the reporting date | (2,000) | 51,000 | ||||
Relating to assets sold during the period | 46,000 | 21,000 | ||||
Purchases, sales, and settlements (net) | (62,000) | (35,000) | ||||
Plan assets | 271,000 | 271,000 | 234,000 | $ 253,000 | $ 271,000 | |
Post-Retirement Benefit Plans | Hybrids, Alternative Investments | ||||||
Changes in fair value measurements of Level 3 investments | ||||||
Fair value - beginning of year | 1,000 | 1,000 | ||||
Actual return on plan assets: | ||||||
Plan assets | 1,000 | 1,000 | 1,000 | |||
Post-Retirement Benefit Plans | Hybrids, Alternative Investments | Fair Value Measured Using Level 3 | ||||||
Changes in fair value measurements of Level 3 investments | ||||||
Fair value - beginning of year | 1,000 | 1,000 | 1,000 | |||
Actual return on plan assets: | ||||||
Purchases, sales, and settlements (net) | (1,000) | |||||
Plan assets | 1,000 | 1,000 | $ 1,000 | $ 1,000 | ||
Post-Retirement Benefit Plans | Equity securities in public companies | ||||||
Actual return on plan assets: | ||||||
Plan asset actual allocations (as a percent) | 10.70% | 10.20% | ||||
Post-Retirement Benefit Plans | Real Estate Funds | ||||||
Actual return on plan assets: | ||||||
Plan asset actual allocations (as a percent) | (1.80%) | |||||
Post-Retirement Benefit Plans | Cash and Cash Equivalents | ||||||
Changes in fair value measurements of Level 3 investments | ||||||
Fair value - beginning of year | 6,000 | 6,000 | ||||
Actual return on plan assets: | ||||||
Plan assets | 6,000 | $ 6,000 | $ 7,000 | $ 6,000 | ||
Plan assets target allocation (as a percent) | 1.90% | |||||
Plan asset actual allocations (as a percent) | 4.50% | 3.70% | ||||
Post-Retirement Benefit Plans | Other | ||||||
Changes in fair value measurements of Level 3 investments | ||||||
Fair value - beginning of year | (4,000) | $ (4,000) | ||||
Actual return on plan assets: | ||||||
Plan assets | $ (4,000) | $ (4,000) | $ (8,000) | $ (4,000) |
Stock-Based Compensation (Detai
Stock-Based Compensation (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2013 | |
Stock-Based Compensation | |||
Stock-based compensation expense | $ 709,000 | $ 560,000 | $ 500,000 |
Income tax benefit | (208,000) | (179,000) | (158,000) |
Stock-based compensation expense, net of tax | 501,000 | 381,000 | 342,000 |
Expense due to the acceleration | 76,000 | ||
Benefit realized for the tax deduction from option exercises of share-based payment awards | $ 75,000 | $ 51,000 | 13,000 |
Employee Stock Purchase Plan | |||
Stock-Based Compensation | |||
Stock-based compensation expense, net of tax | $ 0 | ||
Restricted Stock Awards | |||
Shares | |||
Outstanding at beginning of period (in shares) | 40,808 | 32,262 | 25,532 |
Granted and assumed through acquisition (in shares) | 26,991 | 26,036 | 20,707 |
Vested (in shares) | (34,177) | (14,253) | (10,966) |
Forfeited (in shares) | (3,905) | (3,237) | (3,011) |
Outstanding at end of period (in shares) | 29,717 | 40,808 | 32,262 |
Weighted-Average Grant Date Fair Value Per Share | |||
Outstanding at beginning of period (in dollars per share) | $ 24 | $ 21 | $ 31 |
Granted (in dollars per share) | 35 | 28 | 15 |
Vested (in dollars per share) | 26 | 24 | 33 |
Forfeited (in dollars per share) | 29 | 22 | 24 |
Outstanding at end of period (in dollars per share) | $ 32 | $ 24 | $ 21 |
Total grant date fair value of restricted stock vested | $ 593,000 | $ 234,000 | $ 247,000 |
Unrecognized pre-tax stock-based compensation expense and recognition period | |||
Unrecognized pre-tax stock-based compensation expense | $ 652,000 | ||
Remaining weighted-average vesting period over which pre-tax stock-based compensation expense is expected to be recognized | 1 year 6 months | ||
Stock Options | |||
Unrecognized pre-tax stock-based compensation expense and recognition period | |||
Unrecognized pre-tax stock-based compensation expense | $ 46,000 | ||
Remaining weighted-average vesting period over which pre-tax stock-based compensation expense is expected to be recognized | 1 year 10 months 24 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) | $ 8 | $ 7 | $ 4 |
Expected volatility (as a percent) | 26.80% | 33.10% | 41.70% |
Risk-free interest rate (as a percent) | 1.70% | 1.80% | 1.10% |
Expected dividend yield (as a percent) | 1.80% | 2.10% | 3.60% |
Expected term in years | 5 years 10 months 24 days | 5 years 8 months 12 days | 5 years 10 months 24 days |
Total grant date fair value of options vested | $ 59,000 | $ 53,000 | $ 64,000 |
Shares | |||
Outstanding at beginning of period (in shares) | 57,853 | 84,042 | 87,296 |
Granted and assumed through acquisitions (in shares) | 9,086 | 9,575 | 25,785 |
Exercised (in shares) | (12,845) | (11,145) | (10,063) |
Forfeited/cancelled/expired (in shares) | (17,816) | (24,619) | (18,976) |
Outstanding at end of period (in shares) | 36,278 | 57,853 | 84,042 |
Vested and expected to vest at end of period (in shares) | 34,973 | 54,166 | 80,004 |
Exercisable at end of period (in shares) | 25,630 | 30,459 | 49,825 |
Weighted-Average Exercise Price | |||
Outstanding at beginning of period (in dollars per share) | $ 27 | $ 27 | $ 29 |
Granted and assumed through acquisition (in dollars per share) | 36 | 28 | 15 |
Exercised (in dollars per share) | 19 | 18 | 19 |
Forfeited/cancelled/expired (in dollars per share) | 40 | 31 | 25 |
Outstanding at end of period (in dollars per share) | 26 | 27 | 27 |
Vested and expected to vest at end of period (in dollars per share) | 26 | 27 | 27 |
Exercisable at end of period (in dollars per share) | $ 24 | $ 33 | $ 33 |
Weighted-Average Remaining Contractual Term | |||
Outstanding at end of period | 5 years 1 month 6 days | 4 years 3 months 18 days | 3 years 10 months 24 days |
Vested and expected to vest at end of period | 5 years | 4 years 1 month 6 days | 3 years 8 months 12 days |
Exercisable at end of period | 4 years 4 months 24 days | 2 years 3 months 18 days | 1 year 9 months 18 days |
Aggregate Intrinsic Value | |||
Outstanding at end of period | $ 153,000 | $ 629,000 | $ 303,000 |
Vested and expected to vest at end of period | 152,000 | 571,000 | 274,000 |
Exercisable at end of period | 146,000 | 197,000 | 58,000 |
Options exercised | $ 214,000 | $ 151,000 | $ 36,000 |
Stock Options | Minimum | |||
Stock-Based Compensation | |||
Vesting period | 3 years | ||
Stock Options | Maximum | |||
Stock-Based Compensation | |||
Vesting period | 4 years | ||
Cash-settled awards and restricted stock awards | Minimum | |||
Stock-Based Compensation | |||
Vesting period | 1 year | ||
Cash-settled awards and restricted stock awards | Maximum | |||
Stock-Based Compensation | |||
Vesting period | 3 years |
Stock-Based Compensation (Det58
Stock-Based Compensation (Detail 2) - Stock Options shares in Thousands | 12 Months Ended |
Oct. 31, 2015$ / sharesshares | |
Information about options outstanding, by exercise price range | |
Options Outstanding - Shares Outstanding | shares | 36,278 |
Options Outstanding - Weighted Average Remaining Contractual Term | 5 years 1 month 6 days |
Options Outstanding - Weighted Average Exercise Price (in dollars per share) | $ 26 |
Options Exercisable - Shares Exercisable | shares | 25,630 |
Options Exercisable - Weighted-Average Exercise Price (in dollars per share) | $ 24 |
$0-$9.99 | |
Information about options outstanding, by exercise price range | |
Exercise price range, lower range limit (in dollars per share) | 0 |
Exercise price range, upper range limit (in dollars per share) | $ 9.99 |
Options Outstanding - Shares Outstanding | shares | 221 |
Options Outstanding - Weighted Average Remaining Contractual Term | 3 years 10 months 24 days |
Options Outstanding - Weighted Average Exercise Price (in dollars per share) | $ 6 |
Options Exercisable - Shares Exercisable | shares | 205 |
Options Exercisable - Weighted-Average Exercise Price (in dollars per share) | $ 7 |
$10-$19.99 | |
Information about options outstanding, by exercise price range | |
Exercise price range, lower range limit (in dollars per share) | 10 |
Exercise price range, upper range limit (in dollars per share) | $ 19.99 |
Options Outstanding - Shares Outstanding | shares | 9,863 |
Options Outstanding - Weighted Average Remaining Contractual Term | 4 years 6 months |
Options Outstanding - Weighted Average Exercise Price (in dollars per share) | $ 14 |
Options Exercisable - Shares Exercisable | shares | 9,398 |
Options Exercisable - Weighted-Average Exercise Price (in dollars per share) | $ 14 |
$20-$29.99 | |
Information about options outstanding, by exercise price range | |
Exercise price range, lower range limit (in dollars per share) | 20 |
Exercise price range, upper range limit (in dollars per share) | $ 29.99 |
Options Outstanding - Shares Outstanding | shares | 15,775 |
Options Outstanding - Weighted Average Remaining Contractual Term | 4 years 10 months 24 days |
Options Outstanding - Weighted Average Exercise Price (in dollars per share) | $ 26 |
Options Exercisable - Shares Exercisable | shares | 11,635 |
Options Exercisable - Weighted-Average Exercise Price (in dollars per share) | $ 25 |
$30-$39.99 | |
Information about options outstanding, by exercise price range | |
Exercise price range, lower range limit (in dollars per share) | 30 |
Exercise price range, upper range limit (in dollars per share) | $ 39.99 |
Options Outstanding - Shares Outstanding | shares | 8,858 |
Options Outstanding - Weighted Average Remaining Contractual Term | 6 years 8 months 12 days |
Options Outstanding - Weighted Average Exercise Price (in dollars per share) | $ 37 |
Options Exercisable - Shares Exercisable | shares | 2,831 |
Options Exercisable - Weighted-Average Exercise Price (in dollars per share) | $ 37 |
$40-$49.99 | |
Information about options outstanding, by exercise price range | |
Exercise price range, lower range limit (in dollars per share) | 40 |
Exercise price range, upper range limit (in dollars per share) | $ 49.99 |
Options Outstanding - Shares Outstanding | shares | 1,322 |
Options Outstanding - Weighted Average Remaining Contractual Term | 1 year 3 months 18 days |
Options Outstanding - Weighted Average Exercise Price (in dollars per share) | $ 45 |
Options Exercisable - Shares Exercisable | shares | 1,322 |
Options Exercisable - Weighted-Average Exercise Price (in dollars per share) | $ 45 |
$50 - 59.99 | |
Information about options outstanding, by exercise price range | |
Exercise price range, lower range limit (in dollars per share) | 50 |
Exercise price range, upper range limit (in dollars per share) | $ 59.99 |
Options Outstanding - Shares Outstanding | shares | 239 |
Options Outstanding - Weighted Average Remaining Contractual Term | 2 years 3 months 18 days |
Options Outstanding - Weighted Average Exercise Price (in dollars per share) | $ 52 |
Options Exercisable - Shares Exercisable | shares | 239 |
Options Exercisable - Weighted-Average Exercise Price (in dollars per share) | $ 52 |
Stock-Based Compensation (Det59
Stock-Based Compensation (Details 3) - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2013 | |
Share-based compensation | |||
Stock-based compensation expense, net of tax | $ 501,000 | $ 381,000 | $ 342,000 |
Shares reserved | |||
Shares available for future grant at the end of the period | 215,949 | 246,852 | 300,984 |
Shares reserved for future issuance under all stock-related benefit plans at the end of the period | 276,481 | 344,848 | 417,642 |
Employee Stock Purchase Plan | |||
Share-based compensation | |||
Maximum contribution limit as percentage of base compensation (as a percent) | 10.00% | ||
Stock purchase price as a percentage of the fair market value on the purchase date | 95.00% | ||
Stock-based compensation expense, net of tax | $ 0 |
Taxes on Earnings (Details)
Taxes on Earnings (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2013 | |
Domestic and foreign components of earnings (loss) before taxes | |||
U.S. | $ 373 | $ 2,565 | $ 2,618 |
Non-U.S. | 4,359 | 3,992 | 3,892 |
Earnings before taxes | 4,732 | 6,557 | 6,510 |
U.S. federal taxes: | |||
Current | (324) | 381 | 475 |
Deferred | (1,237) | 210 | (666) |
Non-U.S. taxes: | |||
Current | 993 | 984 | 1,275 |
Deferred | 678 | (42) | 89 |
State taxes: | |||
Current | 210 | 212 | 57 |
Deferred | (142) | (201) | 167 |
Provision for (benefit from) taxes on earnings | $ 178 | $ 1,544 | $ 1,397 |
Taxes on Earnings (Detail 2)
Taxes on Earnings (Detail 2) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2013 | |
Differences between the U.S. federal statutory income tax rate and HP's effective tax rate | |||
U.S. federal statutory income tax rate (as a percent) | 35.00% | 35.00% | 35.00% |
State income taxes, net of federal tax benefit (as a percent) | (4.60%) | 0.40% | 0.10% |
Lower rates in other jurisdictions, net (as a percent) | (16.20%) | (12.90%) | (24.50%) |
Valuation allowance (as a percent) | (23.40%) | 1.70% | 3.80% |
Uncertain tax positions | 10.10% | (2.30%) | 4.10% |
Other, net (as a percent) | 2.90% | 1.60% | 3.00% |
Effective tax rate (as a percent) | 3.80% | 23.50% | 21.50% |
Net tax charges (benefits) related to change in valuation allowance on deferred tax assets | $ 214 | ||
Net tax benefits on on restructuring, separation-related, and other charges | $ 639 | ||
Tax charges for adjustments to uncertain tax positions and the settlement of tax audit matters | 394 | ||
Tax charges related to pension transfers | 449 | ||
Tax charges for various provision to return adjustments and other adjustments | 3 | ||
Tax benefit arising from the retroactive research and development credit | 47 | ||
Domestic Tax Authority [Member] | |||
Differences between the U.S. federal statutory income tax rate and HP's effective tax rate | |||
Net tax charges (benefits) related to change in valuation allowance on deferred tax assets | (1,800) | ||
Foreign | |||
Differences between the U.S. federal statutory income tax rate and HP's effective tax rate | |||
Net tax charges (benefits) related to change in valuation allowance on deferred tax assets | $ 486 |
Taxes on Earnings (Detail 3)
Taxes on Earnings (Detail 3) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2013 | |
Taxes on Earnings | |||
Income tax charge to record valuation allowances | $ 214 | ||
Income tax charge (benefits) for adjustments to prior year foreign income tax accruals, settlement of tax audit matters, and miscellaneous other items | 146 | ||
Income tax charges for adjustments to uncertain tax positions and the settlement of tax audit matters | 406 | ||
Tax benefit from the retroactive research and development credit | 50 | ||
Tax expense (benefit) associated with miscellaneous prior period items | 47 | ||
Income tax (benefit) charges related to items unique to the year | $ (1,600) | $ 53 | 471 |
Income tax benefits, reduced rates for subsidiaries in certain countries | $ 581 | $ 1,200 | $ 827 |
Income tax benefits, reduced rates for subsidiaries in certain countries (in dollars per share) | $ 0.32 | $ 0.61 | $ 0.42 |
Taxes on Earnings (Detail 4)
Taxes on Earnings (Detail 4) $ in Millions | 12 Months Ended | 14 Months Ended | 46 Months Ended | ||
Oct. 31, 2015USD ($)item | Oct. 31, 2014USD ($) | Oct. 31, 2013USD ($) | Oct. 31, 2009USD ($) | Aug. 26, 2008USD ($) | |
Reconciliation of unrecognized tax benefits | |||||
Balance at beginning of year | $ 4,128 | $ 3,484 | $ 2,573 | ||
Increases: | |||||
For current year's tax positions | 1,942 | 304 | 290 | ||
For prior years' tax positions | 4,673 | 593 | 997 | ||
Decreases: | |||||
For prior years' tax positions | (655) | (125) | (146) | ||
Statute of limitations expirations | (21) | (46) | (11) | ||
Settlements with taxing authorities | (90) | (82) | (219) | ||
Balance at end of year | 9,977 | 4,128 | 3,484 | ||
Unrecognized tax benefits that would affect effective tax rate if realized | 3,000 | 2,200 | $ 1,900 | ||
Increase in unrecognized tax benefit related to the timing of intercompany royalty income recognition | 5,800 | ||||
Accrued income tax for interest and penalties | $ 357 | $ 254 | |||
Likelihood of no resolution period | 12 months | ||||
Likelihood of conclusion period for certain federal, foreign and state tax issues | 12 months | ||||
Reasonably possible decrease in existing unrecognized tax benefits within the next 12 months | $ 144 | ||||
Number of other countries in which HP is subject to income taxes | item | 105 | ||||
Income tax examination, reduction in tax benefits | $ 445 | ||||
Income tax examination, additional tax payable | $ 62 | $ 274 | |||
Income tax examination, proposed assessment amount | 733 | ||||
Undistributed earnings from non-U.S. operations | $ 47,200 |
Taxes on Earnings (Detail 5)
Taxes on Earnings (Detail 5) - USD ($) $ in Millions | Oct. 31, 2015 | Oct. 31, 2014 |
Deferred Tax Assets | ||
Loss carryforwards | $ 8,749 | $ 9,476 |
Credit carryforwards | 453 | 2,377 |
Inventory valuation | 120 | 152 |
Intercompany transactions - profit in inventory | 147 | 136 |
Intercompany transactions - excluding inventory | 6,952 | 4,403 |
Fixed assets | 377 | 383 |
Warranty | 549 | 616 |
Employee and retiree benefits | 1,872 | 2,790 |
Accounts receivable allowance | 136 | 107 |
Intangible assets | 74 | 212 |
Restructuring | 239 | 354 |
Deferred revenue | 1,235 | 1,143 |
Other | 2,215 | 1,573 |
Gross deferred tax assets | 23,118 | 23,722 |
Valuation allowances | (9,878) | (11,915) |
Net deferred tax assets | 13,240 | 11,807 |
Deferred Tax Liabilities | ||
Unremitted earnings of foreign subsidiaries | 8,450 | 7,828 |
Inventory valuation | 7 | 8 |
Fixed assets | 64 | 74 |
Employee and retiree benefits | 31 | 57 |
Accounts receivable allowance | 1 | 1 |
Intangible assets | 546 | 596 |
Deferred revenue | 5 | 12 |
Other | 1,486 | 1,145 |
Gross deferred tax liabilities | 10,590 | 9,721 |
Net deferred tax liabilities | $ 10,590 | $ 9,721 |
Taxes on Earning (Details 6)
Taxes on Earning (Details 6) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Jan. 31, 2015USD ($) | Oct. 31, 2015USD ($)item | Oct. 31, 2014USD ($) | Oct. 31, 2013USD ($) | |
Current and long term deferred tax assets and liabilities | ||||
Current deferred tax assets | $ 2,242 | $ 2,754 | ||
Current deferred tax liabilities | (168) | (284) | ||
Long-term deferred tax assets | 871 | 740 | ||
Long-term deferred tax liabilities | (295) | (1,124) | ||
Net deferred tax assets net of deferred tax liabilities | 2,650 | 2,086 | ||
Tax benefit (deficiency) from employee stock plans | 64 | (43) | $ (149) | |
Recognition of net deferred tax assets from intercompany licensing arrangement | $ 0 | 1,700 | ||
Advance royalty proceeds received from multi-year intercompany licensing arrangements | $ 8,800 | $ 11,500 | ||
Royalty recognition term | 5 years | 15 years | ||
Number of independent publicly-traded companies | item | 2 | |||
Federal | ||||
Operating loss carryforwards | ||||
Operating loss carryforwards | $ 971 | |||
State | ||||
Operating loss carryforwards | ||||
Operating loss carryforwards | 6,100 | |||
Foreign | ||||
Operating loss carryforwards | ||||
Operating loss carryforwards | $ 26,800 |
Taxes on Earnings (Detail 7)
Taxes on Earnings (Detail 7) - USD ($) $ in Millions | Oct. 31, 2015 | Oct. 31, 2014 |
Taxes on Earnings | ||
Capital loss carryforwards | $ 26 | |
Valuation allowance | ||
Valuation allowance for deferred tax assets | 9,878 | $ 11,915 |
Operating loss carryforwards. | Federal and state | ||
Valuation allowance | ||
Valuation allowance for deferred tax assets | 106 | |
Operating loss carryforwards. | Foreign | ||
Valuation allowance | ||
Valuation allowance for deferred tax assets | $ 8,200 |
Taxes on Earnings (Detail 8)
Taxes on Earnings (Detail 8) - USD ($) $ in Millions | 12 Months Ended | |||
Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2013 | Nov. 01, 2015 | |
Carryforward | ||||
U.S. foreign tax credits | $ 46 | |||
U.S. R&D and other credits | 47 | |||
Tax credits in state and foreign jurisdictions | 360 | |||
Deferred tax assets for various tax credit carryforwards | 453 | $ 2,377 | ||
Valuation Allowance | ||||
Tax credits in state and foreign jurisdictions | (223) | |||
Balance at end of year | (223) | |||
Valuation allowance balance | ||||
Balance at beginning of year | 11,915 | |||
Income tax (benefit) expense | 178 | 1,544 | $ 1,397 | |
Balance at end of year | 9,878 | 11,915 | ||
Net payable for certain tax liabilities indemnified under Tax Matters Agreement | $ 390 | |||
Increase (decrease) in valuation allowances | (2,000) | 525 | ||
Deferred tax asset valuation allowance | ||||
Valuation allowance balance | ||||
Balance at beginning of year | 11,915 | 11,390 | 10,223 | |
Income tax (benefit) expense | (1,657) | 184 | 1,644 | |
Other comprehensive income, currency translation and charges to other accounts | (380) | 341 | (477) | |
Balance at end of year | $ 9,878 | $ 11,915 | $ 11,390 |
Balance Sheet Details (Detail)
Balance Sheet Details (Detail) - USD ($) $ in Millions | 12 Months Ended | ||||
Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2013 | Oct. 31, 2015 | Oct. 31, 2014 | |
Accounts Receivable, Net | |||||
Accounts receivable, gross | $ 13,552 | $ 14,064 | |||
Allowance for doubtful accounts | $ (232) | $ (332) | $ (464) | (189) | (232) |
Accounts receivable, net | 13,363 | 13,832 | |||
Allowance for doubtful accounts receivable | |||||
Balance at beginning of period | 232 | 332 | 464 | ||
Provision for doubtful accounts | 46 | 25 | 23 | ||
Deductions, net of recoveries | (89) | (125) | (155) | ||
Balance at end of period | 189 | 232 | 332 | ||
Trade receivables sold and cash received | |||||
Balance at beginning of period | 459 | 172 | 228 | ||
Trade receivables sold | 10,733 | 9,627 | 4,241 | ||
Cash receipts | (10,998) | (9,306) | (4,305) | ||
Foreign currency and other | (33) | (34) | 8 | ||
Balance at end of period | 161 | 459 | 172 | ||
Non-recourse arrangements: | |||||
Maximum program capacity | 1,427 | 1,083 | |||
Utilized capacity | (568) | (613) | |||
Available capacity | 859 | 470 | |||
Partial-recourse arrangements: | |||||
Maximum program capacity | 1,860 | 1,877 | |||
Utilized capacity | (1,381) | (1,500) | |||
Available capacity | 479 | 377 | |||
Total arrangements: | |||||
Maximum program capacity | 3,287 | 2,960 | |||
Utilized capacity | (1,949) | (2,113) | |||
Available capacity | 1,338 | 847 | |||
Amounts due from third parties for transferred trade receivables | |||||
Non recourse arrangements | 21 | 78 | |||
Partial-recourse arrangements | 140 | 381 | |||
Total arrangements | $ 459 | $ 172 | $ 228 | 161 | 459 |
Inventory | |||||
Finished goods | 4,337 | 3,973 | |||
Purchased parts and fabricated assemblies | 2,148 | 2,442 | |||
Inventory, net | 6,485 | 6,415 | |||
Other Current Assets | |||||
Deferred tax assets - short-term | 2,242 | 2,754 | |||
Value-added taxes receivable | 2,481 | 2,169 | |||
Supplier and other receivables | 2,749 | 2,378 | |||
Prepaid and other current assets | 4,116 | 4,518 | |||
Other current assets, total | 11,588 | 11,819 | |||
Long-Term Financing Receivables and Other Assets | |||||
Financing receivables, net | 3,676 | 3,613 | |||
Deferred tax assets | 871 | 740 | |||
Deferred costs | 742 | 755 | |||
Other | 3,761 | 3,346 | |||
Long-Term Financing Receivables and Other Assets, total | 9,050 | 8,454 | |||
Other Accrued Liabilities | |||||
Accrued taxes- other | 2,371 | 2,269 | |||
Warranty | 1,147 | 1,325 | |||
Sales and marketing programs | 3,089 | 2,986 | |||
Other | 5,417 | 5,499 | |||
Other Accrued Liabilities, total | 12,024 | 12,079 | |||
Other Liabilities | |||||
Pension, post-retirement, and post-employment liabilities | 5,630 | 6,379 | |||
Deferred revenue-long term | 4,373 | 3,931 | |||
Deferred tax liability - long-term | 295 | 1,124 | |||
Tax liability- long-term | 2,593 | 2,861 | |||
Other long-term liabilities | 1,869 | 2,010 | |||
Other Liabilities, total | $ 14,760 | $ 16,305 |
Balance Sheet Details (Detail 2
Balance Sheet Details (Detail 2) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2013 | |
Property, Plant and Equipment, Net | |||
Property, plant and equipment, gross | $ 26,475 | $ 26,252 | |
Accumulated depreciation | (15,385) | (14,912) | |
Property, plant and equipment, net | 11,090 | 11,340 | |
Depreciation expense | 3,100 | 3,300 | $ 3,200 |
Purchase of property, plant and equipment | 3,700 | ||
Sale and retirement of gross Property, Plant and Equipment | 2,900 | ||
Unfavorable currency impacts on gross property plant and equipment | 500 | ||
Accumulated depreciation on sale and retirement of property, plant and equipment | 2,500 | ||
Land | |||
Property, Plant and Equipment, Net | |||
Property, plant and equipment, gross | 537 | 540 | |
Buildings and leasehold improvements | |||
Property, Plant and Equipment, Net | |||
Property, plant and equipment, gross | 9,172 | 9,048 | |
Machinery and equipment, including equipment held for lease | |||
Property, Plant and Equipment, Net | |||
Property, plant and equipment, gross | $ 16,766 | $ 16,664 |
Financing Receivables and Ope70
Financing Receivables and Operating Leases (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2013 | Oct. 31, 2012 | |
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 | $ 7,000 | $ 6,982 | ||
Unguaranteed residual value | 217 | 235 | ||
Unearned income | (528) | (547) | ||
Financing receivables, gross | 6,689 | 6,670 | ||
Allowance for doubtful accounts | (95) | (111) | $ (131) | $ (149) |
Financing receivables, net | 6,594 | 6,559 | ||
Less: current portion | (2,918) | (2,946) | ||
Amounts due after one year, net | 3,676 | 3,613 | ||
Scheduled maturities of minimum lease payments receivable: | ||||
2,016 | 3,176 | |||
2,017 | 1,922 | |||
2,018 | 1,144 | |||
2,019 | 526 | |||
2,020 | 194 | |||
Thereafter | 38 | |||
Total | $ 7,000 | $ 6,982 |
Financing Receivables and Ope71
Financing Receivables and Operating Leases (Detail 2) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2013 | |
Gross financing receivables | |||
Net Investment | $ 6,689 | $ 6,670 | |
Period past due, after which a write-off or specific reserve is created | 180 days | ||
Allowance for doubtful accounts | |||
Balance at beginning of period | $ 111 | 131 | $ 149 |
Provision for doubtful accounts | 25 | 30 | 38 |
Deductions, net of recoveries | (41) | (50) | (56) |
Balance at end of period | 95 | 111 | $ 131 |
Gross financing receivables collectively evaluated for loss | 6,433 | 6,378 | |
Gross financing receivables individually evaluated for loss | 256 | 292 | |
Allowance for financing receivables collectively evaluated for loss | 82 | 92 | |
Allowance for financing receivables individually evaluated for loss | $ 13 | 19 | |
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 | $ 358 | 243 | |
Past due 31-60 days | 52 | 46 | |
Past due 61-90 days | 14 | 12 | |
Past due >90 days | 57 | 49 | |
Unbilled sales-type and direct-financing lease receivables | 6,208 | 6,320 | |
Gross financing receivables on non-accrual status | 154 | 130 | |
Gross financing receivables 90 days past due and still accruing interest | 102 | 162 | |
Operating lease assets | |||
Equipment leased to customers | 4,077 | 3,977 | |
Accumulated depreciation | (1,367) | (1,382) | |
Operating lease assets, net | 2,710 | 2,595 | |
Minimum future rentals on non-cancelable operating leases: | |||
2,016 | 1,439 | ||
2,017 | 973 | ||
2,018 | 508 | ||
2,019 | 200 | ||
2,020 | 70 | ||
Thereafter | 17 | ||
Total | 3,207 | ||
Low | |||
Gross financing receivables | |||
Net Investment | 3,458 | 3,536 | |
Moderate | |||
Gross financing receivables | |||
Net Investment | 3,158 | 3,022 | |
High | |||
Gross financing receivables | |||
Net Investment | $ 73 | $ 112 |
Acquisitions and Divestitures72
Acquisitions and Divestitures (Details) $ in Millions | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||
May. 31, 2015USD ($) | Jan. 31, 2016USD ($) | Oct. 31, 2015USD ($)item | Oct. 31, 2014USD ($)item | Oct. 31, 2013USD ($) | |
Acquisitions | |||||
Goodwill | $ 32,941 | $ 31,139 | $ 31,124 | ||
Divestitures | |||||
Proceeds from business divestitures | 246 | $ 6 | |||
Aruba | |||||
Acquisitions | |||||
Total fair value of consideration | $ 2,800 | ||||
Goodwill | 1,800 | ||||
Intangible assets | $ 643 | ||||
Weighted-average useful life | 6 years | ||||
Aruba | In-process research and development | |||||
Acquisitions | |||||
Intangible assets | $ 153 | $ 153 | |||
Acquisitions in prior year | |||||
Acquisitions: | |||||
Number of acquisitions | item | 2 | ||||
Acquisitions | |||||
Total fair value of consideration | $ 55 | ||||
Goodwill | 12 | ||||
Intangible assets | $ 25 | ||||
Aggregate purchase price allocation | |||||
Acquisitions: | |||||
Number of acquisitions | item | 5 | ||||
Acquisitions | |||||
Total fair value of consideration | $ 3,071 | ||||
Goodwill | 1,987 | ||||
Intangible assets | 704 | ||||
Net assets assumed | 221 | ||||
Aggregate purchase price allocation | In-process research and development | |||||
Acquisitions | |||||
Net tangible assets | $ 159 | ||||
Non-core divestitures | Disposal groups | |||||
Divestitures | |||||
Number of divestitures | item | 5 | ||||
Proceeds from business divestitures | $ 246 | ||||
Non-core divestitures | Trend Micro International | Forecast | |||||
Divestitures | |||||
Proceeds from business divestitures | $ 300 | ||||
Disposal Group Disposed of by Other than Sale Not Discontinued Operations Spinoff | H3C | Hewlett Packard Enterprise China businesses | |||||
Divestitures | |||||
Entity ownership of Hewlett Packard Enterprise China businesses (as a percent) | 100.00% | ||||
Disposal Group Disposed of by Other than Sale Not Discontinued Operations Spinoff | Tsinghua Holdings Subsidiary | H3C | |||||
Divestitures | |||||
Interest acquired (as a percent) | 51.00% | ||||
Proceeds from divestiture of businesses | $ 2,300 |
Goodwill and Intangible Asset73
Goodwill and Intangible Assets (Details) $ in Millions | Aug. 01, 2015USD ($) | Oct. 31, 2015USD ($)item | Oct. 31, 2014USD ($) | Oct. 31, 2013USD ($) |
Goodwill | ||||
Balance at beginning of period | $ 31,139 | $ 31,124 | ||
Goodwill acquired during period | 1,987 | 12 | ||
Goodwill divestiture and foreign currency adjustments | (185) | 3 | ||
Balance at end of period | 32,941 | 31,139 | $ 31,124 | |
Impairment loss | 0 | 0 | ||
Accumulated impairment losses | 14,500 | |||
Personal Systems | ||||
Goodwill | ||||
Balance at beginning of period | 2,588 | 2,588 | ||
Balance at end of period | 2,588 | 2,588 | 2,588 | |
Printing | ||||
Goodwill | ||||
Balance at beginning of period | 3,103 | 3,103 | ||
Goodwill divestiture and foreign currency adjustments | (11) | |||
Balance at end of period | 3,092 | 3,103 | 3,103 | |
Goodwill transferred | 512 | |||
Enterprise Group | ||||
Goodwill | ||||
Balance at beginning of period | 16,867 | 16,864 | ||
Goodwill acquired during period | 1,891 | |||
Goodwill divestiture and foreign currency adjustments | (46) | 3 | ||
Balance at end of period | 18,712 | 16,867 | 16,864 | |
Enterprise Services segment | ||||
Goodwill | ||||
Balance at beginning of period | 97 | 97 | ||
Goodwill divestiture and foreign currency adjustments | (5) | |||
Balance at end of period | 92 | 97 | 97 | |
Accumulated impairment losses | 8,000 | 8,000 | 8,000 | |
Software | ||||
Goodwill | ||||
Balance at beginning of period | 8,340 | 8,328 | ||
Goodwill acquired during period | 96 | 12 | ||
Goodwill divestiture and foreign currency adjustments | (123) | |||
Balance at end of period | 8,313 | 8,340 | 8,328 | |
Accumulated impairment losses | 5,700 | 5,700 | 5,700 | |
Goodwill transferred | (512) | |||
HP Financial Services | ||||
Goodwill | ||||
Balance at beginning of period | 144 | 144 | ||
Balance at end of period | 144 | 144 | 144 | |
Corporate Investments | ||||
Goodwill | ||||
Accumulated impairment losses | $ 800 | $ 800 | $ 800 | |
Other reporting units | ||||
Goodwill | ||||
Impairment loss | $ 0 | |||
E S Segment Member | ||||
Goodwill | ||||
Number of reporting units | item | 2 |
Goodwill and Intangible Asset74
Goodwill and Intangible Assets (Details 2) - USD ($) $ in Millions | 12 Months Ended | |
Oct. 31, 2015 | Oct. 31, 2014 | |
Intangible assets | ||
Amortizable intangible assets, accumulated amortization | $ (4,896) | $ (4,790) |
Finite-lived Intangible Assets, Accumulated Impairment Losses | (4,330) | (4,330) |
Amortizable intangible assets, net | 1,855 | |
Intangible assets, gross | 11,240 | 11,248 |
Intangible assets | 2,014 | 2,128 |
Amount of fully amortized intangible assets | 936 | 855 |
In-process research and development | ||
Intangible assets | ||
Indefinite-lived intangible assets | 159 | |
Customer contracts, customer lists and distribution agreements | ||
Intangible assets | ||
Amortizable intangible assets, gross | 5,311 | 5,289 |
Amortizable intangible assets, accumulated amortization | (3,674) | (3,228) |
Finite-lived Intangible Assets, Accumulated Impairment Losses | (856) | (856) |
Amortizable intangible assets, net | $ 781 | 1,205 |
Weighted-Average Useful Lives | 8 years | |
Developed and core technology and patents | ||
Intangible assets | ||
Amortizable intangible assets, gross | $ 4,312 | 4,266 |
Amortizable intangible assets, accumulated amortization | (1,165) | (1,301) |
Finite-lived Intangible Assets, Accumulated Impairment Losses | (2,138) | (2,138) |
Amortizable intangible assets, net | $ 1,009 | 827 |
Weighted-Average Useful Lives | 7 years | |
Trade name and trade marks | ||
Intangible assets | ||
Amortizable intangible assets, gross | $ 1,458 | 1,693 |
Amortizable intangible assets, accumulated amortization | (57) | (261) |
Intangible Assets, Accumulated Impairment Losses | (1,336) | (1,336) |
Amortizable intangible assets, net | $ 65 | $ 96 |
Weighted-Average Useful Lives | 7 years |
Goodwill and Intangible Asset75
Goodwill and Intangible Assets (Details 3) $ in Millions | Oct. 31, 2015USD ($) |
Estimated future amortization expense related to finite-lived purchased intangible assets | |
2,016 | $ 773 |
2,017 | 353 |
2,018 | 253 |
2,019 | 213 |
2,020 | 181 |
Thereafter | 82 |
Amortizable intangible assets, net | $ 1,855 |
Fair Value (Details)
Fair Value (Details) - USD ($) $ in Millions | 12 Months Ended | |
Oct. 31, 2015 | Oct. 31, 2014 | |
Financial assets and liabilities measured at fair value on a recurring basis | ||
Transfers between the levels within the fair value hierarchy | $ 0 | $ 0 |
Fair Value and Carrying Value of Debt | ||
Fair value, short- and long-term debt | 24,700 | 19,900 |
Carrying value, short- and long-term debt | 24,700 | 19,500 |
Impairment of data center assets | 136 | |
Fair Value, Measurements, Recurring | Fair Value | ||
Financial assets and liabilities measured at fair value on a recurring basis | ||
Total Assets, measured at fair value on a recurring basis | 14,261 | 14,388 |
Total Liabilities, measured at fair value on a recurring basis | 496 | 405 |
Fair Value, Measurements, Recurring | Time deposits | Fair Value | ||
Financial assets and liabilities measured at fair value on a recurring basis | ||
Total Assets, measured at fair value on a recurring basis | 3,584 | 2,865 |
Fair Value, Measurements, Recurring | Money market funds | Fair Value | ||
Financial assets and liabilities measured at fair value on a recurring basis | ||
Total Assets, measured at fair value on a recurring basis | 8,895 | 9,857 |
Fair Value, Measurements, Recurring | Mutual funds | Fair Value | ||
Financial assets and liabilities measured at fair value on a recurring basis | ||
Total Assets, measured at fair value on a recurring basis | 246 | 244 |
Fair Value, Measurements, Recurring | Marketable equity securities | Fair Value | ||
Financial assets and liabilities measured at fair value on a recurring basis | ||
Total Assets, measured at fair value on a recurring basis | 62 | 19 |
Fair Value, Measurements, Recurring | Foreign bonds | Fair Value | ||
Financial assets and liabilities measured at fair value on a recurring basis | ||
Total Assets, measured at fair value on a recurring basis | 355 | 376 |
Fair Value, Measurements, Recurring | Other debt securities | Fair Value | ||
Financial assets and liabilities measured at fair value on a recurring basis | ||
Total Assets, measured at fair value on a recurring basis | 42 | 47 |
Fair Value, Measurements, Recurring | Interest rate contracts | Fair Value | ||
Financial assets and liabilities measured at fair value on a recurring basis | ||
Total Assets, measured at fair value on a recurring basis | 38 | 105 |
Total Liabilities, measured at fair value on a recurring basis | 55 | 55 |
Fair Value, Measurements, Recurring | Foreign exchange contracts | Fair Value | ||
Financial assets and liabilities measured at fair value on a recurring basis | ||
Total Assets, measured at fair value on a recurring basis | 1,031 | 868 |
Total Liabilities, measured at fair value on a recurring basis | 441 | 350 |
Fair Value, Measurements, Recurring | Other derivatives | Fair Value | ||
Financial assets and liabilities measured at fair value on a recurring basis | ||
Total Assets, measured at fair value on a recurring basis | 8 | 7 |
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 | 8,955 | 9,880 |
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 | 8,895 | 9,857 |
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 | 52 | 14 |
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 | 8 | 9 |
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 | 5,264 | 4,456 |
Total Liabilities, measured at fair value on a recurring basis | 494 | 403 |
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 | 3,584 | 2,865 |
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 | 246 | 244 |
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 | 10 | 5 |
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 | 347 | 367 |
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 | 1 |
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 | 38 | 105 |
Total Liabilities, measured at fair value on a recurring basis | 55 | 55 |
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 | 1,029 | 862 |
Total Liabilities, measured at fair value on a recurring basis | 439 | 348 |
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 | 8 | 7 |
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 | 42 | 52 |
Total Liabilities, measured at fair value on a recurring basis | 2 | 2 |
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 | 40 | 46 |
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 | 2 | 6 |
Total Liabilities, measured at fair value on a recurring basis | $ 2 | $ 2 |
Financial Instruments (Details)
Financial Instruments (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2013 | |
Cash equivalents and available-for-sale investments | |||
Available-for-sale securities, Cost | $ 568 | $ 634 | |
Available-for-sale securities, Gross Unrealized Gain | 88 | 97 | |
Available-for-sale securities, Gross Unrealized Loss | (22) | (14) | |
Available-for-sale securities, Estimated Fair Value | 717 | ||
Interest income | 129 | 136 | $ 148 |
Cost | |||
Cash equivalents and available-for-sale investments | |||
Cash equivalents | 12,546 | 12,687 | |
Total cash equivalents and available-for-sale investments | 13,114 | 13,321 | |
Fair Value | |||
Cash equivalents and available-for-sale investments | |||
Cash equivalents | 12,687 | ||
Available-for-sale securities, Estimated Fair Value | 634 | ||
Total cash equivalents and available-for-sale investments | 13,180 | 13,404 | |
Debt securities: | |||
Cash equivalents and available-for-sale investments | |||
Available-for-sale securities, Gross Unrealized Gain | 79 | 90 | |
Available-for-sale securities, Gross Unrealized Loss | (13) | (14) | |
Gross unrealized loss of debt security in a continuous loss position for more than 12 months | 13 | 14 | |
Debt securities: | Cost | |||
Cash equivalents and available-for-sale investments | |||
Available-for-sale securities, Cost | 437 | 492 | |
Debt securities: | Fair Value | |||
Cash equivalents and available-for-sale investments | |||
Available-for-sale securities, Estimated Fair Value | 503 | 568 | |
Time deposits | Cost | |||
Cash equivalents and available-for-sale investments | |||
Available-for-sale securities, Cost | 106 | 145 | |
Time deposits | Fair Value | |||
Cash equivalents and available-for-sale investments | |||
Available-for-sale securities, Estimated Fair Value | 106 | 145 | |
Foreign bonds | |||
Cash equivalents and available-for-sale investments | |||
Available-for-sale securities, Gross Unrealized Gain | 79 | 90 | |
Foreign bonds | Cost | |||
Cash equivalents and available-for-sale investments | |||
Available-for-sale securities, Cost | 276 | 286 | |
Foreign bonds | Fair Value | |||
Cash equivalents and available-for-sale investments | |||
Available-for-sale securities, Estimated Fair Value | 355 | 376 | |
Other debt securities | |||
Cash equivalents and available-for-sale investments | |||
Available-for-sale securities, Gross Unrealized Loss | (13) | (14) | |
Other debt securities | Cost | |||
Cash equivalents and available-for-sale investments | |||
Available-for-sale securities, Cost | 55 | 61 | |
Other debt securities | Fair Value | |||
Cash equivalents and available-for-sale investments | |||
Available-for-sale securities, Estimated Fair Value | 42 | 47 | |
Marketable equity securities | |||
Cash equivalents and available-for-sale investments | |||
Available-for-sale securities, Gross Unrealized Gain | 9 | 7 | |
Available-for-sale securities, Gross Unrealized Loss | (9) | ||
Marketable equity securities | Cost | |||
Cash equivalents and available-for-sale investments | |||
Available-for-sale securities, Cost | 131 | 142 | |
Marketable equity securities | Fair Value | |||
Cash equivalents and available-for-sale investments | |||
Available-for-sale securities, Estimated Fair Value | 131 | 149 | |
Mutual funds | Cost | |||
Cash equivalents and available-for-sale investments | |||
Available-for-sale securities, Cost | 73 | 134 | |
Mutual funds | Fair Value | |||
Cash equivalents and available-for-sale investments | |||
Available-for-sale securities, Estimated Fair Value | 73 | 134 | |
Equity securities in public companies | |||
Cash equivalents and available-for-sale investments | |||
Available-for-sale securities, Gross Unrealized Gain | 9 | 7 | |
Available-for-sale securities, Gross Unrealized Loss | (9) | ||
Equity securities in public companies | Cost | |||
Cash equivalents and available-for-sale investments | |||
Available-for-sale securities, Cost | 58 | 8 | |
Equity securities in public companies | Fair Value | |||
Cash equivalents and available-for-sale investments | |||
Available-for-sale securities, Estimated Fair Value | 58 | 15 | |
Time deposits | Cost | |||
Cash equivalents and available-for-sale investments | |||
Cash equivalents | 3,478 | 2,720 | |
Time deposits | Fair Value | |||
Cash equivalents and available-for-sale investments | |||
Cash equivalents | 3,478 | 2,720 | |
Money market funds | Cost | |||
Cash equivalents and available-for-sale investments | |||
Cash equivalents | 8,895 | 9,857 | |
Money market funds | Fair Value | |||
Cash equivalents and available-for-sale investments | |||
Cash equivalents | 8,895 | 9,857 | |
Mutual funds | Cost | |||
Cash equivalents and available-for-sale investments | |||
Cash equivalents | 173 | 110 | |
Mutual funds | Fair Value | |||
Cash equivalents and available-for-sale investments | |||
Cash equivalents | $ 173 | $ 110 |
Financial Instruments (Detail 2
Financial Instruments (Detail 2) - USD ($) $ in Millions | Oct. 31, 2015 | Oct. 31, 2014 |
Cost | ||
Due in one year | $ 104 | |
Due in one to five years | 14 | |
Due in more than five years | 319 | |
Total | 437 | |
Fair Value | ||
Due in one year | 104 | |
Due in one to five years | 14 | |
Due in more than five years | 385 | |
Total | 503 | |
Investment Holdings | ||
Investment amount | $ 717 | |
Equity securities in privately held companies | Long-term Financing Receivables and Other Assets | ||
Investment Holdings | ||
Investment amount | $ 58 | $ 97 |
Financial Instruments (Detail 3
Financial Instruments (Detail 3) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2015 | Oct. 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 | ||
Derivative, Collateral, Obligation to Return Cash | $ 640 | $ 452 | |
Financial Collateral | 19 | 29 | |
Derivatives, Fair Value | |||
Total derivatives, gross notional amount | 52,624 | 54,693 | |
Derivative asset, fair value | 1,077 | 980 | |
Derivative liability, fair value | 496 | 405 | |
Collateralized arrangements in net liability position | 173 | 38 | |
Other Comprehensive Income (Loss), Net of Tax | (421) | (2,103) | $ 1,781 |
Other Current Assets | |||
Derivatives, Fair Value | |||
Derivative Asset, Fair Value Gross Asset | 669 | 674 | |
Long-term Financing Receivables and Other Assets | |||
Derivatives, Fair Value | |||
Derivative Asset, Fair Value Gross Asset | 408 | 306 | |
Other Accrued Liabilities | |||
Derivatives, Fair Value | |||
Derivative Liability, Fair Value Gross Liability | 287 | 223 | |
Long-Term Other Liabilities | |||
Derivatives, Fair Value | |||
Derivative Liability, Fair Value Gross Liability | $ 209 | 182 | |
Cash flow hedges | |||
Derivatives, Fair Value | |||
Maturity period of foreign currency cash flow hedges | 12 months | ||
Cash flow hedges | Minimum | |||
Derivatives, Fair Value | |||
Duration of lease term for which lease-related forward contracts and intercompany lease loan forward contracts can be extended | 2 years | ||
Cash flow hedges | Maximum | |||
Derivatives, Fair Value | |||
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 | $ 34,086 | 32,948 | |
Derivatives designated as hedging instruments | Other Current Assets | |||
Derivatives, Fair Value | |||
Derivative Asset, Fair Value Gross Asset | 582 | 586 | |
Derivatives designated as hedging instruments | Long-term Financing Receivables and Other Assets | |||
Derivatives, Fair Value | |||
Derivative Asset, Fair Value Gross Asset | 319 | 273 | |
Derivatives designated as hedging instruments | Other Accrued Liabilities | |||
Derivatives, Fair Value | |||
Derivative Liability, Fair Value Gross Liability | 200 | 141 | |
Derivatives designated as hedging instruments | Long-Term Other Liabilities | |||
Derivatives, Fair Value | |||
Derivative Liability, Fair Value Gross Liability | 146 | 157 | |
Derivatives designated as hedging instruments | Fair value hedges | Interest rate contracts | |||
Derivatives, Fair Value | |||
Total derivatives, gross notional amount | 12,675 | 10,800 | |
Derivatives designated as hedging instruments | Fair value hedges | Interest rate contracts | Other Current Assets | |||
Derivatives, Fair Value | |||
Derivative Asset, Fair Value Gross Asset | 1 | 3 | |
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 Gross Asset | 37 | 102 | |
Derivatives designated as hedging instruments | Fair value hedges | Interest rate contracts | Long-Term Other Liabilities | |||
Derivatives, Fair Value | |||
Derivative Liability, Fair Value Gross Liability | 55 | 55 | |
Derivatives designated as hedging instruments | Cash flow hedges | Foreign exchange contracts | |||
Derivatives, Fair Value | |||
Total derivatives, gross notional amount | 19,551 | 20,196 | |
Derivatives designated as hedging instruments | Cash flow hedges | Foreign exchange contracts | Other Current Assets | |||
Derivatives, Fair Value | |||
Derivative Asset, Fair Value Gross Asset | 467 | 539 | |
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 Gross Asset | 216 | 124 | |
Derivatives designated as hedging instruments | Cash flow hedges | Foreign exchange contracts | Other Accrued Liabilities | |||
Derivatives, Fair Value | |||
Derivative Liability, Fair Value Gross Liability | 193 | 131 | |
Derivatives designated as hedging instruments | Cash flow hedges | Foreign exchange contracts | Long-Term Other Liabilities | |||
Derivatives, Fair Value | |||
Derivative Liability, Fair Value Gross Liability | 87 | 94 | |
Derivatives designated as hedging instruments | Net investment hedges | Foreign exchange contracts | |||
Derivatives, Fair Value | |||
Total derivatives, gross notional amount | 1,860 | 1,952 | |
Derivatives designated as hedging instruments | Net investment hedges | Foreign exchange contracts | Other Current Assets | |||
Derivatives, Fair Value | |||
Derivative Asset, Fair Value Gross Asset | 114 | 44 | |
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 Gross Asset | 66 | 47 | |
Derivatives designated as hedging instruments | Net investment hedges | Foreign exchange contracts | Other Accrued Liabilities | |||
Derivatives, Fair Value | |||
Derivative Liability, Fair Value Gross Liability | 7 | 10 | |
Derivatives designated as hedging instruments | Net investment hedges | Foreign exchange contracts | Long-Term Other Liabilities | |||
Derivatives, Fair Value | |||
Derivative Liability, Fair Value Gross Liability | 4 | 8 | |
Derivatives not designated as hedging instruments | |||
Derivatives, Fair Value | |||
Total derivatives, gross notional amount | 18,538 | 21,745 | |
Derivatives not designated as hedging instruments | Other Current Assets | |||
Derivatives, Fair Value | |||
Derivative Asset, Fair Value Gross Asset | 87 | 88 | |
Derivatives not designated as hedging instruments | Long-term Financing Receivables and Other Assets | |||
Derivatives, Fair Value | |||
Derivative Asset, Fair Value Gross Asset | 89 | 33 | |
Derivatives not designated as hedging instruments | Other Accrued Liabilities | |||
Derivatives, Fair Value | |||
Derivative Liability, Fair Value Gross Liability | 87 | 82 | |
Derivatives not designated as hedging instruments | Long-Term Other Liabilities | |||
Derivatives, Fair Value | |||
Derivative Liability, Fair Value Gross Liability | 63 | 25 | |
Derivatives not designated as hedging instruments | Foreign exchange contracts | |||
Derivatives, Fair Value | |||
Total derivatives, gross notional amount | 18,238 | 21,384 | |
Derivatives not designated as hedging instruments | Foreign exchange contracts | Other Current Assets | |||
Derivatives, Fair Value | |||
Derivative Asset, Fair Value Gross Asset | 79 | 82 | |
Derivatives not designated as hedging instruments | Foreign exchange contracts | Long-term Financing Receivables and Other Assets | |||
Derivatives, Fair Value | |||
Derivative Asset, Fair Value Gross Asset | 89 | 32 | |
Derivatives not designated as hedging instruments | Foreign exchange contracts | Other Accrued Liabilities | |||
Derivatives, Fair Value | |||
Derivative Liability, Fair Value Gross Liability | 87 | 82 | |
Derivatives not designated as hedging instruments | Foreign exchange contracts | Long-Term Other Liabilities | |||
Derivatives, Fair Value | |||
Derivative Liability, Fair Value Gross Liability | 63 | 25 | |
Derivatives not designated as hedging instruments | Other derivatives | |||
Derivatives, Fair Value | |||
Total derivatives, gross notional amount | 300 | 361 | |
Derivatives not designated as hedging instruments | Other derivatives | Other Current Assets | |||
Derivatives, Fair Value | |||
Derivative Asset, Fair Value Gross Asset | $ 8 | 6 | |
Derivatives not designated as hedging instruments | Other derivatives | Long-term Financing Receivables and Other Assets | |||
Derivatives, Fair Value | |||
Derivative Asset, Fair Value Gross Asset | $ 1 |
Financial Instruments (Details
Financial Instruments (Details 4) - USD ($) $ in Millions | Oct. 31, 2015 | Oct. 31, 2014 |
Derivative assets | ||
Gross Amount Recognized | $ 1,077 | $ 980 |
Net Amount Presented | 1,077 | 980 |
Gross Amounts Not Offset | ||
Derivatives | 315 | 361 |
Derivative, Collateral, Obligation to Return Cash | 640 | 452 |
Net Amount | 122 | 167 |
Derivative liabilities | ||
Gross Amount Recognized | 496 | 405 |
Net Amount Presented | 496 | 405 |
Gross Amounts Not Offset | ||
Derivatives | 315 | 361 |
Financial Collateral | 19 | 29 |
Net Amount | $ 162 | $ 15 |
Financial Instruments (Detail 5
Financial Instruments (Detail 5) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2015 | Oct. 31, 2014 | Oct. 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 | $ 0 | $ 0 |
Net revenue | 103,355 | 111,454 | 112,298 |
Cost of products | 97,884 | 104,269 | 105,167 |
Interest and other, net | (739) | (628) | (621) |
Earnings before taxes | 4,732 | 6,557 | 6,510 |
Pre-tax effect of derivative instruments not designated as hedging instruments on the Consolidated Condensed Statements of Earnings | |||
Gain (Loss) recognized in income on derivatives not designated as hedges | 304 | 106 | 170 |
Change in unrealized (losses) gains on cash flow hedges | Reclassifications of losses (gains) into earnings | |||
Pre-tax effect of derivative instruments in cash flow and net investment hedging relationships | |||
Net revenue | (1,271) | 21 | (48) |
Cost of products | 150 | 71 | 165 |
Other operating expenses | 7 | 9 | (1) |
Interest and other, net | (198) | 50 | (10) |
Earnings before taxes | (1,312) | 151 | 106 |
Interest rate contracts | |||
Pre-tax effect of derivative instruments and related hedged items in a fair value hedging relationship | |||
(Loss) Gain Recognized in Income on Derivative | (67) | 1 | (270) |
(Loss) Gain recognized in Income on Related Hedged Item | 67 | (1) | 270 |
Pre-tax effect of derivative instruments not designated as hedging instruments on the Consolidated Condensed Statements of Earnings | |||
Gain (Loss) recognized in income on derivatives not designated as hedges | 3 | ||
Foreign exchange contracts | |||
Pre-tax effect of derivative instruments not designated as hedging instruments on the Consolidated Condensed Statements of Earnings | |||
Gain (Loss) recognized in income on derivatives not designated as hedges | 304 | 106 | 156 |
Other derivatives | |||
Pre-tax effect of derivative instruments not designated as hedging instruments on the Consolidated Condensed Statements of Earnings | |||
Gain (Loss) recognized in income on derivatives not designated as hedges | 11 | ||
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 Derivative (Effective portion) | 1,091 | 337 | (243) |
Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) | 1,312 | (151) | (106) |
Gain expected to be reclassified from Accumulated OCI into earnings in next 12 months | 26 | ||
Cash flow hedges | Foreign exchange contracts | |||
Pre-tax effect of derivative instruments in cash flow and net investment hedging relationships | |||
Gain (Loss) Recognized in Other Comprehensive Income ("OCI") on Derivative (Effective portion) | 203 | (60) | 21 |
Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) | 198 | (50) | 10 |
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 Derivative (Effective portion) | 1,067 | 593 | (53) |
Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) | 1,271 | (21) | 48 |
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 Derivative (Effective portion) | (176) | (203) | (192) |
Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) | (150) | (71) | (165) |
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 Derivative (Effective portion) | (3) | 7 | (19) |
Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) | (7) | (9) | 1 |
Net investment hedges | Foreign exchange contracts | |||
Pre-tax effect of derivative instruments in cash flow and net investment hedging relationships | |||
Gain (Loss) Recognized in Other Comprehensive Income ("OCI") on Derivative (Effective portion) | $ 228 | $ 57 | $ 38 |
Borrowings (Details)
Borrowings (Details) - USD ($) $ in Millions | Nov. 04, 2015 | Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2013 |
Notes Payable and Short-Term Borrowings | ||||
Current portion of long-term debt | $ 2,321 | $ 2,655 | ||
Amount outstanding | $ 2,885 | $ 3,486 | ||
Current portion of long-term debt, weighted average interest rate (as a percent) | 3.20% | 2.20% | ||
Long term debt redeemed and repaid | $ 15,867 | $ 6,037 | $ 5,721 | |
Commercial paper | ||||
Notes Payable and Short-Term Borrowings | ||||
Amount outstanding | $ 39 | $ 298 | ||
Weighted average interest rate (as a percent) | 0.30% | 0.50% | ||
HP Financial Services | Commercial paper | ||||
Notes Payable and Short-Term Borrowings | ||||
Amount outstanding | $ 39 | $ 298 | ||
U.S. Dollar Global Notes | ||||
Notes Payable and Short-Term Borrowings | ||||
Long term debt redeemed and repaid | $ 2,100 | |||
Obligation related to notes payable to banks, lines of credit, uncommitted line of credit and other debt | ||||
Notes Payable and Short-Term Borrowings | ||||
Amount outstanding | $ 525 | $ 533 | ||
Weighted average interest rate (as a percent) | 3.10% | 4.00% | ||
Obligation related to notes payable to banks, lines of credit, uncommitted line of credit and other debt | HP Financial Services | ||||
Notes Payable and Short-Term Borrowings | ||||
Amount outstanding | $ 374 | $ 404 |
Borrowings (Details 2)
Borrowings (Details 2) - USD ($) | 1 Months Ended | 12 Months Ended | ||||||||||||
Oct. 31, 2015 | Jan. 31, 2014 | Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2013 | Mar. 31, 2012 | Dec. 31, 2011 | Sep. 30, 2011 | May. 31, 2011 | Dec. 31, 2010 | Sep. 30, 2010 | Mar. 31, 2008 | Feb. 28, 2007 | Oct. 31, 1999 | |
Long-term debt | ||||||||||||||
Total | $ 21,780,000,000 | $ 21,780,000,000 | $ 16,039,000,000 | |||||||||||
Fair value adjustment related to hedged debt | 48,000,000 | 48,000,000 | 120,000,000 | |||||||||||
Less: current portion | (2,321,000,000) | (2,321,000,000) | (2,655,000,000) | |||||||||||
Interest expense on borrowings recognized in Consolidated Condensed Statements of Earnings | ||||||||||||||
Financing interest | 240,000,000 | 277,000,000 | $ 312,000,000 | |||||||||||
Interest expense | 327,000,000 | 344,000,000 | 426,000,000 | |||||||||||
Total interest expense | 567,000,000 | 621,000,000 | $ 738,000,000 | |||||||||||
U.S. Dollar Global Notes | ||||||||||||||
Long-term debt | ||||||||||||||
Total | 8,638,000,000 | 8,638,000,000 | 17,837,000,000 | |||||||||||
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, paid November 2015 | ||||||||||||||
Long-term debt | ||||||||||||||
Total | $ 162,000,000 | $ 162,000,000 | 500,000,000 | |||||||||||
Discount to par (as a percent) | 99.694% | 99.694% | 99.694% | |||||||||||
Interest rate (as a percent) | 5.40% | 5.40% | 5.40% | |||||||||||
Face amount of debt instrument | $ 500,000,000 | $ 500,000,000 | $ 500,000,000 | |||||||||||
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, paid November 2015 | ||||||||||||||
Long-term debt | ||||||||||||||
Total | $ 283,000,000 | $ 283,000,000 | 750,000,000 | |||||||||||
Discount to par (as a percent) | 99.932% | 99.932% | 99.932% | |||||||||||
Interest rate (as a percent) | 5.50% | 5.50% | 5.50% | |||||||||||
Face amount of debt instrument | $ 750,000,000 | $ 750,000,000 | $ 750,000,000 | |||||||||||
2009 Shelf Registration Statement-$1,100 issued at discount to par at a price of 99.887% in September 2010 at 2.125%, paid September 2015 | ||||||||||||||
Long-term debt | ||||||||||||||
Total | $ 1,100,000,000 | |||||||||||||
Discount to par (as a percent) | 99.887% | 99.887% | ||||||||||||
Interest rate (as a percent) | 2.125% | 2.125% | ||||||||||||
Face amount of debt instrument | $ 1,100,000,000 | $ 1,100,000,000 | ||||||||||||
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, paid November 2015 | ||||||||||||||
Long-term debt | ||||||||||||||
Total | $ 309,000,000 | $ 309,000,000 | 650,000,000 | |||||||||||
Discount to par (as a percent) | 99.911% | 99.911% | 99.911% | |||||||||||
Interest rate (as a percent) | 2.20% | 2.20% | 2.20% | |||||||||||
Face amount of debt instrument | $ 650,000,000 | $ 650,000,000 | $ 650,000,000 | |||||||||||
2009 Shelf Registration Statement-$1,350 issued at discount to par at a price of 99.827% in December 2010 at 3.75%, due December 2020 | ||||||||||||||
Long-term debt | ||||||||||||||
Total | $ 648,000,000 | $ 648,000,000 | 1,349,000,000 | |||||||||||
Discount to par (as a percent) | 99.827% | 99.827% | 99.827% | |||||||||||
Interest rate (as a percent) | 3.75% | 3.75% | 3.75% | |||||||||||
Face amount of debt instrument | $ 1,350,000,000 | $ 1,350,000,000 | $ 1,350,000,000 | |||||||||||
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, paid November 2015 | ||||||||||||||
Long-term debt | ||||||||||||||
Total | $ 346,000,000 | $ 346,000,000 | 1,000,000,000 | |||||||||||
Discount to par (as a percent) | 99.958% | 99.958% | 99.958% | |||||||||||
Interest rate (as a percent) | 2.65% | 2.65% | 2.65% | |||||||||||
Face amount of debt instrument | $ 1,000,000,000 | $ 1,000,000,000 | $ 1,000,000,000 | |||||||||||
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 | $ 1,248,000,000 | $ 1,248,000,000 | 1,248,000,000 | |||||||||||
Discount to par (as a percent) | 99.799% | 99.799% | 99.799% | |||||||||||
Interest rate (as a percent) | 4.30% | 4.30% | 4.30% | |||||||||||
Face amount of debt instrument | $ 1,250,000,000 | $ 1,250,000,000 | $ 1,250,000,000 | |||||||||||
2009 Shelf Registration Statement-$750 issued at discount to par at a price of 99.977% in September 2011 at 2.35%, paid March 2015 | ||||||||||||||
Long-term debt | ||||||||||||||
Total | $ 750,000,000 | |||||||||||||
Discount to par (as a percent) | 99.977% | 99.977% | ||||||||||||
Interest rate (as a percent) | 2.35% | 2.35% | ||||||||||||
Face amount of debt instrument | $ 750,000,000 | $ 750,000,000 | ||||||||||||
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, paid November 2015 | ||||||||||||||
Long-term debt | ||||||||||||||
Total | $ 390,000,000 | $ 390,000,000 | 1,298,000,000 | |||||||||||
Discount to par (as a percent) | 99.784% | 99.784% | 99.784% | |||||||||||
Interest rate (as a percent) | 3.00% | 3.00% | 3.00% | |||||||||||
Face amount of debt instrument | $ 1,300,000,000 | $ 1,300,000,000 | $ 1,300,000,000 | |||||||||||
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 | $ 999,000,000 | $ 999,000,000 | 999,000,000 | |||||||||||
Discount to par (as a percent) | 99.816% | 99.816% | 99.816% | |||||||||||
Interest rate (as a percent) | 4.375% | 4.375% | 4.375% | |||||||||||
Face amount of debt instrument | $ 1,000,000,000 | $ 1,000,000,000 | $ 1,000,000,000 | |||||||||||
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 | $ 1,199,000,000 | $ 1,199,000,000 | 1,199,000,000 | |||||||||||
Discount to par (as a percent) | 99.863% | 99.863% | 99.863% | |||||||||||
Interest rate (as a percent) | 6.00% | 6.00% | 6.00% | |||||||||||
Face amount of debt instrument | $ 1,200,000,000 | $ 1,200,000,000 | $ 1,200,000,000 | |||||||||||
2009 Shelf Registration Statement-$650 issued at discount to par at a price of 99.946% in December 2011 at 2.625%, paid December 2014 | ||||||||||||||
Long-term debt | ||||||||||||||
Total | $ 650,000,000 | |||||||||||||
Discount to par (as a percent) | 99.946% | 99.946% | ||||||||||||
Interest rate (as a percent) | 2.625% | 2.625% | ||||||||||||
Face amount of debt instrument | $ 650,000,000 | $ 650,000,000 | ||||||||||||
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, paid November 2015 | ||||||||||||||
Long-term debt | ||||||||||||||
Total | $ 220,000,000 | $ 220,000,000 | 849,000,000 | |||||||||||
Discount to par (as a percent) | 99.79% | 99.79% | 99.79% | |||||||||||
Interest rate (as a percent) | 3.30% | 3.30% | 3.30% | |||||||||||
Face amount of debt instrument | $ 850,000,000 | $ 850,000,000 | $ 850,000,000 | |||||||||||
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 | $ 1,497,000,000 | $ 1,497,000,000 | 1,496,000,000 | |||||||||||
Discount to par (as a percent) | 99.707% | 99.707% | 99.707% | |||||||||||
Interest rate (as a percent) | 4.65% | 4.65% | 4.65% | |||||||||||
Face amount of debt instrument | $ 1,500,000,000 | $ 1,500,000,000 | $ 1,500,000,000 | |||||||||||
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, paid November 2015 | ||||||||||||||
Long-term debt | ||||||||||||||
Total | $ 436,000,000 | $ 436,000,000 | 1,500,000,000 | |||||||||||
Discount to par (as a percent) | 99.985% | 99.985% | 99.985% | |||||||||||
Interest rate (as a percent) | 2.60% | 2.60% | 2.60% | |||||||||||
Face amount of debt instrument | $ 1,500,000,000 | $ 1,500,000,000 | $ 1,500,000,000 | |||||||||||
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 | $ 499,000,000 | $ 499,000,000 | 499,000,000 | |||||||||||
Discount to par (as a percent) | 99.771% | 99.771% | 99.771% | |||||||||||
Interest rate (as a percent) | 4.05% | 4.05% | 4.05% | |||||||||||
Face amount of debt instrument | $ 500,000,000 | $ 500,000,000 | $ 500,000,000 | |||||||||||
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 | 102,000,000 | 102,000,000 | 750,000,000 | |||||||||||
Face amount of debt instrument | 750,000,000 | $ 750,000,000 | $ 750,000,000 | |||||||||||
Spread on reference interest rate (as a percent) | 0.94% | 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 | $ 300,000,000 | $ 300,000,000 | $ 1,250,000,000 | |||||||||||
Discount to par (as a percent) | 99.954% | 99.954% | ||||||||||||
Interest rate (as a percent) | 2.75% | 2.75% | 2.75% | |||||||||||
Face amount of debt instrument | $ 1,250,000,000 | $ 1,250,000,000 | $ 1,250,000,000 | |||||||||||
Hewlett Packard Enterprise Senior Notes | ||||||||||||||
Long-term debt | ||||||||||||||
Total | 14,583,000,000 | 14,583,000,000 | ||||||||||||
$2,250 issued at discount to par at a price of 99.944% in October 2015 at 2.4%, due October 2017 | ||||||||||||||
Long-term debt | ||||||||||||||
Total | $ 2,249,000,000 | $ 2,249,000,000 | ||||||||||||
Discount to par (as a percent) | 99.944% | 99.944% | ||||||||||||
Interest rate (as a percent) | 2.40% | 2.40% | ||||||||||||
Face amount of debt instrument | $ 2,250,000,000 | $ 2,250,000,000 | ||||||||||||
$2,650 issued at discount to par at a price of 99.872% in October 2015 at 2.8%, due October 2018 | ||||||||||||||
Long-term debt | ||||||||||||||
Total | $ 2,647,000,000 | $ 2,647,000,000 | ||||||||||||
Discount to par (as a percent) | 99.872% | 99.872% | ||||||||||||
Interest rate (as a percent) | 2.80% | 2.80% | ||||||||||||
Face amount of debt instrument | $ 2,650,000,000 | $ 2,650,000,000 | ||||||||||||
$3,000 issued at discount to par at a price of 99.972% in October 2015 at 3.6%, due October 2020 | ||||||||||||||
Long-term debt | ||||||||||||||
Total | $ 2,999,000,000 | $ 2,999,000,000 | ||||||||||||
Discount to par (as a percent) | 99.972% | 99.972% | ||||||||||||
Interest rate (as a percent) | 3.60% | 3.60% | ||||||||||||
Face amount of debt instrument | $ 3,000,000,000 | $ 3,000,000,000 | ||||||||||||
$1,350 issued at discount to par at a price of 99.802% in October 2015 at 4.4%, due October 2022 | ||||||||||||||
Long-term debt | ||||||||||||||
Total | $ 1,347,000,000 | $ 1,347,000,000 | ||||||||||||
Discount to par (as a percent) | 99.802% | 99.802% | ||||||||||||
Interest rate (as a percent) | 4.40% | 4.40% | ||||||||||||
Face amount of debt instrument | $ 1,350,000,000 | $ 1,350,000,000 | ||||||||||||
$2,500 issued at discount to par at a price of 99.725% in October 2015 at 4.9%, due October 2025 | ||||||||||||||
Long-term debt | ||||||||||||||
Total | $ 2,493,000,000 | $ 2,493,000,000 | ||||||||||||
Discount to par (as a percent) | 99.725% | 99.725% | ||||||||||||
Interest rate (as a percent) | 4.90% | 4.90% | ||||||||||||
Face amount of debt instrument | $ 2,500,000,000 | $ 2,500,000,000 | ||||||||||||
$750 issued at discount to par at a price of 99.942% in October 2015 at 6.2%, due October 2035 | ||||||||||||||
Long-term debt | ||||||||||||||
Total | $ 749,000,000 | $ 749,000,000 | ||||||||||||
Discount to par (as a percent) | 99.942% | 99.942% | ||||||||||||
Interest rate (as a percent) | 6.20% | 6.20% | ||||||||||||
Face amount of debt instrument | $ 750,000,000 | $ 750,000,000 | ||||||||||||
$1,500 issued at discount to par at a price of 99.932% in October 2015 at 6.3%, due October 2045 | ||||||||||||||
Long-term debt | ||||||||||||||
Total | $ 1,499,000,000 | $ 1,499,000,000 | ||||||||||||
Discount to par (as a percent) | 99.932% | 99.932% | ||||||||||||
Interest rate (as a percent) | 6.30% | 6.30% | ||||||||||||
Face amount of debt instrument | $ 1,500,000,000 | $ 1,500,000,000 | ||||||||||||
$350 issued at par in October 2015 at three-month USD LIBOR plus 1.74%, due October 2017 | ||||||||||||||
Long-term debt | ||||||||||||||
Total | 350,000,000 | 350,000,000 | ||||||||||||
Face amount of debt instrument | $ 350,000,000 | 350,000,000 | ||||||||||||
Spread on reference interest rate (as a percent) | 1.74% | |||||||||||||
$250 issued at par in October 2015 at three-month USD LIBOR plus 1.93%, due October 2018 | ||||||||||||||
Long-term debt | ||||||||||||||
Total | $ 250,000,000 | 250,000,000 | ||||||||||||
Face amount of debt instrument | $ 250,000,000 | 250,000,000 | ||||||||||||
Spread on reference interest rate (as a percent) | 1.93% | |||||||||||||
EDS Senior Notes-$300 issued October 1999 at 7.45%, due October 2029 | ||||||||||||||
Long-term debt | ||||||||||||||
Total | $ 313,000,000 | $ 313,000,000 | $ 313,000,000 | |||||||||||
Interest rate (as a percent) | 7.45% | 7.45% | 7.45% | |||||||||||
Face amount of debt instrument | $ 300,000,000 | $ 300,000,000 | $ 300,000,000 | |||||||||||
Other, including capital lease obligations, at 0.00%-8.30%, due in calendar years 2015-2024 | ||||||||||||||
Long-term debt | ||||||||||||||
Other, including capital lease obligations | 519,000,000 | $ 519,000,000 | 424,000,000 | |||||||||||
Minimum interest rate (as a percent) | 0.00% | |||||||||||||
Maximum interest rate (as a percent) | 8.30% | |||||||||||||
Other, including capital lease obligations, at 0.00%-8.30%, due in calendar years 2015-2024 | HP Financial Services | ||||||||||||||
Long-term debt | ||||||||||||||
Other, including capital lease obligations | $ 196,000,000 | $ 196,000,000 | $ 123,000,000 |
Borrowings (Details 3)
Borrowings (Details 3) $ in Millions | Nov. 04, 2015USD ($) | Oct. 09, 2015USD ($)item | Oct. 31, 2015USD ($) | Oct. 31, 2015USD ($) | Sep. 30, 2015USD ($)item |
Hewlett Packard Enterprise Senior Notes | |||||
Debt instruments | |||||
Number of series of senior unsecured notes | item | 9 | ||||
Aggregate principal amount | $ 14,600 | ||||
Unsecured fixed rate notes | |||||
Debt instruments | |||||
Aggregate principal amount | 14,000 | ||||
Unsecured floating rate notes | |||||
Debt instruments | |||||
Aggregate principal amount | 600 | ||||
Interest Rate Swap | Unsecured fixed rate notes | |||||
Debt instruments | |||||
Interest Rate Swap, Exposure Coverage | 9,500 | ||||
Other Assets | Hewlett Packard Enterprise Senior Notes | |||||
Debt instruments | |||||
Issuance costs | $ 54 | ||||
The Tender Offers | |||||
Extinguishment of Debt | |||||
Debt securities repurchase authorized amount | $ 8,850 | ||||
Number of separate offers | item | 2 | ||||
The Tender Offers | Early Debt Redemption | |||||
Extinguishment of Debt | |||||
Loss from early extinguishment | $ 66 | $ 167 | |||
Early debt redeemed and repaid | $ 2,100 | $ 6,600 | |||
2.20% Notes due Dec. 2015 | |||||
Extinguishment of Debt | |||||
Interest rate (as a percent) | 2.20% | ||||
2.65% Notes due June 2016 | |||||
Extinguishment of Debt | |||||
Interest rate (as a percent) | 2.65% | ||||
3.00% Notes due Sept. 2016 | |||||
Extinguishment of Debt | |||||
Interest rate (as a percent) | 3.00% | ||||
3.30% Notes due Dec. 2016 | |||||
Extinguishment of Debt | |||||
Interest rate (as a percent) | 3.30% | ||||
5.40% Notes due March 2017 | |||||
Extinguishment of Debt | |||||
Interest rate (as a percent) | 5.40% | ||||
2.60% Notes due Sept. 2017 | |||||
Extinguishment of Debt | |||||
Interest rate (as a percent) | 2.60% | ||||
5.50% Notes due March 2018 | |||||
Extinguishment of Debt | |||||
Interest rate (as a percent) | 5.50% | ||||
2.75% Notes due Jan. 2019 | |||||
Extinguishment of Debt | |||||
Debt securities repurchase authorized amount | $ 2,300 | ||||
Interest rate (as a percent) | 2.75% | ||||
3.75% Notes due Dec. 2020 | |||||
Extinguishment of Debt | |||||
Interest rate (as a percent) | 3.75% | ||||
4.30% Notes due June 2021 | |||||
Extinguishment of Debt | |||||
Interest rate (as a percent) | 4.30% | ||||
4.375% Notes due Sept. 2021 | |||||
Extinguishment of Debt | |||||
Interest rate (as a percent) | 4.375% | ||||
4.650% Notes due Dec. 2021 | |||||
Extinguishment of Debt | |||||
Interest rate (as a percent) | 4.65% | ||||
4.050% Notes due Sept. 2022 | |||||
Extinguishment of Debt | |||||
Interest rate (as a percent) | 4.05% | ||||
6.00% Notes due Sept. 2041 | |||||
Extinguishment of Debt | |||||
Interest rate (as a percent) | 6.00% |
Borrowings (Details 4)
Borrowings (Details 4) $ in Millions | Nov. 01, 2015USD ($) | Oct. 31, 2015USD ($)item | Oct. 09, 2015USD ($) | Apr. 30, 2015USD ($) | Sep. 30, 2012USD ($) |
Aggregate future maturities of debt outstanding including capital lease obligations | |||||
2,016 | $ 2,885 | ||||
2,017 | 2,653 | ||||
2,018 | 3,029 | ||||
2,019 | 411 | ||||
2,020 | 3,003 | ||||
Thereafter | 12,648 | ||||
Total | 24,629 | ||||
Amount of debt hedged | 48 | ||||
Premium on debt issuance | 13 | ||||
Discount on debt issuance | $ 25 | ||||
Hewlett Packard Enterprise Senior Notes | |||||
Debt instruments | |||||
Aggregate principal amount | $ 14,600 | ||||
Unsecured fixed rate notes | |||||
Debt instruments | |||||
Aggregate principal amount | 14,000 | ||||
Unsecured floating rate notes | |||||
Debt instruments | |||||
Aggregate principal amount | $ 600 | ||||
Commercial paper | |||||
Debt instruments | |||||
Number of commercial paper programs | item | 2 | ||||
Maximum borrowing capacity under credit facility | $ 16,000 | ||||
Amount of additional commercial paper authorization for subsidiaries | 1,000 | ||||
Available borrowing resources, other than 2012 Shelf Registration | 16,461 | ||||
Commercial paper | Maximum | |||||
Debt instruments | |||||
Aggregate principal amount | $ 4,000 | ||||
U.S. program | |||||
Debt instruments | |||||
Maximum borrowing capacity under credit facility | 16,000 | ||||
Euro program | |||||
Debt instruments | |||||
Maximum borrowing capacity under credit facility | $ 3,000 | ||||
Credit facilities | |||||
Debt instruments | |||||
Amount available under credit facility | 7,500 | ||||
Available borrowing resources, other than 2012 Shelf Registration | 2,524 | ||||
Credit facility expiring April 2019 | |||||
Debt instruments | |||||
Amount available under credit facility | $ 4,500 | $ 4,500 | |||
Term of credit facility | 5 years | 5 years | |||
Credit facility expiring March 2017 | |||||
Debt instruments | |||||
Amount available under credit facility | $ 3,000 | $ 3,000 | |||
Term of credit facility | 5 years | ||||
Credit facility expiring March 2017 | Euro | |||||
Debt instruments | |||||
Maximum borrowing capacity under credit facility | 2,200 | ||||
Credit facility expiring March 2017 | GBP | |||||
Debt instruments | |||||
Maximum borrowing capacity under credit facility | $ 300 | ||||
Revolving credit facility | |||||
Debt instruments | |||||
Maximum borrowing capacity under credit facility | $ 4,000 | ||||
Term loan facility | |||||
Debt instruments | |||||
Maximum borrowing capacity under credit facility | $ 5,000 | ||||
Number of independent publicly-traded companies, which the funds were used to pay their separation costs | item | 2 | ||||
Amount borrowed | $ 3,500 | ||||
Amount repaid | 3,500 | ||||
Hewlett-Packard International Bank PLC | Euro Commercial Paper/Certificate of Deposit Programme | |||||
Debt instruments | |||||
Maximum borrowing capacity under credit facility | 500 | ||||
Hewlett-Packard Enterprise | U.S. program | |||||
Debt instruments | |||||
Maximum borrowing capacity under credit facility | 4,000 | ||||
Hewlett-Packard Enterprise | Euro program | |||||
Debt instruments | |||||
Maximum borrowing capacity under credit facility | $ 3,000 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 12 Months Ended | |||
Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2013 | Oct. 31, 2011 | |
Stockholders' Equity | ||||
Common Stock, Dividends, Per Share, Declared | $ 0.67 | $ 0.61 | $ 0.55 | |
Repurchases of common stock (in shares) | 75 | 92 | 77 | |
Payment in connection with repurchases of shares | $ 2,883 | $ 2,728 | $ 1,532 | |
Share repurchases that will be settled in subsequent period | 0.5 | |||
Share repurchase authorization remaining | $ 2,000 | |||
Share repurchase authorization increase after balance sheet date | $ 10,000 | |||
Changes and reclassifications related to Other Comprehensive (Loss) Income, net of taxes | ||||
Tax (provision) benefit on unrealized gains (losses) arising during the period | 14 | (66) | (239) | |
Net change | (6,302) | (5,881) | ||
Net revenue | 103,355 | 111,454 | 112,298 | |
Cost of products | 97,884 | 104,269 | 105,167 | |
Interest and other, net | (739) | (628) | (621) | |
Earnings before taxes | 4,732 | 6,557 | 6,510 | |
Other comprehensive (loss) income, net of taxes | (421) | (2,103) | 1,781 | |
Reclassifications of losses (gains) into earnings | ||||
Changes and reclassifications related to Other Comprehensive (Loss) Income, net of taxes | ||||
Other comprehensive (loss) income, net of taxes | (421) | (2,103) | 1,781 | |
Change in unrealized (losses) gains on available-for-sale securities | ||||
Changes and reclassifications related to Other Comprehensive (Loss) Income, net of taxes | ||||
Tax benefit (provision) on other comprehensive (loss) income | 2 | (1) | (14) | |
Tax (provision) benefit on unrealized gains (losses) arising during the period | 2 | (1) | (14) | |
Other comprehensive (losses) income before reclassifications | (15) | 6 | 38 | |
(Gains) losses reclassified into earnings | (1) | (49) | ||
Net change in unrealized (losses) gains on available-for-sale securities | (15) | 5 | (11) | |
Change in unrealized (losses) gains on cash flow hedges | ||||
Changes and reclassifications related to Other Comprehensive (Loss) Income, net of taxes | ||||
Tax benefit (provision) on other comprehensive (loss) income | (294) | (174) | 97 | |
Tax provision (benefit) on (gains) losses | 368 | (18) | (49) | |
Tax (provision) benefit on unrealized gains (losses) arising during the period | 74 | (192) | 48 | |
Other comprehensive (losses) income before reclassifications | 797 | 163 | (146) | |
(Gains) losses reclassified into earnings | (944) | 133 | 57 | |
Net change in unrealized (losses) gains on derivatives qualifying as hedges | (147) | 296 | (89) | |
Change in unrealized (losses) gains on cash flow hedges | Reclassifications of losses (gains) into earnings | ||||
Changes and reclassifications related to Other Comprehensive (Loss) Income, net of taxes | ||||
Net revenue | (1,271) | 21 | (48) | |
Cost of products | 150 | 71 | 165 | |
Other operating expenses | 7 | 9 | (1) | |
Interest and other, net | (198) | 50 | (10) | |
Earnings before taxes | (1,312) | 151 | 106 | |
Change in unrealized components of defined benefit plans | ||||
Changes and reclassifications related to Other Comprehensive (Loss) Income, net of taxes | ||||
Tax (provision) benefit on unrealized gains (losses) arising during the period | 11 | 154 | (298) | |
Net change in unrealized gains (losses) on benefit plans | 21 | (2,292) | 2,006 | |
(Losses) gains arising during the period | ||||
Changes and reclassifications related to Other Comprehensive (Loss) Income, net of taxes | ||||
Tax (provision) benefit on unrealized gains (losses) arising during the period | 5 | 181 | (258) | |
Losses (gains) adjustments reclassified into earnings | (543) | (2,575) | 1,695 | |
Amortization of actuarial loss and prior service benefit | ||||
Changes and reclassifications related to Other Comprehensive (Loss) Income, net of taxes | ||||
Tax provision (benefit) on (gains) losses | (18) | (18) | (35) | |
Losses (gains) adjustments reclassified into earnings | 425 | 241 | 291 | |
Curtailments, settlements and other | ||||
Changes and reclassifications related to Other Comprehensive (Loss) Income, net of taxes | ||||
Tax (provision) benefit on unrealized gains (losses) arising during the period | (24) | 9 | 5 | |
Net change in unrealized gains (losses) on other adjustments | 139 | 42 | 20 | |
Change in cumulative translation adjustment | ||||
Changes and reclassifications related to Other Comprehensive (Loss) Income, net of taxes | ||||
Tax (provision) benefit on unrealized gains (losses) arising during the period | (73) | (27) | 25 | |
Net change in unrealized gains (losses) in translation adjustment | $ (280) | $ (112) | $ (125) |
Stockholders' Equity (Details 2
Stockholders' Equity (Details 2) $ in Millions | 12 Months Ended |
Oct. 31, 2015USD ($) | |
Components of accumulated other comprehensive income, net of taxes | |
Balance at beginning of period | $ 26,731 |
Balance at end of period | 27,768 |
Change in unrealized (losses) gains on available-for-sale securities | |
Components of accumulated other comprehensive income, net of taxes | |
Balance at beginning of period | 81 |
Other comprehensive (loss) income before reclassifications | (15) |
Balance at end of period | 66 |
Change in unrealized (losses) gains on cash flow hedges | |
Components of accumulated other comprehensive income, net of taxes | |
Balance at beginning of period | 108 |
Other comprehensive (loss) income before reclassifications | 797 |
Reclassifications of (gains) losses into earnings | (944) |
Balance at end of period | (39) |
Change in unrealized components of defined benefit plans | |
Components of accumulated other comprehensive income, net of taxes | |
Balance at beginning of period | (5,376) |
Other comprehensive (loss) income before reclassifications | (404) |
Reclassifications of (gains) losses into earnings | 425 |
Balance at end of period | (5,355) |
Change in cumulative translation adjustment | |
Components of accumulated other comprehensive income, net of taxes | |
Balance at beginning of period | (694) |
Other comprehensive (loss) income before reclassifications | (280) |
Balance at end of period | (974) |
Accumulated Other Comprehensive (Loss) Income | |
Components of accumulated other comprehensive income, net of taxes | |
Balance at beginning of period | (5,881) |
Other comprehensive (loss) income before reclassifications | 98 |
Reclassifications of (gains) losses into earnings | (519) |
Balance at end of period | $ (6,302) |
Net Earnings Per Share (Detail)
Net Earnings Per Share (Detail) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2013 | |
Numerator: | |||
Net earnings | $ 4,554 | $ 5,013 | $ 5,113 |
Denominator: | |||
Weighted-average shares used to compute basic net EPS | 1,814,000,000 | 1,882,000,000 | 1,934,000,000 |
Dilutive effect of employee stock plans (in shares) | 22,000,000 | 30,000,000 | 16,000,000 |
Weighted-average shares used to compute diluted net EPS | 1,836,000,000 | 1,912,000,000 | 1,950,000,000 |
Net earnings per share: | |||
Basic (in dollars per share) | $ 2.51 | $ 2.66 | $ 2.64 |
Diluted (in dollars per share) | $ 2.48 | $ 2.62 | $ 2.62 |
Weighted Average Number of Shares, Restricted Stock | 0 | ||
Anti dilutive weighted-average options (in shares) | 23,000,000 | 26,000,000 | 52,000,000 |
Litigation and Contingencies (D
Litigation and Contingencies (Detail) € in Millions, $ in Millions | Oct. 01, 2015USD ($) | Aug. 21, 2015USD ($) | Aug. 10, 2015EUR (€) | Aug. 10, 2015USD ($) | Jun. 09, 2015USD ($)item | Apr. 17, 2015USD ($)item | Jan. 24, 2013USD ($) | Dec. 11, 2012USD ($) | Dec. 06, 2012item | Apr. 21, 2012USD ($) | May. 10, 2010USD ($) | Apr. 29, 2010USD ($) | Dec. 23, 2004€ / item | Jul. 31, 2011 | Oct. 31, 2012USD ($)item | Jul. 31, 2013 | Oct. 31, 2008item | Oct. 31, 2007item | Oct. 31, 2006EUR (€) | Nov. 20, 2015item | Oct. 31, 2015USD ($) | Oct. 02, 2015item | Aug. 11, 2015item | Jul. 30, 2013item | Jul. 26, 2013item | Nov. 30, 2012item | Apr. 20, 2012USD ($) | Apr. 11, 2012USD ($) |
Copyright Levies | ||||||||||||||||||||||||||||
Levy assessed on a specific vendor on personal computers sold since March 2001 in Germany (euros per unit) | € / item | 12 | |||||||||||||||||||||||||||
Litigation and Contingencies | ||||||||||||||||||||||||||||
Copyright levies payable on sales of MFDs in Belgium | $ 0 | |||||||||||||||||||||||||||
Number of patents asserted | item | 3 | 4 | ||||||||||||||||||||||||||
Memjet | ||||||||||||||||||||||||||||
Litigation and Contingencies | ||||||||||||||||||||||||||||
Number of patents asserted | item | 8 | |||||||||||||||||||||||||||
VG Wort | ||||||||||||||||||||||||||||
Litigation and Contingencies | ||||||||||||||||||||||||||||
Loss contingency damages paid | € 68.2 | $ 72 | ||||||||||||||||||||||||||
India Directorate of Revenue Intelligence Proceedings | ||||||||||||||||||||||||||||
Litigation and Contingencies | ||||||||||||||||||||||||||||
Aggregate damages sought | $ 370 | |||||||||||||||||||||||||||
Loss contingency deposit to prevent interruption of business | $ 16 | |||||||||||||||||||||||||||
Bangalore Commissioner of Customs | ||||||||||||||||||||||||||||
Litigation and Contingencies | ||||||||||||||||||||||||||||
Duties and penalties under show cause notices | $ 17 | $ 386 | ||||||||||||||||||||||||||
Amount deposited under show cause notice prior to order | $ 7 | $ 9 | ||||||||||||||||||||||||||
Additional amount deposited against products-related show cause notice | $ 10 | |||||||||||||||||||||||||||
Additional amount deposited against parts-related show cause notice | $ 3 | |||||||||||||||||||||||||||
Additional amount deposited against product order | $ 24 | |||||||||||||||||||||||||||
Russia GPO and Other Anti-Corruption Investigations | ||||||||||||||||||||||||||||
Litigation and Contingencies | ||||||||||||||||||||||||||||
Transaction of former subsidiary under investigation | € | € 35 | |||||||||||||||||||||||||||
ECT Proceedings | ||||||||||||||||||||||||||||
Litigation and Contingencies | ||||||||||||||||||||||||||||
ETC Proceedings, period to suspend right to bid and contract | 5 years | |||||||||||||||||||||||||||
Number of ECT contracts related to alleged improprieties | item | 3 | 3 | ||||||||||||||||||||||||||
ECT Proceedings | Minimum | ||||||||||||||||||||||||||||
Litigation and Contingencies | ||||||||||||||||||||||||||||
Length of sanctions | 2 years | |||||||||||||||||||||||||||
ECT Proceedings | Maximum | ||||||||||||||||||||||||||||
Litigation and Contingencies | ||||||||||||||||||||||||||||
Length of sanctions | 5 years | |||||||||||||||||||||||||||
Cisco Systems | ||||||||||||||||||||||||||||
Litigation and Contingencies | ||||||||||||||||||||||||||||
Aggregate damages sought | $ 58 | |||||||||||||||||||||||||||
Autonomy-Related Legal Matters | ||||||||||||||||||||||||||||
Litigation and Contingencies | ||||||||||||||||||||||||||||
Settlement amount | $ 100 | |||||||||||||||||||||||||||
Number of individuals contributing to class action settlement fund. | item | 0 | |||||||||||||||||||||||||||
Number of consolidated putative class action security lawsuits filed | item | 2 | |||||||||||||||||||||||||||
Number of consolidated lawsuits filed | item | 7 | |||||||||||||||||||||||||||
Number of lawsuits alleging insider trading filed | item | 1 | |||||||||||||||||||||||||||
Number of consolidated ERISA lawsuits filed | item | 3 | |||||||||||||||||||||||||||
Number of additional derivative actions filed | item | 2 | |||||||||||||||||||||||||||
Autonomy-Related Legal Matters | Autonomy | ||||||||||||||||||||||||||||
Litigation and Contingencies | ||||||||||||||||||||||||||||
Aggregate damages sought | $ 5,000 | |||||||||||||||||||||||||||
Number of subsidiaries | item | 4 | |||||||||||||||||||||||||||
Number of members | item | 2 | |||||||||||||||||||||||||||
Autonomy-Related Legal Matters | Autonomy | Messrs Lynch [Member] | ||||||||||||||||||||||||||||
Litigation and Contingencies | ||||||||||||||||||||||||||||
Aggregate damages sought | $ 160 | |||||||||||||||||||||||||||
Autonomy-Related Legal Matters | Software | ||||||||||||||||||||||||||||
Litigation and Contingencies | ||||||||||||||||||||||||||||
Impairment of goodwill and intangible assets | $ 8,800 |
Guarantees (Details)
Guarantees (Details) - USD ($) $ in Millions | 12 Months Ended | |
Oct. 31, 2015 | Oct. 31, 2014 | |
Changes in aggregated product warranty liabilities | ||
Balance at beginning of period | $ 1,956 | $ 2,031 |
Accruals for warranties issued | 1,507 | 1,840 |
Adjustments related to pre-existing warranties (including changes in estimates) | (32) | 12 |
Settlements made (in cash or in kind) | (1,723) | (1,927) |
Balance at end of period | $ 1,708 | $ 1,956 |
Commitments (Details)
Commitments (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2013 | Nov. 01, 2015 | |
Commitments | ||||
Rent expense | $ 1,000 | $ 1,000 | $ 1,000 | |
Property under capital lease | 207 | 229 | ||
Accumulated depreciation on property under capital lease | 187 | $ 207 | ||
Operating lease commitments, sublease rental income | ||||
2,016 | 624 | |||
2,017 | 517 | |||
2,018 | 379 | |||
2,019 | 310 | |||
2,020 | 237 | |||
Thereafter | 801 | |||
Less: Sublease rental income | (77) | |||
Total | 2,791 | $ 367 | ||
Unconditional purchase obligations details | ||||
Unconditional purchase obligations | 2,700 | |||
Unconditional purchase obligations, 2016 | 1,126 | |||
Unconditional purchase obligations, 2017 | 473 | |||
Unconditional purchase obligations, 2018 | 471 | |||
Unconditional purchase obligations, 2019 | 342 | |||
Unconditional purchase obligations, 2020 | 109 | |||
Unconditional purchase obligations, thereafter | 133 | |||
Unconditional purchase obligations, total | $ 2,654 | $ 915 |