HPE Reports Fiscal 2017 Full-Year and Fourth Quarter Results

Effective at the beginning of the first quarter of fiscal 2017, the Company implemented organizational changes to align its segment financial reporting more closely with its current business structure. These organizational changes resulted in: (i) within the Enterprise Group segment, primarily, the transfer of the big data storage product group previously reported within the Servers business unit to the Storage business unit; the transfer of the Aruba services capabilities previously reported within the Networking business unit to the Technology Services business unit; and (ii) the transfer of the CMS product group previously reported within the former ES segment to the Technology Services business unit within the Enterprise Group segment.

The Company reflected these changes to its segment information retrospectively to the earliest period presented, which resulted in: (i) within the Enterprise Group segment, primarily, the transfer of net revenue from the big data storage product group previously reported within the Servers business unit to the Storage business unit; the transfer of net revenue from the Aruba services capabilities previously reported within the Networking business unit to the Technology Services business unit; and (ii) the transfer of net revenue, related eliminations of intersegment revenues and operating profit from the CMS product group previously reported within the former ES segment to the Technology Services business unit within the Enterprise Group segment.

Effective at the beginning of the second quarter of fiscal 2017 and prior to the completion of the spin-off of the enterprise services business, Everett SpinCo, Inc., and the merger of Everett SpinCo, Inc. with Computer Sciences Corporation, the Company transferred historical net revenue and operating profit from the previously divested MphasiS product group which was reported within the former ES segment to the Corporate Investments segment.

The changes within the Enterprise Group segment had no impact on Hewlett Packard Enterprise’s previously reported Enterprise Group segment net revenue and earnings from operations. The change between former ES segment and the Enterprise Group segment had no impact on Hewlett Packard Enterprise's previously reported consolidated net revenue, earnings from continuing operations, net earnings from continuing operations or net earnings per share from continuing operations.

For the periods prior to the completion of the Everett and Seattle Transactions respectively, the amounts include the elimination of pre-separation intercompany sales to the former ES and Software segments, which are included within Net earnings (loss) from discontinued operations in the Consolidated Statements of Earnings.

Represents amounts in connection with the HPE Next initiative and includes costs related to labor and non-labor restructuring, program management and IT charges, partially offset by an adjustment related to the gain on sale of real estate.

Represents amounts in connection with damages sustained by the Company as a result of Hurricane Harvey.

Represents adjustment to net periodic pension cost resulting from remeasurements of the Hewlett Packard Enterprise pension plans in connection with the spin-off of the software business, Seattle SpinCo, Inc., and the merger of Seattle SpinCo, Inc. with Micro Focus International plc and the spin-off of the enterprise services business, Everett SpinCo, Inc., and the merger of Everett SpinCo, Inc. with Computer Sciences Corporation.

Represents the Company’s ownership interest in the net earnings of equity method investments, primarily H3C.

HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES SEGMENT/BUSINESS UNIT INFORMATION (Unaudited) (In millions, except percentages)

	Three months ended									Change (%)
	October 31, 2017			July 31, 2017			October 31, 2016			Q/Q		Y/Y
Net revenue:^(a)
Enterprise Group
Servers	$	3,282		$	3,298		$	3,463		—	%	(5	%)
Technology Services	2,021			1,947			1,974			4	%	2	%
Storage	871			844			827			3	%	5	%
Networking	678			702			559			(3	%)	21	%
Total Enterprise Group	6,852			6,791			6,823			1	%	—	%

Financial Services	1,010			897			814			13	%	24	%
Corporate Investments	3			—			58			—		(95	%)
Total segment net revenue	7,865			7,688			7,695			2	%	2	%

Elimination of intersegment net revenue and other ^(b)	(205		)	(187		)	(371		)	10	%	(45	%)
Total Hewlett Packard Enterprise consolidated net revenue	$	7,660		$	7,501		$	7,324		2	%	5	%

As of April 1, 2017, with the spin-off of the enterprise services business, Everett SpinCo, Inc., and the merger of Everett SpinCo, Inc. with Computer Sciences Corporation, and as of September 1, 2017, with the spin-off of the software business, Seattle SpinCo, Inc., and the merger of Seattle SpinCo, Inc. with Micro Focus, the Company reclassified the historical net (loss) earnings from the former enterprise services segment ("former ES segment"), and the former software segment ("former software segment"), to Net earnings (loss) from discontinued operations in its Consolidated Statements of Earnings.

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