(b) 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.
(c) Represents the settlement of certain pre-separation Hewlett-Packard Company income tax liabilities indemnified through the Tax Matters Agreement with HP Inc.
(d) Includes tax amounts in connection with the spin-off of the enterprise services business, Everett SpinCo, Inc. and the software business, Seattle SpinCo, Inc., tax amounts related to U.S. tax reform, tax amounts related to the settlement of certain pre-separation Hewlett-Packard Company income tax liabilities indemnified through the Tax Matters Agreement with HP Inc., and excess tax benefits associated with stock-based compensation, following the adoption of ASU 2016-09 in the first quarter of fiscal 2018.
For the three months ended April 30, 2018, this amount primarily includes a $1.1 billion benefit following the closure of pre-separation Hewlett-Packard Company audits for fiscal years 2009 through 2012 in connection with the settlement of certain pre-separation Hewlett-Packard Company income tax liabilities indemnified through the Tax Matters Agreement with HP Inc., and $28 million of excess tax benefits from stock-based compensation, partially offset by $140 million of tax expense as a result of U.S. tax reform.
In connection with the spin-off of the enterprise services business, Everett SpinCo, Inc., for the three months ended July 31, 2017, this amount includes a $189 million benefit primarily from income tax benefits on deferred losses.
|
HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited) (In millions, except per share amounts) | |||||||
| Nine Months Ended July 31, | |||||||
| 2018 | 2017 | ||||||
| Net revenue | $ | 22,906 | $ | 21,211 | |||
| Costs and expenses: | |||||||
| Cost of sales | 16,071 | 14,794 | |||||
| Research and development | 1,224 | 1,122 | |||||
| Selling, general and administrative | 3,632 | 3,718 | |||||
| Amortization of intangible assets | 222 | 235 | |||||
| Restructuring charges | 14 | 304 | |||||
| Transformation costs(a) | 499 | 31 | |||||
| Acquisition and other related charges | 70 | 150 | |||||
| Separation costs | — | 46 | |||||
| Defined benefit plan settlement charges and remeasurement (benefit)(b) | — | (38 | ) | ||||
| Total costs and expenses | 21,732 | 20,362 | |||||
| Earnings from continuing operations | 1,174 | 849 | |||||
| Interest and other, net | (163 | ) | (251 | ) | |||
| Tax indemnification adjustments(c) | (1,342 | ) | (1 | ) | |||
| Earnings (loss) from equity interests | 23 | (24 | ) | ||||
| (Loss) earnings from continuing operations before taxes | (308 | ) | 573 | ||||
| Benefit (provision) for taxes(d) | 3,092 | (515 | ) | ||||
| Net earnings from continuing operations | 2,784 | 58 | |||||
| Net loss from discontinued operations | (119 | ) | (238 | ) | |||
| Net earnings (loss) | $ | 2,665 | $ | (180 | ) | ||
| Net earnings (loss) per share: | |||||||
| Basic | |||||||
| Continuing operations | $ | 1.79 | $ | 0.04 | |||
| Discontinued operations | (0.07 | ) | (0.15 | ) | |||
| Total basic net earnings (loss) per share | $ | 1.72 | $ | (0.11 | ) | ||
| Diluted | |||||||
| Continuing operations | $ | 1.76 | $ | 0.03 | |||
| Discontinued operations | (0.07 | ) | (0.14 | ) | |||
| Total diluted net earnings (loss) per share | $ | 1.69 | $ | (0.11 | ) | ||
| Cash dividends declared per share | $ | 0.3750 | $ | 0.2600 | |||
| Weighted-average shares used to compute net earnings (loss) per share: | |||||||
| Basic | 1,552 | 1,656 | |||||
| Diluted | 1,578 | 1,683 | |||||
(a) Represents amounts in connection with the HPE Next initiative and primarily includes costs related to labor and non-labor restructuring, program management and IT charges, partially offset by the gain on sale of real estate.
