In order to achieve this level of cost savings, HPE estimates cash funding payments between $1.0 billion to $1.3 billion over the next three years.
Fiscal Year 2020 Outlook
On April 6, 2020, HPE filed an 8K to withdraw fiscal year 2020 guidance due to increased level of uncertainty in which the global COVID-19 pandemic may adversely impact business operations, financial performance and results of operations. Consistent with that filing, HPE will not be providing fiscal year 2020 third quarter or full year guidance.
1Backlog represents the price of firm orders related to fiscal 2020 second quarter and prior quarters for which work has not been performed or goods have not been delivered as of April, 30 2020.
About Hewlett Packard Enterprise
Hewlett Packard Enterprise is the global edge-to-cloud platform-as-a-service company that helps organizations accelerate outcomes by unlocking value from all of their data, everywhere. Built on decades of reimagining the future and innovating to advance the way we live and work, HPE delivers unique, open and intelligent technology solutions, with a consistent experience across all clouds and edges, to help customers develop new business models, engage in new ways, and increase operational performance. For more information, visit: www.hpe.com.
Use of non-GAAP financial information
To supplement Hewlett Packard Enterprise’s condensed consolidated financial statement information presented on a generally accepted accounting principles (GAAP) basis, Hewlett Packard Enterprise provides revenue on a constant currency basis as well as non-GAAP gross profit margin, non-GAAP operating expense, non-GAAP operating profit (Non-GAAP earnings from operations), non-GAAP operating profit margin, non-GAAP income tax rate, non-GAAP net earnings, non-GAAP diluted net earnings per share, gross cash, free cash flow, net capital expenditures, net debt, net cash, operating company net debt and operating company net cash financial measures. Hewlett Packard Enterprise also provides forecasts of non-GAAP diluted net earnings per share and free cash flow. A reconciliation of adjustments to GAAP financial measures for this quarter and prior periods is included in the tables below or elsewhere in the materials accompanying this news release. In addition, an explanation of the ways in which Hewlett Packard Enterprise’s management uses these non-GAAP measures to evaluate its business, the substance behind Hewlett Packard Enterprise’s decision to use these non-GAAP measures, the material limitations associated with the use of these non-GAAP measures, the manner in which Hewlett Packard Enterprise’s management compensates for those limitations, and the substantive reasons why Hewlett Packard Enterprise’s management believes that these non-GAAP measures provide useful information to investors is included under “Use of non-GAAP financial measures” further below. This additional non-GAAP financial information is not meant to be considered in isolation or as a substitute for revenue, gross profit margin, operating profit (earnings from operations), operating profit margin, net earnings, diluted net earnings per share, cash, cash equivalents and restricted cash, cash flow from operations, investments in property, plant and equipment, or total company debt prepared in accordance with GAAP.
Forward-looking statements
This press release contains forward-looking statements that involve risks, uncertainties and assumptions. If the risks or uncertainties ever materialize or the assumptions prove incorrect, the results of Hewlett Packard Enterprise may differ materially from those expressed or implied by such forward-looking statements and assumptions. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including but not limited to the scope and duration of the novel coronavirus (“COVID-19”) pandemic and its impact on our business operations, liquidity and capital resources, employees, customers, supply chain, financial results and the world economy, any projections of revenue, margins, expenses, effective tax rates, the impact of the U.S. Tax Cuts and Jobs Act of 2017, net earnings, net earnings per share, cash flows, backlog, benefit plan funding, deferred tax assets, share repurchases, currency exchange rates or other financial items; any projections of the amount, timing or impact of cost savings, restructuring charges, or other transformation actions; any statements of the plans, strategies and objectives of management for future operations, as well as the execution of corporate transactions or contemplated acquisitions, transformation and restructuring plans and any resulting benefit, cost savings or restructuring charges, revenue or profitability improvements; any statements concerning the expected development, performance, market share or competitive performance relating to products or services; any statements regarding current or future macroeconomic trends or events and the impact of those trends and events on Hewlett Packard Enterprise and its financial performance; any statements regarding pending investigations, claims or disputes; any statements of expectation or belief; and any statements or assumptions underlying any of the foregoing.
Risks, uncertainties and assumptions include the need to address the many challenges facing Hewlett Packard Enterprise’s businesses; the competitive pressures faced by Hewlett Packard Enterprise’s businesses; risks associated with executing Hewlett Packard Enterprise’s strategy; the impact of macroeconomic and geopolitical trends and events; the need to manage third-party suppliers and the distribution of Hewlett Packard Enterprise’s products and the delivery of Hewlett Packard Enterprise’s services effectively; the protection of Hewlett Packard Enterprise’s intellectual property assets, including intellectual property licensed from third parties and intellectual property shared with its former Parent; risks associated with Hewlett Packard Enterprise’s international operations (including pandemics and public health problems, such as the outbreak of COVID-19); the development and transition of new products and services and the enhancement of existing products and services to meet customer needs and respond to emerging technological trends; the execution and performance of contracts by Hewlett Packard Enterprise and its suppliers, customers, clients and partners, including any impact thereon resulting from events such as the COVID-19 pandemic; the hiring and retention of key employees; execution, integration and other risks associated with business combination and investment transactions; and the execution, timing and results of any transformation or restructuring plans, including estimates and assumptions related to the cost (including any possible disruption of Hewlett Packard Enterprise's business) and the anticipated benefits of the transformation and restructuring plans; the effects of the U.S. Tax Cuts and Jobs Act and related guidance and regulations; the resolution of pending investigations, claims and disputes; and other risks that are described in Hewlett Packard Enterprise’s Annual Report on Form 10-K for the fiscal year ended October 31, 2019, subsequent Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K, as applicable.
As in prior periods, the financial information set forth in this press release, including tax-related items, reflects estimates based on information available at this time. While Hewlett Packard Enterprise believes these estimates to be reasonable, these amounts could differ materially from reported amounts in the Hewlett Packard Enterprise Quarterly Report on Form 10-Q for the second quarter ended April 30, 2020. Hewlett Packard Enterprise assumes no obligation and does not intend to update these forward-looking statements.
HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES |
||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS |
||||||||||||
(Unaudited) |
||||||||||||
(In millions, except per share amounts) |
||||||||||||
|
|
|||||||||||
|
Three months ended |
|||||||||||
|
April 30,
|
|
January 31,
|
|
April 30,
|
|||||||
Net revenue |
$ |
6,009 |
|
|
$ |
6,949 |
|
|
$ |
7,150 |
|
|
| Costs and expenses: |
|
|
|
|
|
|||||||
| Cost of sales |
|
4,095 |
|
|
|
4,667 |
|
|
|
4,845 |
|
|
| Research and development |
|
450 |
|
|
|
485 |
|
|
|
457 |
|
|
| Selling, general and administrative |
|
1,109 |
|
|
|
1,218 |
|
|
|
1,214 |
|
|
| Amortization of intangible assets |
|
84 |
|
|
|
120 |
|
|
|
69 |
|
|
| Impairment of goodwill (a) |
|
865 |
|
|
— |
|
|
— |
|
|||
| Transformation costs |
|
200 |
|
|
|
89 |
|
|
|
54 |
|
|
| Disaster charges (recovery) (b) |
|
22 |
|
|
— |
|
|
|
(7 |
) |
||
| Acquisition, disposition and other related charges |
|
18 |
|
|
|
22 |
|
|
|
84 |
|
|
| Total costs and expenses |
|
6,843 |
|
|
|
6,601 |
|
|
|
6,716 |
|
|
| (Loss) earnings from operations |
|
(834 |
) |
|
|
348 |
|
|
|
434 |
|
|
| Interest and other, net |
|
(68 |
) |
|
|
(19 |
) |
|
|
(18 |
) |
|
| Tax indemnification adjustments |
|
(35 |
) |
|
|
(21 |
) |
|
|
4 |
|
|
| Non-service net periodic benefit credit |
|
36 |
|
|
|
37 |
|
|
|
17 |
|
|
| (Loss) earnings from equity interests |
|
(10 |
) |
|
|
33 |
|
|
|
3 |
|
|
| (Loss) earnings before taxes |
|
(911 |
) |
|
|
378 |
|
|
|
440 |
|
|
| Benefit (provision) for taxes |
|
90 |
|
|
|
(45 |
) |
|
|
(21 |
) |
|
| Net (loss) earnings |
$ |
(821 |
) |
|
$ |
333 |
|
|
$ |
419 |
|
|
| Net (loss) earnings per share: |
|
|
|
|
|
|||||||
| Basic |
$ |
(0.64 |
) |
|
$ |
0.26 |
|
|
$ |
0.31 |
|
|
| Diluted (h) |
$ |
(0.64 |
) |
|
$ |
0.25 |
|
|
$ |
0.30 |
|
|
| Cash dividends declared per share |
$ |
0.1200 |
|
|
$ |
0.1200 |
|
|
$ |
0.1125 |
|
|
| Weighted-average shares used to compute net (loss) earnings per share: |
|
|
|
|
|
|||||||
| Basic |
|
1,291 |
|
|
|
1,300 |
|
|
|
1,367 |
|
|
| Diluted (h) |
|
1,291 |
|
|
|
1,315 |
|
|
|
1,382 |
|
|
|
|
|
|
|
|||||
| HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES |
||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS |
||||||||
| (Unaudited) |
||||||||
| (In millions, except per share amounts) |
||||||||
|
|
|
|||||||
|
|
Six months ended April 30, |
|||||||
|
|
2020 |
|
2019 |
|||||
| Net revenue |
$ |
12,958 |
|
|
$ |
14,703 |
|
|
| Costs and expenses: |
|
|
|
|||||
| Cost of sales |
|
8,762 |
|
|
|
10,052 |
|
|
| Research and development |
|
935 |
|
|
|
923 |
|
|
| Selling, general and administrative |
|
2,327 |
|
|
|
2,425 |
|
|
| Amortization of intangible assets |
|
204 |
|
|
|
141 |
|
|
| Impairment of goodwill (a) |
|
865 |
|
|
— |
|
||
| Transformation costs |
|
289 |
|
|
|
132 |
|
|
| Disaster charges (recovery) (b) |
|
22 |
|
|
|
(7 |
) |
|
| Acquisition, disposition and other related charges |
|
40 |
|
|
|
147 |
|
|
| Total costs and expenses |
|
13,444 |
|
|
|
13,813 |
|
|
| (Loss) earnings from operations |
|
(486 |
) |
|
|
890 |
|
|
| Interest and other, net |
|
(87 |
) |
|
|
(69 |
) |
|
| Tax indemnification adjustments |
|
(56 |
) |
|
|
223 |
|
|
| Non-service net periodic benefit credit |
|
73 |
|
|
|
33 |
|
|
| Earnings from equity interests |
|
23 |
|
|
|
18 |
|
|
| (Loss) earnings before taxes |
|
(533 |
) |
|
|
1,095 |
|
|
| Benefit (provision) for taxes |
|
45 |
|
|
|
(499 |
) |
|
| Net (loss) earnings |
$ |
(488 |
) |
|
$ |
596 |
|
|
| Net (loss) earnings per share: |
|
|
|
|||||
| Basic |
$ |
(0.38 |
) |
|
$ |
0.43 |
|
|
| Diluted (h) |
$ |
(0.38 |
) |
|
$ |
0.43 |
|
|
| Cash dividends declared per share |
$ |
0.2400 |
|
|
$ |
0.2250 |
|
|
| Weighted-average shares used to compute net (loss) earnings per share: |
|
|
|
|||||
| Basic |
|
1,295 |
|
|
|
1,384 |
|
|
| Diluted (h) |
|
1,295 |
|
|
|
1,397 |
|
|
| HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES |
||||||||||||||||||||||||
| RECONCILIATION OF GAAP TO NON-GAAP MEASURES |
||||||||||||||||||||||||
| (Unaudited) |
||||||||||||||||||||||||
| (In millions, except percentages and per share amounts) |
||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
|
Three months
|
|
Diluted net
|
|
Three months
|
|
Diluted net
|
|
Three months
|
|
Diluted net
|
|||||||||||||
| GAAP net (loss) earnings |
$ |
(821 |
) |
|
$ |
(0.64 |
) |
|
|
333 |
|
|
$ |
0.25 |
|
|
$ |
419 |
|
|
$ |
0.30 |
|
|
| Non-GAAP adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Amortization of initial direct costs |
|
3 |
|
|
— |
|
|
|
3 |
|
|
— |
|
|
— |
|
|
— |
|
|||||
| Amortization of intangible assets |
|
84 |
|
|
|
0.07 |
|
|
|
120 |
|
|
|
0.09 |
|
|
|
69 |
|
|
|
0.05 |
|
|
| Impairment of goodwill (a) |
|
865 |
|
|
|
0.67 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|||||
| Transformation costs |
|
200 |
|
|
|
0.15 |
|
|
|
89 |
|
|
|
0.07 |
|
|
|
54 |
|
|
|
0.04 |
|
|
| Disaster charges (recovery) (b) |
|
22 |
|
|
|
0.02 |
|
|
— |
|
|
— |
|
|
|
(7 |
) |
|
|
(0.01 |
) |
|||
| Acquisition, disposition and other related charges |
|
25 |
|
|
|
0.02 |
|
|
|
42 |
|
|
|
0.03 |
|
|
|
84 |
|
|
|
0.06 |
|
|
| Tax indemnification adjustments |
|
35 |
|
|
|
0.03 |
|
|
|
21 |
|
|
|
0.02 |
|
|
|
(4 |
) |
|
— |
|
||
| Non-service net periodic benefit credit |
|
(36 |
) |
|
|
(0.03 |
) |
|
|
(37 |
) |
|
|
(0.03 |
) |
|
|
(17 |
) |
|
|
(0.01 |
) |
|
| Loss from equity interests (c) |
|
37 |
|
|
|
0.03 |
|
|
|
37 |
|
|
|
0.03 |
|
|
|
38 |
|
|
|
0.03 |
|
|
| Adjustments for taxes |
$ |
(129 |
) |
|
|
(0.10 |
) |
|
|
(33 |
) |
|
|
(0.02 |
) |
|
|
(57 |
) |
|
|
(0.04 |
) |
|
| Non-GAAP net earnings |
$ |
285 |
|
|
$ |
0.22 |
|
|
$ |
575 |
|
|
$ |
0.44 |
|
|
$ |
579 |
|
|
$ |
0.42 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| GAAP (loss) earnings from operations |
$ |
(834 |
) |
|
|
|
$ |
348 |
|
|
|
|
$ |
434 |
|
|
|
|||||||
| Non-GAAP adjustments |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Amortization of initial direct costs |
|
3 |
|
|
|
|
|
3 |
|
|
|
|
— |
|
|
|
||||||||
| Amortization of intangible assets |
|
84 |
|
|
|
|
|
120 |
|
|
|
|
|
69 |
|
|
|
|||||||
| Impairment of goodwill (a) |
|
865 |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|||||||||
| Transformation costs |
|
200 |
|
|
|
|
|
89 |
|
|
|
|
|
54 |
|
|
|
|||||||
| Disaster charges (recovery) (b) |
|
22 |
|
|
|
|
— |
|
|
|
|
|
(7 |
) |
|
|
||||||||
| Acquisition, disposition and other related charges |
|
25 |
|
|
|
|
|
42 |
|
|
|
|
|
84 |
|
|
|
|||||||
| Non-GAAP earnings from operations |
$ |
365 |
|
|
|
|
$ |
602 |
|
|
|
|
$ |
634 |
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| GAAP operating profit margin |
|
(13.9 |
)% |
|
|
|
|
5.0 |
% |
|
|
|
|
6.1 |
% |
|
|
|||||||
| Non-GAAP adjustments |
|
20.0 |
% |
|
|
|
|
3.7 |
% |
|
|
|
|
2.8 |
% |
|
|
|||||||
| Non-GAAP operating profit margin |
|
6.1 |
% |
|
|
|
|
8.7 |
% |
|
|
|
|
8.9 |
% |
|
|
|||||||
| HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES |
|||||||||||||||
| RECONCILIATION OF GAAP TO NON-GAAP MEASURES |
|||||||||||||||
| (Unaudited) |
|||||||||||||||
| (In millions, except percentages and per share amounts) |
|||||||||||||||
|
|
|
|
|
|
|
||||||||||
|
|
Three months ended
|
|
Three months ended
|
|
Three months ended
|
||||||||||
| GAAP net revenue |
$ |
|
6,009 |
|
|
$ |
|
6,949 |
|
|
$ |
|
7,150 |
|
|
| GAAP cost of sales |
|
4,095 |
|
|
|
4,667 |
|
|
|
4,845 |
|
||||
| GAAP gross profit |
$ |
|
1,914 |
|
|
$ |
|
2,282 |
|
|
$ |
|
2,305 |
|
|
|
|
|
|
|
|
|
||||||||||
| Non-GAAP adjustments |
|
|
|
|
|
||||||||||
| Amortization of initial direct costs |
$ |
|
3 |
|
|
$ |
|
3 |
|
|
$ |
|
— |
|
|
| Acquisition, disposition and other related charges (d) |
|
7 |
|
|
|
20 |
|
|
— |
|
|||||
| Non-GAAP gross profit |
$ |
|
1,924 |
|
|
$ |
|
2,305 |
|
|
$ |
|
2,305 |
|
|
|
|
|
|
|
|
|
||||||||||
| GAAP gross profit margin |
|
31.9 |
% |
|
|
32.8 |
% |
|
|
32.2 |
% |
||||
| Non-GAAP adjustments |
|
0.1 |
% |
|
|
0.4 |
% |
|
— |
% |
|||||
| Non-GAAP gross profit margin |
|
32.0 |
% |
|
|
33.2 |
% |
|
|
32.2 |
% |
||||
|
|
|
|
|
|
|
||||||||||
| Net cash provided (used in) by operating activities |
$ |
|
100 |
|
|
$ |
|
(79 |
) |
|
$ |
|
987 |
|
|
| Investment in property, plant and equipment |
|
(591 |
) |
|
|
(568 |
) |
|
|
(799 |
) |
||||
| Proceeds from sale of property, plant and equipment |
|
89 |
|
|
|
462 |
|
|
|
214 |
|
||||
| Free cash flow |
$ |
|
(402 |
) |
|
$ |
|
(185 |
) |
|
$ |
|
402 |
|
|
| HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES |
||||||||||||||||
| RECONCILIATION OF GAAP TO NON-GAAP MEASURES |
||||||||||||||||
| (Unaudited) |
||||||||||||||||
| (In millions, except percentages and per share amounts) |
||||||||||||||||
|
|
Six months
|
|
Diluted net
|
|
Six months
|
|
Diluted net
|
|||||||||
| GAAP net (loss) earnings |
$ |
(488 |
) |
|
$ |
(0.38 |
) |
|
$ |
596 |
|
|
$ |
0.43 |
|
|
| Non-GAAP adjustments: |
|
|
|
|
|
|
|
|||||||||
| Amortization of initial direct costs |
|
6 |
|
|
— |
|
|
— |
|
|
— |
|
||||
| Amortization of intangible assets |
|
204 |
|
|
|
0.17 |
|
|
|
141 |
|
|
|
0.11 |
|
|
| Impairment of goodwill (a) |
|
865 |
|
|
|
0.67 |
|
|
— |
|
|
— |
|
|||
| Transformation costs |
|
289 |
|
|
|
0.22 |
|
|
|
132 |
|
|
|
0.09 |
|
|
| Disaster charges (recovery) (b) |
|
22 |
|
|
|
0.02 |
|
|
|
(7 |
) |
|
|
(0.01 |
) |
|
| Acquisition, disposition and other related charges |
|
67 |
|
|
|
0.05 |
|
|
|
147 |
|
|
|
0.11 |
|
|
| Tax indemnification adjustments |
|
56 |
|
|
|
0.04 |
|
|
|
(223 |
) |
|
|
(0.16 |
) |
|
| Non-service net periodic benefit credit |
|
(73 |
) |
|
|
(0.06 |
) |
|
|
(33 |
) |
|
|
(0.02 |
) |
|
| Loss from equity interests (c) |
|
74 |
|
|
|
0.06 |
|
|
|
76 |
|
|
|
0.05 |
|
|
| Adjustments for taxes |
|
(162 |
) |
|
|
(0.13 |
) |
|
|
340 |
|
|
|
0.24 |
|
|
| Non-GAAP net earnings |
$ |
860 |
|
|
$ |
0.66 |
|
|
$ |
1,169 |
|
|
$ |
0.84 |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
| GAAP (loss) earnings from operations |
$ |
(486 |
) |
|
|
|
$ |
890 |
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|||||||||
| Non-GAAP adjustments |
|
|
|
|
|
|
|
|||||||||
| Amortization of initial direct costs |
|
6 |
|
|
|
|
— |
|
|
|
||||||
| Amortization of intangible assets |
|
204 |
|
|
|
|
|
141 |
|
|
|
|||||
| Impairment of goodwill (a) |
|
865 |
|
|
|
|
— |
|
|
|
||||||
| Transformation costs |
|
289 |
|
|
|
|
|
132 |
|
|
|
|||||
| Disaster charges (recovery) (b) |
|
22 |
|
|
|
|
|
(7 |
) |
|
|
|||||
| Acquisition, disposition and other related charges |
|
67 |
|
|
|
|
|
147 |
|
|
|
|||||
| Non-GAAP earnings from operations |
$ |
967 |
|
|
|
|
$ |
1,303 |
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|||||||||
| GAAP operating profit margin |
|
(3.8 |
)% |
|
|
|
|
6.1 |
% |
|
|
|||||
| Non-GAAP adjustments |
|
11.3 |
% |
|
|
|
|
2.8 |
% |
|
|
|||||
| Non-GAAP operating profit margin |
|
7.5 |
% |
|
|
|
|
8.9 |
% |
|
|
|||||
| HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES |
||||||||
| RECONCILIATION OF GAAP TO NON-GAAP MEASURES |
||||||||
| (Unaudited) |
||||||||
| (In millions, except percentages and per share amounts) |
||||||||
|
|
|
|
|
|||||
|
|
Six months ended April
|
|
Six months ended April
|
|||||
| GAAP net revenue |
$ |
12,958 |
|
|
$ |
14,703 |
|
|
| GAAP cost of sales |
|
8,762 |
|
|
|
10,052 |
|
|
| GAAP gross profit |
$ |
4,196 |
|
|
$ |
4,651 |
|
|
|
|
|
|
|
|||||
| Non-GAAP adjustments |
|
|
|
|||||
| Amortization of initial direct costs |
$ |
6 |
|
|
$ |
— |
|
|
| Acquisition, disposition and other related charges (d) |
|
27 |
|
|
— |
|
||
| Non-GAAP gross profit |
$ |
4,229 |
|
|
$ |
4,651 |
|
|
|
|
|
|
|
|||||
| GAAP gross profit margin |
|
32.4 |
% |
|
|
31.6 |
% |
|
| Non-GAAP adjustments |
|
0.2 |
% |
|
— |
% |
||
| Non-GAAP gross profit margin |
|
32.6 |
% |
|
|
31.6 |
% |
|
|
|
|
|
|
|||||
| Net cash provided by operating activities |
$ |
21 |
|
|
$ |
1,369 |
|
|
| Investment in property, plant and equipment |
|
(1,159 |
) |
|
|
(1,528 |
) |
|
| Proceeds from sale of property, plant and equipment |
|
551 |
|
|
|
371 |
|
|
| Free cash flow |
$ |
(587 |
) |
|
$ |
212 |
|
|
| HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES |
||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS |
||||||||
| (Unaudited) |
||||||||
| (In millions, except par value) |
||||||||
|
|
|
|||||||
|
|
As of |
|||||||
|
|
April 30, 2020 |
|
October 31, 2019 |
|||||
| ASSETS |
|
|
|
|||||
| Current assets: |
|
|
|
|||||
| Cash and cash equivalents |
$ |
5,131 |
|
|
$ |
3,753 |
|
|
| Accounts receivable, net of allowance for doubtful accounts |
|
2,610 |
|
|
|
2,957 |
|
|
| Financing receivables, net of allowance for doubtful accounts |
|
3,630 |
|
|
|
3,572 |
|
|
| Inventory |
|
3,476 |
|
|
|
2,387 |
|
|
| Assets held for sale |
|
6 |
|
|
|
46 |
|
|
| Other current assets |
|
3,130 |
|
|
|
2,428 |
|
|
| Total current assets |
|
17,983 |
|
|
|
15,143 |
|
|
| Property, plant and equipment |
|
5,588 |
|
|
|
6,054 |
|
|
| Long-term financing receivables and other assets (e) |
|
10,295 |
|
|
|
8,918 |
|
|
| Investments in equity interests |
|
2,276 |
|
|
|
2,254 |
|
|
| Goodwill and intangible assets |
|
18,373 |
|
|
|
19,434 |
|
|
| Total assets |
$ |
54,515 |
|
|
$ |
51,803 |
|
|
| LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|||||
| Current liabilities: |
|
|
|
|||||
| Notes payable and short-term borrowings |
$ |
5,162 |
|
|
$ |
4,425 |
|
|
| Accounts payable |
|
5,482 |
|
|
|
5,595 |
|
|
| Employee compensation and benefits |
|
968 |
|
|
|
1,522 |
|
|
| Taxes on earnings |
|
202 |
|
|
|
186 |
|
|
| Deferred revenue |
|
3,268 |
|
|
|
3,234 |
|
|
| Accrued restructuring |
|
198 |
|
|
|
195 |
|
|
| Other accrued liabilities (e) |
|
4,917 |
|
|
|
4,002 |
|
|
| Total current liabilities |
|
20,197 |
|
|
|
19,159 |
|
|
| Long-term debt |
|
11,553 |
|
|
|
9,395 |
|
|
| Other non-current liabilities (e) |
|
6,507 |
|
|
|
6,100 |
|
|
| Stockholders’ equity |
|
|
|
|||||
| HPE stockholders’ equity: |
|
|
|
|||||
| Preferred stock, $0.01 par value (300 shares authorized; none issued) |
— |
|
|
— |
|
|||
| Common stock, $0.01 par value (9,600 shares authorized; 1,282 and 1,294 shares issued and outstanding at April 30, 2020 and October 31, 2019, respectively) |
|
13 |
|
|
|
13 |
|
|
| Additional paid-in capital |
|
28,207 |
|
|
|
28,444 |
|
|
| Accumulated deficit (f) |
|
(8,385 |
) |
|
|
(7,632 |
) |
|
| Accumulated other comprehensive loss (f) |
|
(3,625 |
) |
|
|
(3,727 |
) |
|
| Total HPE stockholders’ equity |
|
16,210 |
|
|
|
17,098 |
|
|
| Non-controlling interests |
|
48 |
|
|
|
51 |
|
|
| Total stockholders’ equity |
|
16,258 |
|
|
|
17,149 |
|
|
| Total liabilities and stockholders’ equity |
$ |
54,515 |
|
|
$ |
51,803 |
|
|
| HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES |
||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
||||||||
| (Unaudited) |
||||||||
| (In millions) |
||||||||
|
|
Three months ended
|
|
Six months ended
|
|||||
| Cash flows from operating activities: |
|
|
|
|||||
| Net loss |
$ |
(821 |
) |
|
$ |
(488 |
) |
|
| Adjustments to reconcile net earnings to net cash provided by operating activities: |
|
|
|
|||||
| Depreciation and amortization |
|
641 |
|
|
|
1,331 |
|
|
| Impairment of goodwill |
|
865 |
|
|
|
865 |
|
|
| Stock-based compensation expense |
|
67 |
|
|
|
160 |
|
|
| Provision for doubtful accounts and inventory |
|
87 |
|
|
|
128 |
|
|
| Restructuring charges |
|
164 |
|
|
|
248 |
|
|
| Deferred taxes on earnings |
|
(75 |
) |
|
|
(103 |
) |
|
| Loss (earnings) from equity interests |
|
10 |
|
|
|
(23 |
) |
|
| Other, net |
|
44 |
|
|
|
8 |
|
|
| Changes in operating assets and liabilities, net of acquisitions: |
|
|
|
|||||
| Accounts receivable |
|
241 |
|
|
|
323 |
|
|
| Financing receivables |
|
31 |
|
|
|
(73 |
) |
|
| Inventory |
|
(992 |
) |
|
|
(1,196 |
) |
|
| Accounts payable |
|
177 |
|
|
|
(73 |
) |
|
| Taxes on earnings |
|
(98 |
) |
|
|
(125 |
) |
|
| Restructuring |
|
(157 |
) |
|
|
(244 |
) |
|
| Other assets and liabilities |
|
(84 |
) |
|
|
(717 |
) |
|
| Net cash provided by operating activities |
|
100 |
|
|
|
21 |
|
|
| Cash flows from investing activities: |
|
|
|
|||||
| Investment in property, plant and equipment |
|
(591 |
) |
|
|
(1,159 |
) |
|
| Proceeds from sale of property, plant and equipment |
|
89 |
|
|
|
551 |
|
|
| Purchases of available-for-sale securities and other investments |
|
(14 |
) |
|
|
(73 |
) |
|
| Maturities and sales of available-for-sale securities and other investments |
|
20 |
|
|
|
28 |
|
|
| Financial collateral posted |
|
(3 |
) |
|
|
(51 |
) |
|
| Financial collateral received |
|
466 |
|
|
|
613 |
|
|
| Payments made in connection with business acquisitions, net of cash acquired |
|
(7 |
) |
|
|
(13 |
) |
|
| Net cash used in investing activities |
|
(40 |
) |
|
|
(104 |
) |
|
| Cash flows from financing activities: |
|
|
|
|||||
| Short-term borrowings with original maturities less than 90 days, net |
|
(45 |
) |
|
|
82 |
|
|
| Proceeds from debt, net of issuance costs |
|
3,225 |
|
|
|
3,565 |
|
|
| Payment of debt |
|
(481 |
) |
|
|
(931 |
) |
|
| Net proceeds related to stock-based award activities |
|
(4 |
) |
|
|
(47 |
) |
|
| Repurchase of common stock |
|
(151 |
) |
|
|
(355 |
) |
|
| Cash dividends paid to non-controlling interests |
|
(8 |
) |
|
|
(8 |
) |
|
| Contributions from non-controlling interests |
— |
|
|
|
1 |
|
||
| Cash dividends paid |
|
(154 |
) |
|
|
(310 |
) |
|
| Net cash provided by financing activities |
|
2,382 |
|
|
|
1,997 |
|
|
| Increase in cash, cash equivalents and restricted cash |
|
2,442 |
|
|
|
1,914 |
|
|
| Cash, cash equivalents and restricted cash at beginning of period |
|
3,548 |
|
|
|
4,076 |
|
|
| Cash, cash equivalents and restricted cash at end of period |
$ |
5,990 |
|
|
$ |
5,990 |
|
|
| HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES |
||||||||||||
| SEGMENT INFORMATION |
||||||||||||
| (Unaudited) |
||||||||||||
| (In millions) |
||||||||||||
|
|
|
|
||||||||||
|
|
|
Three months ended |
||||||||||
|
|
|
April 30,
|
|
January 31,
|
|
April 30,
|
||||||
| Net revenue: (g) |
|
|
|
|
|
|
||||||
| Compute |
|
$ |
2,640 |
|
|
$ |
3,011 |
|
|
$ |
3,318 |
|
| HPC & MCS |
|
|
589 |
|
|
|
823 |
|
|
|
721 |
|
| Storage |
|
|
1,086 |
|
|
|
1,250 |
|
|
|
1,318 |
|
| A & PS |
|
|
237 |
|
|
|
243 |
|
|
|
260 |
|
| Intelligent Edge |
|
|
665 |
|
|
|
720 |
|
|
|
685 |
|
| Financial Services |
|
|
833 |
|
|
|
859 |
|
|
|
896 |
|
| Corporate Investments |
|
|
124 |
|
|
|
121 |
|
|
|
125 |
|
| Total segment net revenue |
|
|
6,174 |
|
|
|
7,027 |
|
|
|
7,323 |
|
| Elimination of intersegment net revenue |
|
|
(165 |
) |
|
|
(78 |
) |
|
|
(173 |
) |
| Total Hewlett Packard Enterprise consolidated net revenue |
|
$ |
6,009 |
|
|
$ |
6,949 |
|
|
$ |
7,150 |
|
|
|
|
|
|
|
|
|
||||||
| Earnings before taxes: (g) |
|
|
|
|
|
|
||||||
| Compute |
|
$ |
125 |
|
|
$ |
286 |
|
|
$ |
307 |
|
| HPC & MCS |
|
|
33 |
|
|
|
49 |
|
|
|
92 |
|
| Storage |
|
|
145 |
|
|
|
226 |
|
|
|
244 |
|
| A & PS |
|
|
2 |
|
|
|
(2 |
) |
|
|
(14 |
) |
| Intelligent Edge |
|
|
73 |
|
|
|
70 |
|
|
|
36 |
|
| Financial Services |
|
|
75 |
|
|
|
73 |
|
|
|
77 |
|
| Corporate Investments |
|
|
(28 |
) |
|
|
(27 |
) |
|
|
(29 |
) |
| Total segment earnings from operations |
|
|
425 |
|
|
|
675 |
|
|
|
713 |
|
|
|
|
|
|
|
|
|
||||||
| Unallocated corporate costs and eliminations |
|
|
(48 |
) |
|
|
(52 |
) |
|
|
(64 |
) |
| Unallocated stock-based compensation expense |
|
|
(12 |
) |
|
|
(21 |
) |
|
|
(15 |
) |
| Amortization of initial direct costs |
|
|
(3 |
) |
|
|
(3 |
) |
|
— |
|
|
| Amortization of intangible assets |
|
|
(84 |
) |
|
|
(120 |
) |
|
|
(69 |
) |
| Impairment of goodwill (a) |
|
|
(865 |
) |
|
— |
|
|
— |
|
||
| Transformation costs |
|
|
(200 |
) |
|
|
(89 |
) |
|
|
(54 |
) |
| Disaster (charges) recovery (b) |
|
|
(22 |
) |
|
— |
|
|
|
7 |
|
|
| Acquisition, disposition and other related charges |
|
|
(25 |
) |
|
|
(42 |
) |
|
|
(84 |
) |
| Interest and other, net |
|
|
(68 |
) |
|
|
(19 |
) |
|
|
(18 |
) |
| Tax indemnification adjustments |
|
|
(35 |
) |
|
|
(21 |
) |
|
|
4 |
|
| Non-service net periodic benefit credit |
|
|
36 |
|
|
|
37 |
|
|
|
17 |
|
| (Loss) earnings from equity interests |
|
|
(10 |
) |
|
|
33 |
|
|
|
3 |
|
| Total Hewlett Packard Enterprise consolidated (loss) earnings before taxes |
|
$ |
(911 |
) |
|
$ |
378 |
|
|
$ |
440 |
|
|
|
|
|
|
|
||||||
| HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES |
||||||||||
| SEGMENT INFORMATION |
||||||||||
| (Unaudited) |
||||||||||
| (In millions) |
||||||||||
|
|
|
|
||||||||
|
|
|
Six months ended April 30, |
||||||||
|
|
|
|
2020 |
|
|
2019 |
||||
| Net revenue: (g) |
|
|
|
|
||||||
| Compute |
|
$ |
|
5,651 |
|
|
$ |
|
6,893 |
|
| HPC & MCS |
|
|
1,412 |
|
|
|
1,500 |
|
||
| Storage |
|
|
2,336 |
|
|
|
2,674 |
|
||
| A & PS |
|
|
480 |
|
|
|
501 |
|
||
| Intelligent Edge |
|
|
1,385 |
|
|
|
1,390 |
|
||
| Financial Services |
|
|
1,692 |
|
|
|
1,815 |
|
||
| Corporate Investments |
|
|
245 |
|
|
|
243 |
|
||
| Total segment net revenue |
|
|
13,201 |
|
|
|
15,016 |
|
||
| Elimination of intersegment net revenue |
|
|
(243 |
) |
|
|
(313 |
) |
||
| Total Hewlett Packard Enterprise consolidated net revenue |
|
$ |
|
12,958 |
|
|
$ |
|
14,703 |
|
|
|
|
|
|
|
||||||
| Earnings before taxes: (g) |
|
|
|
|
||||||
| Compute |
|
|
411 |
|
|
|
647 |
|
||
| HPC & MCS |
|
|
82 |
|
|
|
190 |
|
||
| Storage |
|
|
371 |
|
|
|
498 |
|
||
| A & PS |
|
— |
|
|
|
(46 |
) |
|||
| Intelligent Edge |
|
|
143 |
|
|
|
60 |
|
||
| Financial Services |
|
|
148 |
|
|
|
154 |
|
||
| Corporate Investments |
|
|
(55 |
) |
|
|
(57 |
) |
||
| Total segment earnings from operations |
|
|
1,100 |
|
|
|
1,446 |
|
||
|
|
|
|
|
|
||||||
| Unallocated corporate costs and eliminations |
|
|
(100 |
) |
|
|
(114 |
) |
||
| Unallocated stock-based compensation expense |
|
|
(33 |
) |
|
|
(29 |
) |
||
| Amortization of initial direct costs |
|
|
(6 |
) |
|
— |
|
|||
| Amortization of intangible assets |
|
|
(204 |
) |
|
|
(141 |
) |
||
| Impairment of goodwill (a) |
|
|
(865 |
) |
|
— |
|
|||
| Transformation costs |
|
|
(289 |
) |
|
|
(132 |
) |
||
| Disaster (charges) recovery (b) |
|
|
(22 |
) |
|
|
7 |
|
||
| Acquisition, disposition and other related charges |
|
|
(67 |
) |
|
|
(147 |
) |
||
| Interest and other, net |
|
|
(87 |
) |
|
|
(69 |
) |
||
| Tax indemnification adjustments |
|
|
(56 |
) |
|
|
223 |
|
||
| Non-service net periodic benefit credit |
|
|
73 |
|
|
|
33 |
|
||
| Earnings from equity interests |
|
|
23 |
|
|
|
18 |
|
||
| Total Hewlett Packard Enterprise consolidated (loss) earnings before taxes |
|
$ |
|
(533 |
) |
|
$ |
|
1,095 |
|
| HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES |
||||||||||||||||||
| SEGMENT INFORMATION |
||||||||||||||||||
| (Unaudited) |
||||||||||||||||||
| (In millions, except percentages) |
||||||||||||||||||
|
|
|
|
|
|||||||||||||||
|
|
Three months ended |
|
Change (%) |
|||||||||||||||
|
|
April 30,
|
|
January 31,
|
|
April 30,
|
|
Q/Q |
|
Y/Y |
|||||||||
| Net revenue: (g) |
|
|
|
|
|
|
|
|
|
|||||||||
| Compute |
$ |
2,640 |
|
|
$ |
3,011 |
|
|
$ |
3,318 |
|
|
(12 |
%) |
|
(20 |
%) |
|
| HPC & MCS |
|
589 |
|
|
|
823 |
|
|
|
721 |
|
|
(28 |
%) |
|
(18 |
%) |
|
| Storage |
|
1,086 |
|
|
|
1,250 |
|
|
|
1,318 |
|
|
(13 |
%) |
|
(18 |
%) |
|
| A & PS |
|
237 |
|
|
|
243 |
|
|
|
260 |
|
|
(2 |
%) |
|
(9 |
%) |
|
| Intelligent Edge |
|
665 |
|
|
|
720 |
|
|
|
685 |
|
|
(8 |
%) |
|
(3 |
%) |
|
| Financial Services |
|
833 |
|
|
|
859 |
|
|
|
896 |
|
|
(3 |
%) |
|
(7 |
%) |
|
| Corporate Investments |
|
124 |
|
|
|
121 |
|
|
|
125 |
|
|
2 |
% |
|
(1 |
%) |
|
| Total segment net revenue |
|
6,174 |
|
|
|
7,027 |
|
|
|
7,323 |
|
|
(12 |
%) |
|
(16 |
%) |
|
| Elimination of intersegment net revenue |
|
(165 |
) |
|
|
(78 |
) |
|
|
(173 |
) |
|
112 |
% |
|
(5 |
%) |
|
| Total Hewlett Packard Enterprise consolidated net revenue |
$ |
6,009 |
|
|
$ |
6,949 |
|
|
$ |
7,150 |
|
|
(14 |
%) |
|
(16 |
%) |
|
|
|
|
|
|
|
|
||||||
|
|
Six months ended April 30, |
||||||||||
|
|
2020 |
|
2019 |
|
Y/Y |
||||||
| Net revenue: (g) |
|
|
|
|
|
||||||
| Compute |
$ |
5,651 |
|
|
$ |
6,893 |
|
|
(18 |
%) |
|
| HPC & MCS |
|
1,412 |
|
|
|
1,500 |
|
|
(6 |
%) |
|
| Storage |
|
2,336 |
|
|
|
2,674 |
|
|
(13 |
%) |
|
| A&PS |
|
480 |
|
|
|
501 |
|
|
(4 |
%) |
|
| Intelligent Edge |
|
1,385 |
|
|
|
1,390 |
|
|
— |
% |
|
| Financial Services |
|
1,692 |
|
|
|
1,815 |
|
|
(7 |
%) |
|
| Corporate Investments |
|
245 |
|
|
|
243 |
|
|
1 |
% |
|
| Total segment net revenue |
|
13,201 |
|
|
|
15,016 |
|
|
(12 |
%) |
|
| Elimination of intersegment net revenue |
|
(243 |
) |
|
|
(313 |
) |
|
(22 |
%) |
|
| Total Hewlett Packard Enterprise consolidated net revenue |
$ |
12,958 |
|
|
$ |
14,703 |
|
|
(12 |
%) |
|
| HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES |
|||||||
| SEGMENT OPERATING MARGIN SUMMARY DATA |
|||||||
| (Unaudited) |
|||||||
|
|
|
|
|
|
|||
|
|
|
Three months ended |
|
Change in Operating
|
|||
|
|
|
April 30, 2020 |
|
Q/Q |
|
Y/Y |
|
| Segment operating profit margin: (g) |
|
|
|
|
|
|
|
| Compute |
|
4.7 |
% |
|
-4.8 pts. |
|
-4.6 pts. |
| HPC & MCS |
|
5.6 |
% |
|
-0.4 pts. |
|
-7.2 pts. |
| Storage |
|
13.4 |
% |
|
-4.7 pts. |
|
-5.1 pts. |
| A & PS |
|
0.8 |
% |
|
1.6 pts. |
|
6.2 pts. |
| Intelligent Edge |
|
11.0 |
% |
|
1.3 pts. |
|
5.7 pts. |
| Financial Services |
|
9.0 |
% |
|
0.5 pts. |
|
0.4 pts. |
| Corporate Investments |
|
(22.6 |
)% |
|
-0.3 pts. |
|
0.6 pts. |
| Total segment operating profit margin |
|
6.9 |
% |
|
-2.7 pts. |
|
-2.8 pts. |
| HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES |
||||||||||||
| CALCULATION OF DILUTED NET EARNINGS (LOSS) PER SHARE |
||||||||||||
| (Unaudited) |
||||||||||||
| (In millions, except per share amounts) |
||||||||||||
|
|
|
|||||||||||
|
|
Three months ended |
|||||||||||
|
|
April 30,
|
|
January 31,
|
|
April 30,
|
|||||||
| Numerator: |
|
|
|
|
|
|||||||
| GAAP net (loss) earnings |
$ |
(821 |
) |
|
$ |
333 |
|
|
$ |
419 |
|
|
| Non-GAAP net earnings |
$ |
285 |
|
|
$ |
575 |
|
|
$ |
579 |
|
|
|
|
|
|
|
|
|
|||||||
| Denominator: |
|
|
|
|
|
|||||||
| Weighted-average shares used to compute basic net (loss) earnings per share |
|
1,291 |
|
|
|
1,300 |
|
|
|
1,367 |
|
|
| Dilutive effect of employee stock plans (h) |
|
7 |
|
|
|
15 |
|
|
15 |
|||
| Weighted-average shares used to compute diluted net (loss) earnings per share |
|
1,298 |
|
|
|
1,315 |
|
|
|
1,382 |
|
|
|
|
|
|
|
|
|
|||||||
| GAAP net (loss) earnings per share |
|
|
|
|
|
|||||||
| Basic |
$ |
(0.64 |
) |
|
$ |
0.26 |
|
|
$ |
0.31 |
|
|
| Diluted (h) |
$ |
(0.64 |
) |
|
$ |
0.25 |
|
|
$ |
0.30 |
|
|
|
|
|
|
|
|
|
|||||||
| Non-GAAP net earnings per share |
|
|
|
|
|
|||||||
| Basic |
$ |
0.22 |
|
|
$ |
0.44 |
|
|
$ |
0.42 |
|
|
| Diluted (h) |
$ |
0.22 |
|
|
$ |
0.44 |
|
|
$ |
0.42 |
|
|
|
|
Six months ended April 30, |
|||||||
|
|
2020 |
|
2019 |
|||||
| Numerator: |
|
|
|
|||||
| GAAP net (loss) earnings |
$ |
(488 |
) |
|
$ |
596 |
|
|
| Non-GAAP net earnings |
$ |
860 |
|
|
$ |
1,169 |
|
|
|
|
|
|
|
|||||
| Denominator: |
|
|
|
|||||
| Weighted-average shares used to compute basic net (loss) earnings per share |
|
1,295 |
|
|
|
1,384 |
|
|
| Dilutive effect of employee stock plans (h) |
|
11 |
|
|
|
13 |
||
| Weighted-average shares used to compute diluted net (loss) earnings per share |
|
1,306 |
|
|
|
1,397 |
|
|
|
|
|
|
|
|||||
| GAAP net earnings (loss) per share |
|
|
|
|||||
| Basic |
$ |
(0.38 |
) |
|
$ |
0.43 |
|
|
| Diluted (h) |
$ |
(0.38 |
) |
|
$ |
0.43 |
|
|
|
|
|
|
|
|||||
| Non-GAAP net earnings per share |
|
|
|
|||||
| Basic |
$ |
0.66 |
|
|
$ |
0.84 |
|
|
| Diluted (h) |
$ |
0.66 |
|
|
$ |
0.84 |
|
|
| (a) |
The Company recorded $865 million of partial goodwill impairment charge in the second quarter of fiscal 2020 as it was determined that the fair value of the HPC & MCS reporting unit was below the carrying value of its net assets. |
|
|
|
|
|
| (b) |
Disaster charges (recovery) for the three and six months ended April 30, 2020 primarily include direct costs resulting from COVID-19, as a result of HPE hosted, co-hosted, or sponsored event cancellations and shift to a virtual format. For the three and six months ended April 30, 2019, represents insurance recoveries in relation to damage to our facilities in Houston, Texas due to Hurricane Harvey in fiscal 2017. |
|
|
|
|
|
| (c) |
Represents the amortization of basis difference adjustments related to the H3C divestiture. |
|
|
|
|
|
| (d) |
For the periods presented, amounts represent Acquisition, disposition and other related charges related to a non-cash inventory fair value adjustment in connection with the acquisition of Cray, Inc., which was included in Cost of Sales. |
|
|
|
|
|
| (e) |
The Company adopted the new accounting standard for leases in the first quarter of fiscal 2020 which requires lessees to recognize a lease liability and a right-of-use (“ROU”) asset for the lease term. The Company elected the modified retrospective transition method whereby prior comparative periods are not restated. Adoption of the new lease standard resulted in the recognition of $1.0 billion of ROU assets and $1.1 billion of lease liabilities on the Company’s Condensed Consolidated Balance Sheet at November 1, 2019. |
|
|
|
|
|
| (f) |
The Company adopted an accounting standard update in the first quarter of fiscal 2020 that allowed it to reclassify $43 million of stranded tax effects resulting from U.S. tax reform from accumulated other comprehensive loss into accumulated deficit. |
|
|
|
|
|
| (g) |
Effective at the beginning of the first quarter of fiscal 2020, Hewlett Packard Enterprise Company ("HPE") implemented certain organizational changes to align its segment financial reporting more closely with its current business structure. As a result of these organizational changes, HPE replaced the Hybrid IT reportable segment (and the Compute, Storage and HPE Pointnext business units within it) with four new financial reporting segments: Compute, High Performance Compute & Mission-Critical Systems ("HPC & MCS"), Storage, and Advisory and Profession Services ("A & PS"). |
|
|
|
|
|
|
|
In addition, the Intelligent Edge segment now includes the Data Center Networking ("DC Networking") operational services business that was previously a part of the Hybrid IT Segment. The DC Networking business, other than operational services, had been transferred to the Intelligent Edge segment in a prior realignment. |
|
|
|
|
|
|
|
The Company reflected these changes to its segment information retrospectively to the earliest period presented, which primarily resulted in the transfer of net revenue and operating profit for each of the businesses as described above. These changes had no impact on Hewlett Packard Enterprise’s previously reported consolidated net revenue, net earnings or net earnings per share ("EPS"). |
|
|
|
|
|
| (h) |
Diluted net earnings per share reflects any dilutive effect of restricted stock awards, stock options and performance-based awards, but the effect is excluded when calculating GAAP diluted net (loss) per share because it would be anti-dilutive. |
