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HPE Reports Fiscal 2019 Fourth Quarter and Full-Year Results

SAN JOSE, Calif.--(BUSINESS WIRE)--

Delivers strong profitability and free cash flow

Q4 2019 Financial Highlights:

  • Revenue: $7.2 billion, stable for the last three quarters
  • Gross margins: GAAP of 33.2%, up 250 basis points from the prior-year period and Non-GAAP of 33.3%, up 260 basis points from the prior-year period
  • Diluted net earnings per share from continuing operations:
    • GAAP of $0.36, compared to ($0.53) from the prior-year period and above the previously provided outlook of $0.24 to $0.28 per share
    • Non-GAAP of $0.49, up 14% from the prior-year period EPS and above the previously provided outlook of $0.43 to $0.47 per share

Fiscal 2019 Full-Year Financial Highlights

  • Revenue: $29.1 billion
  • Gross margins: GAAP and Non-GAAP of 32.6%, up 270 basis points from the prior-year period
  • Diluted net earnings per share from continuing operations:
    • GAAP of $0.77, down 41% from the prior-year period due primarily to a one-time arbitration award payment of $668 million to DXC, but in-line with the 2018 Securities Analyst Meeting outlook of $0.73 to $0.83 per share
    • Non-GAAP $1.77, up 20% from the prior-year period and above the 2018 Securities Analyst Meeting outlook of $1.51 to $1.61 per share
  • Cash flow from operations: $4.0 billion, up 35% from the prior-year period
  • Free cash flow: $1.7 billion, up 58% from the prior-year period
  • Capital return to shareholders: $2.9 billion in the form of share repurchases and dividends

Outlook:

  • Fiscal 2020 First quarter: Estimates GAAP diluted net earnings per share to be in the range of $0.20 to $0.24 and non-GAAP diluted net EPS to be in the range of $0.42 to $0.46
  • Fiscal 2020 earnings per share: Maintains GAAP diluted net earnings per share outlook of $1.01 to $1.17 and non-GAAP diluted net earnings per share outlook of $1.78 to $1.94
  • Fiscal 2020 free cash flow1: Reiterates free cash flow guidance of $1.9 to $2.1 billion

Hewlett Packard Enterprise (HPE) today announced financial results for its fiscal 2019 and the fourth quarter, ended October 31, 2019.

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20191125005783/en/

“We had a very successful fiscal year, marked by strong and consistent performance,” said Antonio Neri, president and CEO of HPE. “Through our disciplined execution, we improved profitability across the company and significantly exceeded our original non-GAAP earnings and cash flow outlook, while sharpening our focus, transforming our culture and delivering differentiated innovation to our customers as they accelerate their digital transformations.

“I am confident in our ability to drive sustainable, profitable growth as we continue to shift our portfolio to higher-value, software-defined solutions and execute our pivot to offering everything as a service by 2022,” Neri continued. “Our strategy to deliver an edge-to-cloud platform-as-a-service is unmatched in the industry.”

Fourth Quarter Fiscal Year 2019 Results

Net revenue of $7.2 billion, stable for the last three quarters and down 9% from the prior-year period and 7% from the prior-year period, excluding Tier 1 server sales and adjusted for currency.

GAAP gross margins of 33.2%, up 250 basis points from the prior-year period and Non-GAAP of 33.3%, up 260 basis points from the prior-year period.

GAAP diluted net earnings per share (“EPS”) from continuing operations was $0.36, compared to ($0.53) in the prior-year period and above the previously provided outlook of $0.24 to $0.28 per share.

Non-GAAP diluted net EPS from continuing operations was $0.49, compared to $0.43 in the prior-year period and above the previously provided outlook of $0.43 to $0.47 per share. Fourth quarter non-GAAP net earnings and non-GAAP diluted net EPS exclude after-tax adjustments of $164 million and $0.13 per diluted share, respectively, primarily related to the impact tax indemnification adjustments, transformation costs, tax reform, amortization of intangible assets, acquisition, disposition and other related charges, adjustments for taxes, and an adjustment to earnings from equity interest.

Cash flow from operations of $1.4 billion, up $106 million from the prior-year period.

Free cash flow of $878 million, down $154 million from the prior-year period after a one-time arbitration award payment of $668 million to DXC.

Segment Results

  • Intelligent Edge revenue was $723 million, with 4.0% operating margin. HPE Aruba product revenue was down 7% year over year when adjusted for currency and HPE Aruba Services revenue was up 17% year over year when adjusted for currency.
  • Hybrid IT revenue was $5.7 billion, with 13.8% operating margin, up 250 bps year over year. Mix-shift continues towards HPE’s higher-margin value products with revenue from Apollo up 10% year over year when adjusted for currency, Composable Cloud up 21% year over year when adjusted for currency, and Hyperconverged Infrastructure showing continued momentum, up 14% year over year when adjusted for currency. HPE Nimble Storage was up 2% year over year when adjusted for currency. HPE Pointnext operational services orders and Nimble services orders were flat year over year when adjusted for currency.
  • Financial Services revenue was $878 million, with 8.4% operating margin, up 80 bps year over year. Net portfolio assets were up 1% year over year when adjusted for currency, and financing volume was down 7% year over year when adjusted for currency. The business delivered return on equity of 15.3%, up 310 bps from the prior-year period.

Fiscal 2019 Full-Year Results

Net revenue of $29.1 billion, down 6% from the prior-year period, and down 2% from the prior-year period, excluding Tier 1 server sales and adjusted for currency.

GAAP and Non-GAAP gross margins of 32.6%, up 270 basis points from the prior-year period.

GAAP diluted net EPS from continuing operations was $0.77, down 41% from the prior-year period due primarily to a one-time arbitration award payment of $668 million to DXC, but in-line with the 2018 Securities Analyst Meeting outlook of $0.73 to $0.83 per share.

Non-GAAP diluted net EPS from continuing operations was $1.77, up 20% from the prior-year period and above 2018 Securities Analyst Meeting outlook of $1.51 to $1.61 per share. Full-year non-GAAP net earnings and non-GAAP diluted net EPS exclude after-tax adjustments of $1.4 billion and $1.00 per diluted share, respectively, primarily related to the impact of acquisition, disposition and other related charges, tax reform, tax indemnification adjustments and transformation costs.

Cash flow from operations of $4.0 billion, up 35% and $1.0 billion from the prior-year period.

Free cash flow of $1.7 billion, up 58% or $636 million from the prior-year period.

Fiscal 2020 first quarter outlook:

Hewlett Packard Enterprise estimates GAAP diluted net EPS to be in the range of $0.20 to $0.24 and non-GAAP diluted net EPS to be in the range of $0.42 to $0.46. Fiscal 2020 first quarter non-GAAP diluted net EPS estimates exclude after-tax costs of approximately $0.22 per diluted share, primarily related to transformation costs and the amortization of intangible assets.

Fiscal 2020 outlook:

Hewlett Packard Enterprise maintains GAAP diluted net earnings per share outlook of $1.01 to $1.17 and non-GAAP diluted net earnings per share outlook of $1.78 to $1.94. Fiscal 2020 non-GAAP diluted net EPS estimates exclude after-tax costs of approximately $0.77 per diluted share, primarily related to transformation costs and the amortization of intangible assets.

Reiterates free cash flow1 guidance range of $1.9 to $2.1 billion.

1Hewlett Packard Enterprise provides certain guidance on a non-GAAP basis, as the company cannot predict some elements that are included in reported GAAP results. Refer to the discussion of non-GAAP financial measures below for more information.

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 and revenue adjusted for Tier 1 server sales and currency, as well as non-GAAP gross margin, non-GAAP operating expense, non-GAAP operating profit, non-GAAP operating margin, non-GAAP income tax rate, non-GAAP net earnings from continuing operations, non-GAAP net earnings from discontinued operations, non-GAAP diluted net earnings per share from continuing operations, non-GAAP diluted net earnings per share from discontinued operations, 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 margin, operating profit, operating margin, net earnings from continuing operations, net earnings from discontinued operations, diluted net earnings per share from continuing operations, diluted net earnings per share from discontinued operations, 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 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, 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 or restructuring charges; 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, 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; 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; 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 implementing 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, 2018 and subsequent Quarterly Reports on Form 10-Q.

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 Annual Report on Form 10-K for the fiscal year ended October 31, 2019. 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

 

October 31,
2019

 

July 31,
2019

 

October 31,
2018

Net revenue(a)

$

7,215

 

 

$

7,217

 

 

$

7,946

 

Costs and expenses:

 

 

 

 

 

Cost of sales

4,822

 

 

4,768

 

 

5,507

 

Research and development

438

 

 

481

 

 

440

 

Selling, general and administrative

1,229

 

 

1,253

 

 

1,237

 

Amortization of intangible assets

68

 

 

58

 

 

72

 

Impairment of goodwill

 

 

 

 

88

 

Restructuring charges

 

 

 

 

5

 

Transformation costs

151

 

 

170

 

 

(77

)

Acquisition, disposition and other related charges(b)

47

 

 

563

 

 

12

 

Separation costs

 

 

 

 

9

 

Total costs and expenses

6,755

 

 

7,293

 

 

7,293

 

Earnings (loss) from continuing operations

460

 

 

(76

)

 

653

 

Interest and other, net

(38

)

 

(70

)

 

(111

)

Tax indemnification adjustments(c)

288

 

 

(134

)

 

(12

)

Non-service net periodic benefit credit(d)

14

 

 

12

 

 

31

 

(Loss) earnings from equity interests

(1

)

 

3

 

 

15

 

Earnings (loss) from continuing operations before taxes

723

 

 

(265

)

 

576

 

(Provision) benefit for taxes(e)

(243

)

 

238

 

 

(1,348

)

Net earnings (loss) from continuing operations

480

 

 

(27

)

 

(772

)

Net earnings from discontinued operations

 

 

 

 

15

 

Net earnings (loss)

$

480

 

 

$

(27

)

 

$

(757

)

Net earnings (loss) per share:

 

 

 

 

 

Basic

 

 

 

 

 

Continuing operations

$

0.37

 

 

$

(0.02

)

 

$

(0.53

)

Discontinued operations

 

 

 

 

0.01

 

Total basic net earnings (loss) per share

$

0.37

 

 

$

(0.02

)

 

$

(0.52

)

Diluted

 

 

 

 

 

Continuing operations

$

0.36

 

 

$

(0.02

)

 

$

(0.53

)

Discontinued operations

 

 

 

 

0.01

 

Total diluted net earnings (loss) per share

$

0.36

 

 

$

(0.02

)

 

$

(0.52

)

Cash dividends declared per share

$

0.1200

 

 

$

0.1125

 

 

$

0.1125

 

Weighted-average shares used to compute net earnings (loss) per share:

 

 

 

 

 

Basic

1,308

 

 

1,334

 

 

1,459

 

Diluted(m)

1,323

 

 

1,334

 

 

1,459

 

HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

(Unaudited)

(In millions, except per share amounts)

 

 

 

Twelve months ended October 31,

 

2019

 

2018

Net revenue(a)

$

29,135

 

 

$

30,852

 

Costs and expenses:

 

 

 

Cost of sales

19,642

 

 

21,621

 

Research and development

1,842

 

 

1,667

 

Selling, general and administrative

4,907

 

 

4,921

 

Amortization of intangible assets

267

 

 

294

 

Impairment of goodwill

 

 

88

 

Restructuring charges

 

 

19

 

Transformation costs

453

 

 

414

 

Disaster charges

(7

)

 

 

Acquisition, disposition and other related charges(b)

757

 

 

82

 

Separation costs

 

 

9

 

Total costs and expenses

27,861

 

 

29,115

 

Earnings from continuing operations

1,274

 

 

1,737

 

Interest and other, net

(177

)

 

(274

)

Tax indemnification adjustments(c)

377

 

 

(1,354

)

Non-service net periodic benefit credit(d)

59

 

 

121

 

Earnings from equity interests

20

 

 

38

 

Earnings from continuing operations before taxes

1,553

 

 

268

 

(Provision) benefit for taxes(e)

(504

)

 

1,744

 

Net earnings from continuing operations

1,049

 

 

2,012

 

Net loss from discontinued operations

 

 

(104

)

Net earnings

$

1,049

 

 

$

1,908

 

Net earnings (loss) per share:

 

 

 

Basic

 

 

 

Continuing operations

$

0.78

 

 

$

1.32

 

Discontinued operations

 

 

(0.07

)

Total basic net earnings per share

$

0.78

 

 

$

1.25

 

Diluted

 

 

 

Continuing operations

$

0.77

 

 

$

1.30

 

Discontinued operations

 

 

(0.07

)

Total diluted net earnings per share

$

0.77

 

 

$

1.23

 

Cash dividends declared per share

$

0.4575

 

 

$

0.4875

 

Weighted-average shares used to compute net earnings (loss) per share:

 

 

 

Basic

1,353

 

 

1,529

 

Diluted

1,366

 

 

1,553

 

HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES
ADJUSTMENTS TO GAAP NET EARNINGS, EARNINGS FROM OPERATIONS,
OPERATING MARGIN AND DILUTED NET EARNINGS PER SHARE
(Unaudited)
(In millions, except percentages and per share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months
ended October
31, 2019

 

Diluted net
earnings
per share

 

Three months
ended
July 31, 2019

 

Diluted net
earnings
per share

 

Three months
ended October
31, 2018

 

Diluted net
earnings
per share

GAAP net earnings (loss) from continuing operations

$

480

 

 

$

0.36

 

 

$

(27

)

 

$

(0.02

)

 

$

(772

)

 

$

(0.53

)

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

 

 

 

Amortization of intangible assets

68

 

 

0.05

 

 

58

 

 

0.04

 

 

72

 

 

0.05

 

Impairment of goodwill

 

 

 

 

 

 

 

 

88

 

 

0.06

 

Restructuring charges

 

 

 

 

 

 

 

 

5

 

 

 

Transformation costs(f)

151

 

 

0.11

 

 

170

 

 

0.13

 

 

(57

)

 

(0.04

)

Acquisition, disposition and other related charges(b)(g)

54

 

 

0.04

 

 

563

 

 

0.42

 

 

12

 

 

0.01

 

Separation costs

 

 

 

 

 

 

 

 

9

 

 

0.01

 

Tax indemnification adjustments(c)

(288

)

 

(0.22

)

 

134

 

 

0.10

 

 

12

 

 

0.01

 

Non-service net periodic benefit credit(d)

(14

)

 

(0.01

)

 

(12

)

 

(0.01

)

 

(31

)

 

(0.02

)

Loss from equity interests(h)

38

 

 

0.03

 

 

38

 

 

0.03

 

 

38

 

 

0.03

 

Adjustments for taxes(e)(i)

155

 

 

0.13

 

 

(321

)

 

(0.24

)

 

1,257

 

 

0.85

 

Non-GAAP net earnings from continuing operations

$

644

 

 

$

0.49

 

 

$

603

 

 

$

0.45

 

 

$

633

 

 

$

0.43

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP earnings (loss) from continuing operations

$

460

 

 

 

 

$

(76

)

 

 

 

$

653

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP adjustments related to continuing operations:

 

 

 

 

 

 

 

 

 

 

 

Amortization of intangible assets

68

 

 

 

 

58

 

 

 

 

72

 

 

 

Impairment of goodwill

 

 

 

 

 

 

 

 

88

 

 

 

Restructuring charges

 

 

 

 

 

 

 

 

5

 

 

 

Transformation costs

151

 

 

 

 

170

 

 

 

 

(77

)

 

 

Acquisition, disposition and other related charges(b)(g)

54

 

 

 

 

563

 

 

 

 

12

 

 

 

Separation costs

 

 

 

 

 

 

 

 

9

 

 

 

Non-GAAP earnings from continuing operations

$

733

 

 

 

 

$

715

 

 

 

 

$

762

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP operating margin from continuing operations

6

%

 

 

 

(1

)%

 

 

 

8

%

 

 

Non-GAAP adjustments from continuing operations

4

%

 

 

 

11

%

 

 

 

2

%

 

 

Non-GAAP operating margin from continuing operations

10

%

 

 

 

10

%

 

 

 

10

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP net earnings from discontinued operations

$

 

 

$

 

 

$

 

 

$

 

 

$

15

 

 

$

0.01

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP adjustments related to discontinued operations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tax indemnification adjustments

 

 

 

 

 

 

 

 

(11

)

 

(0.01

)

Adjustments for taxes

 

 

 

 

 

 

 

 

(4

)

 

 

Non-GAAP net earnings from discontinued operations

$

 

 

$

 

 

$

 

 

$

 

 

$

 

 

$

 

Total GAAP net earnings (loss)

$

480

 

 

$

0.36

 

 

$

(27

)

 

$

(0.02

)

 

$

(757

)

 

$

(0.52

)

Total Non-GAAP net earnings

$

644

 

 

$

0.49

 

 

$

603

 

 

$

0.45

 

 

$

633

 

 

$

0.43

 

 

HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES
ADJUSTMENTS TO GAAP NET EARNINGS, EARNINGS FROM OPERATIONS,
OPERATING MARGIN AND DILUTED NET EARNINGS PER SHARE
(Unaudited)
(In millions, except percentages and per share amounts)

 

 

 

 

 

 

 

 

 

Twelve months
ended October
31, 2019

 

Diluted net
earnings per
share

 

Twelve months
ended October
31, 2018

 

Diluted net
earnings per
share

GAAP net earnings from continuing operations

$

1,049

 

 

$

0.77

 

 

$

2,012

 

 

$

1.30

 

 

 

 

 

 

 

 

 

Non-GAAP adjustments:

 

 

 

 

 

 

 

Amortization of intangible assets

267

 

 

0.20

 

 

294

 

 

0.19

 

Impairment of goodwill

 

 

 

 

88

 

 

0.06

 

Restructuring charges

 

 

 

 

19

 

 

0.01

 

Transformation costs(f)

453

 

 

0.33

 

 

434

 

 

0.28

 

Disaster charges

(7

)

 

(0.01

)

 

 

 

 

Acquisition, disposition and other related charges(b)(g)

764

 

 

0.56

 

 

82

 

 

0.05

 

Separation costs

 

 

 

 

9

 

 

0.01

 

Tax indemnification adjustments(c)

(377

)

 

(0.28

)

 

1,354

 

 

0.87

 

Non-service net periodic benefit credit(d)

(59

)

 

(0.04

)

 

(121

)

 

(0.08

)

Loss from equity interests(h)

152

 

 

0.11

 

 

151

 

 

0.10

 

Adjustments for taxes(e)(i)

174

 

 

0.13

 

 

(2,024

)

 

(1.31

)

Non-GAAP net earnings from continuing operations

$

2,416

 

 

$

1.77

 

 

$

2,298

 

 

$

1.48

 

 

 

 

 

 

 

 

 

GAAP earnings from continuing operations

$

1,274

 

 

 

 

$

1,737

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP adjustments related to continuing operations:

 

 

 

 

 

 

 

Amortization of intangible assets

267

 

 

 

 

294

 

 

 

Impairment of goodwill

 

 

 

 

88

 

 

 

Restructuring charges

 

 

 

 

19

 

 

 

Transformation costs

453

 

 

 

 

414

 

 

 

Disaster charges

(7

)

 

 

 

 

 

 

Acquisition, disposition and other related charges(b)(g)

764

 

 

 

 

82

 

 

 

Separation costs

 

 

 

 

9

 

 

 

Non-GAAP earnings from continuing operations

$

2,751

 

 

 

 

$

2,643

 

 

 

 

 

 

 

 

 

 

 

GAAP operating margin from continuing operations

4

%

 

 

 

6

%

 

 

Non-GAAP adjustments from continuing operations

5

%

 

 

 

3

%

 

 

Non-GAAP operating margin from continuing operations

9

%

 

 

 

9

%

 

 

 

 

 

 

 

 

 

 

GAAP net loss from discontinued operations

$

 

 

$

 

 

$

(104

)

 

$

(0.07

)

 

 

 

 

 

 

 

 

Non-GAAP adjustments related to discontinued operations:

 

 

 

 

 

 

 

Separation costs

 

 

 

 

51

 

 

0.03

 

Tax indemnification adjustments

 

 

 

 

58

 

 

0.04

 

Adjustments for taxes

 

 

 

 

(5

)

 

 

Non-GAAP net earnings from discontinued operations

$

 

 

$

 

 

$

 

 

$

 

 

 

 

 

 

 

 

 

Total GAAP net earnings

$

1,049

 

 

$

0.77

 

 

$

1,908

 

 

$

1.23

 

Total Non-GAAP net earnings

$

2,416

 

 

$

1.77

 

 

$

2,298

 

 

$

1.48

 

 

HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In millions, except par value)

 

 

 

As of

 

October 31, 2019

 

October 31, 2018

ASSETS

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

3,753

 

 

$

4,880

 

Accounts receivable, net of allowance for doubtful accounts

2,957

 

 

3,263

 

Financing receivables

3,572

 

 

3,396

 

Inventory

2,387

 

 

2,447

 

Assets held for sale

46

 

 

6

 

Other current assets(j)

2,428

 

 

3,280

 

Total current assets

15,143

 

 

17,272

 

Property, plant and equipment

6,054

 

 

6,138

 

Long-term financing receivables and other assets

8,918

 

 

11,359

 

Investments in equity interests

2,254

 

 

2,398

 

Goodwill and intangible assets

19,434

 

 

18,326

 

Total assets

$

51,803

 

 

$

55,493

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

Current liabilities:

 

 

 

Notes payable and short-term borrowings

$

4,425

 

 

$

2,005

 

Accounts payable

5,595

 

 

6,092

 

Employee compensation and benefits

1,522

 

 

1,412

 

Taxes on earnings

186

 

 

378

 

Deferred revenue

3,234

 

 

3,177

 

Accrued restructuring

195

 

 

294

 

Other accrued liabilities

4,002

 

 

3,840

 

Total current liabilities

19,159

 

 

17,198

 

Long-term debt

9,395

 

 

10,136

 

Other non-current liabilities

6,100

 

 

6,885

 

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; 1,294 and 1,423 issued and outstanding at October 31, 2019 and October 31, 2018, respectively)

13

 

 

14

 

Additional paid-in capital

28,444

 

 

30,342

 

Accumulated deficit(l)

(7,632

)

 

(5,899

)

Accumulated other comprehensive loss

(3,727

)

 

(3,218

)

Total HPE stockholders’ equity

17,098

 

 

21,239

 

Non-controlling interests

51

 

 

35

 

Total stockholders’ equity

17,149

 

 

21,274

 

Total liabilities and stockholders’ equity

$

51,803

 

 

$

55,493

 

...

HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In millions)

 

 

 

 

 

Three months ended
October 31, 2019

 

Twelve months ended
October 31, 2019

Cash flows from operating activities:

 

 

 

Net earnings

$

480

 

 

$

1,049