What changed in this filing

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Item 1. Financial Statements

2024-06-05 compared with 2024-03-05 · 289 added, 196 removed, 846 unchanged (36% of the section changed)

Financial Statements.

Condensed Consolidated Statements of Earnings for the three months ended January 31, 202 4 and 202 3 (Unaudited)

Condensed Consolidated Statements of Comprehensive Income for the three months ended January 31, 202 4 and 202 3 (Unaudited)

Condensed Consolidated Balance Sheets as of January 31, 202 4 (Unaudited) and October 31, 202 3 (Audited)

Condensed Consolidated Statements of Cash Flows for the three months ended January 31, 202 4 and 202 3 (Unaudited)

Condensed Consolidated Statements of Stockholders' Equity for the three months ended January 31, 202 4 and 202 3 (Unaudited)

Condensed Consolidated Statements of Earnings for the three and six months ended April 3 0 , 2024 and 2023 (Unaudited)

Condensed Consolidated Statements of Comprehensive Income for the three and six months ended April 3 0 , 2024 and 2023 (Unaudited)

Condensed Consolidated Balance Sheets as of April 3 0 , 2024 (Unaudited) and October 31, 2023 (Audited)

Condensed Consolidated Statements of Cash Flows for the six months ended April 3 0 , 2024 and 2023 (Unaudited)

Condensed Consolidated Statements of Stockholders' Equity for the three and six months ended April 3 0 , 2024 and 2023 (Unaudited)

Notes to Condensed Consolidated Financial Statements (Unaudited)

11 unchanged sentences

Equity Method Investments

Subsequent Events

Table of Content

1 unchanged sentence

Condensed Consolidated Statements of Earnings

For the three months ended January 31,

For the three months ended April 30, For the six months ended April 30,

2024 2023 2024 2023

In millions, except per share amounts

30 unchanged sentences

Condensed Consolidated Statements of Comprehensive Income

For the three months ended January 31,

For the three months ended April 30, For the six months ended April 30,

2024 2023 2024 2023

Net earnings $ 314 $ 418 $ 701 $ 919

Other Comprehensive Loss Before Taxes

Change in Net Unrealized Gains on Available-for-sale Securities:

Net unrealized gains arising during the period 6 5

Change in Net Unrealized Losses on Cash Flow Hedges:

Net unrealized losses arising during the period ( 204 ) ( 518 )

Net losses reclassified into earnings 114 247

Other Comprehensive Income (Loss) Before Taxes

Change in Net Unrealized (Losses) Gains on Available-for-sale Securities:

Net unrealized (losses) gains arising during the period ( 3 ) — 3 5

Change in Net Unrealized Gains (Losses) on Cash Flow Hedges:

Net unrealized gains (losses) arising during the period 169 18 ( 35 ) ( 500 )

Net (gains) losses reclassified into earnings ( 115 ) 39 ( 1 ) 286

54 57 ( 36 ) ( 214 )

Change in Unrealized Components of Defined Benefit Plans:

Net unrealized losses arising during the period ( 1 ) — ( 1 ) —

Amortization of net actuarial loss and prior service benefit 34 36 68 71

Curtailments, settlements and other 1 — 1 —

Change in Cumulative Translation Adjustment ( 21 ) ( 1 ) ( 8 ) 19

Other Comprehensive Loss Before Taxes ( 37 ) ( 211 )

Benefit for Taxes 13 53

Other Comprehensive Loss, Net of Taxes ( 24 ) ( 158 )

Other Comprehensive Income (Loss) Before Taxes 64 92 27 ( 119 )

(Provision) Benefit for Taxes ( 14 ) ( 14 ) ( 1 ) 39

Other Comprehensive Income (Loss), Net of Taxes 50 78 26 ( 80 )

Comprehensive Income $ 364 $ 496 $ 727 $ 839

3 unchanged sentences

Condensed Consolidated Balance Sheets

January 31, 2024 October 31, 2023

April 30, 2024 October 31, 2023

(Unaudited) (Audited)

In millions, except par value

In millions, except par value and shares

Current Assets:

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Common stock, $ 0.01 par value ( 9,600,000,000 shares authorized;

1,300 and 1,283 shares issued and outstanding as of January 31, 2024 and October 31, 2023, respectively)

1,297,930,792 and 1,282,630,405 shares issued and outstanding as of April 30, 2024 and October 31, 2023, respectively)

Additional paid-in capital 28,308 28,199

9 unchanged sentences

Condensed Consolidated Statements of Cash Flows (Unaudited)

For the three months ended January 31,

For the six months ended April 30,

Cash Flows from Operating Activities:

Net earnings $ 701 $ 919

Adjustments to Reconcile Net Earnings to Net Cash Provided by (Used in) Operating Activities:

Adjustments to Reconcile Net Earnings to Net Cash Provided by Operating Activities:

Depreciation and amortization 1,299 1,307

13 unchanged sentences

Other assets and liabilities ( 764 ) 307

Net cash provided by (used in) operating activities 64 ( 829 )

Net cash provided by operating activities 1,157 60

Cash Flows from Investing Activities:

11 unchanged sentences

Payment of debt ( 2,218 ) ( 2,428 )

Cash settlement for derivative hedging debt — ( 2 )

Net payments related to stock-based award activities ( 94 ) ( 106 )

2 unchanged sentences

Cash dividends paid to shareholders ( 338 ) ( 311 )

Net cash provided by financing activities 53 9

Net cash (used in) provided by financing activities ( 1,676 ) 163

Effect of exchange rate changes on cash, cash equivalents, and restricted cash ( 31 ) 139

6 unchanged sentences

Condensed Consolidated Statements of Stockholders' Equity (Unaudited)

For the three months ended January 31, 2024 Number of Shares Par Value Additional Paid-in Capital Accumulated Deficit Accumulated

For the three months ended April 30, 2024 Number of Shares Par Value Additional Paid-in Capital Accumulated Deficit Accumulated

Comprehensive

1 unchanged sentence

In millions, except number of shares in thousands

Balance as of January 31, 2024 1,299,768 $ 13 $ 28,239 $ ( 3,728 ) $ ( 3,108 ) $ 21,416 $ 52 $ 21,468

Net earnings 314 314 2 316

Other comprehensive gain 50 50 50

Comprehensive income 364 2 366

Stock-based compensation expense 120 120 120

Tax withholding related to vesting of employee stock plans ( 4 ) ( 4 ) ( 4 )

Issuance of common stock in connection with employee stock plans and other 1,024 3 — 3 3

Repurchases of common stock ( 2,861 ) ( 50 ) ( 50 ) ( 50 )

Cash dividends declared ($ 0.13 per share)

( 169 ) ( 169 ) — ( 169 )

Balance as of April 30, 2024 1,297,931 $ 13 $ 28,308 $ ( 3,583 ) $ ( 3,058 ) $ 21,680 $ 54 $ 21,734

) Represents the impact of the adoption of the accounting standard on the s on financial instruments.

For the six months ended April 30, 2024 Common Stock

Number of Shares Par Value Additional Paid-in Capital Accumulated Deficit Accumulated

Comprehensive

Interests Total

In millions, except number of shares in thousands

Balance as of October 31, 2023 1,282,630 $ 13 $ 28,199 $ ( 3,946 ) $ ( 3,084 ) $ 21,182 $ 56 $ 21,238

Net earnings 701 701 6 707

Other comprehensive loss ( 24 ) ( 24 ) ( 24 )

Other comprehensive gain 26 26 26

Comprehensive income 727 6 733

5 unchanged sentences

( 338 ) ( 338 ) ( 8 ) ( 346 )

Balance as of April 30, 2024 1,297,931 $ 13 $ 28,308 $ ( 3,583 ) $ ( 3,058 ) $ 21,680 $ 54 $ 21,734

Table of Content

For the three months ended April 30, 2023 Number of Shares Par Value Additional Paid-in Capital Accumulated Deficit Accumulated

Comprehensive

Interests Total

In millions, except number of shares in thousands

Balance as of January 31, 2023 1,296,884 $ 13 $ 28,259 $ ( 5,005 ) $ ( 3,256 ) $ 20,011 $ 52 $ 20,063

) Represents the impact of the adoption of the accounting standard on the s on financial instruments.

For the three months ended January 31, 2023 Number of Shares Par Value Additional Paid-in Capital Accumulated Deficit Accumulated

Net earnings 418 418 3 421

Other comprehensive gain 78 78 78

Comprehensive income 496 3 499

Stock-based compensation expense 126 126 126

Tax withholding related to vesting of employee stock plans ( 6 ) ( 6 ) ( 6 )

Issuance of common stock in connection with employee stock plans and other 1,783 2 ( 1 ) 1 1

Repurchases of common stock ( 7,164 ) ( 107 ) ( 107 ) ( 107 )

Cash dividends declared ($ 0.12 per share)

( 155 ) ( 155 ) ( 155 )

Balance as of April 30, 2023 1,291,503 $ 13 $ 28,274 $ ( 4,743 ) $ ( 3,178 ) $ 20,366 $ 55 $ 20,421

For the six months ended April 30, 2023 Number of Shares Par Value Additional Paid-in Capital Accumulated Deficit Accumulated

Comprehensive

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( 311 ) ( 311 ) ( 311 )

Balance as of January 31, 2023 1,296,884 $ 13 $ 28,259 $ ( 5,005 ) $ ( 3,256 ) $ 20,011 $ 52 $ 20,063

Balance as of April 30, 2023 1,291,503 $ 13 $ 28,274 $ ( 4,743 ) $ ( 3,178 ) $ 20,366 $ 55 $ 20,421

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

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All intercompany transactions and accounts within the consolidated businesses of the Company have been eliminated.

In the opinion of management, the accompanying unaudited Condensed Consolidated Financial Statements of Hewlett Packard Enterprise contain all adjustments, including normal recurring adjustments, necessary to present fairly the Company's financial position as of January 31, 2024 and October 31, 2023, its results of operations for the three months ended January 31, 2024 and 2023, its cash flows for the three months ended January 31, 2024 and 2023, and its statements of stockholders' equity for the three months ended January 31, 2024 and 2023.

The results of operations and the cash flows for the three months ended January 31, 2024 are not necessarily indicative of the results to be expected for the full year.

In the opinion of management, the accompanying unaudited Condensed Consolidated Financial Statements of Hewlett Packard Enterprise contain all adjustments, including normal recurring adjustments, necessary to present fairly the Company's financial position as of April 30, 2024 and October 31, 2023, its results of operations for the three and six months ended April 30, 2024 and 2023, its cash flows for the six months ended April 30, 2024 and 2023, and its statements of stockholders' equity for the three and six months ended April 30, 2024 and 2023.

The results of operations and the cash flows for the three and six months ended April 30, 2024 are not necessarily indicative of the results to be expected for the full year.

The information included in this Quarterly Report on Form 10-Q should be read in conjunction with the Company's Annual Report on Form 10-K for the fiscal year ended October 31, 2023, as filed with the U.S.

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and (v) Corporate Investments and Other.

The Company is reporting under this re-aligned segment structure beginning with the results of the first quarter of fiscal 2024 included in this Quarterly Report.

The Company began reporting under this re-aligned segment structure beginning with the results of the first quarter of fiscal 2024 included in the Quarterly Report on Form 10-Q for the fiscal quarter ended January 31, 2024, and continues to report under this segment structure.

The Company has reflected these changes to its segment information retrospectively to the earliest period presented, which primarily resulted in the realignment of net revenue and operating profit for each of the segments as described above.

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These arrangements do not alter the Company's rights and obligations towards suppliers, including scheduled payment terms.

Liabilities associated with the funded participation in these arrangements, as presented within Accounts Payable on the Condensed Consolidated Balance Sheets, amounted to $ 387 million, and $ 295 million as of January 31, 2024 and October 31, 2023, respectively.

Liabilities associated with the funded participation in these arrangements, as presented within Accounts Payable on the Condensed Consolidated Balance Sheets, amounted to $ 365 million, and $ 295 million as of April 30, 2024 and October 31, 2023, respectively.

Recently Enacted Accounting Pronouncements

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In November 2023, the FASB issued guidance to improve the disclosures about a public entity’s reportable segments and address requests from investors for additional, more detailed information about a reportable segment’s expenses.

The Company is required to adopt the guidance in the first quarter of fiscal 2025, though early adoption is permitted.

The Company is currently evaluating the impact of this amendment on its Condensed Consolidated Financial Statements.

In March 2023, the FASB issued a guidance which amends certain provisions of ASC 842 that apply to arrangements between related parties under common control.

It requires that leasehold improvements associated with common control leases be amortized by the lessee over the useful life of the leasehold improvements to the common control group as long as the lessee controls the use of the underlying asset through a lease.

In addition, leasehold improvements associated with common control leases should be accounted for as a transfer between entities under common control through an adjustment to equity if, and when, the lessee no longer controls the use of the underlying asset.

The Company is required to adopt the guidance in the first quarter of fiscal 2025, though early adoption is permitted.

The Company is currently evaluating the impact of this amendment on its Condensed Consolidated Financial Statements.

The Company will adopt this guidance for its annual period ending October 31, 2025 and all interim periods thereafter.

The Company does not expect the adoption of this guidance to have a significant impact on its Condensed Consolidated Financial Statements.

Segment Information

8 unchanged sentences

HPE Synergy, a composable infrastructure for traditional and cloud-native applications;

HPE Scale Up Servers product lines for critical applications, including large

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HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

enterprise software applications and data analytics platforms;

HPE Scale Up Servers product lines for critical applications, including large enterprise software applications and data analytics platforms;

HPE Edgeline servers;

7 unchanged sentences

and storage networking.

It also includes AIOps-driven intelligence with HPE InfoSight and HPE CloudPhysics.

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HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

also includes AIOps-driven intelligence with HPE InfoSight and HPE CloudPhysics.

In private cloud, our HPE GreenLake offerings include new cloud-native offerings and capabilities for virtual machines, containers, and bare metal;

25 unchanged sentences

Investments and Other Total

Three months ended January 31, 2024:

Three months ended April 30, 2024:

Net revenue $ 3,812 $ 1,192 $ 1,081 $ 867 $ 252 $ 7,204

2 unchanged sentences

Segment earnings (loss) from operations $ 426 $ 10 $ 237 $ 81 $ ( 9 ) $ 745

Three months ended January 31, 2023:

Three months ended April 30, 2023:

Net revenue $ 3,192 $ 1,346 $ 1,341 $ 852 $ 242 $ 6,973

2 unchanged sentences

Segment earnings (loss) from operations $ 473 $ 26 $ 332 $ 76 $ ( 19 ) $ 888

Six months ended April 30, 2024:

Net revenue $ 7,058 $ 2,398 $ 2,274 $ 1,739 $ 490 $ 13,959

Intersegment net revenue 161 106 13 1 — 281

Total segment net revenue $ 7,219 $ 2,504 $ 2,287 $ 1,740 $ 490 $ 14,240

Segment earnings (loss) from operations $ 809 $ 57 $ 590 $ 155 $ ( 19 ) $ 1,592

Six months ended April 30, 2023:

Net revenue $ 7,376 $ 2,707 $ 2,504 $ 1,719 $ 476 $ 14,782

Intersegment net revenue 243 48 9 12 — 312

Total segment net revenue $ 7,619 $ 2,755 $ 2,513 $ 1,731 $ 476 $ 15,094

Segment earnings (loss) from operations $ 1,151 $ 106 $ 559 $ 139 $ ( 41 ) $ 1,914

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HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

The reconciliation of segment operating results to Condensed Consolidated Statements of Earnings was as follows:

For the three months ended January 31,

For the three months ended April 30, For the six months ended April 30,

2024 2023 2024 2023

Total segments $ 7,328 $ 7,102 $ 14,240 $ 15,094

8 unchanged sentences

Disaster recovery (charges)

7 ( 3 ) 32 ( 4 )

Acquisition, disposition and other related charges ( 46 ) ( 19 ) ( 89 ) ( 30 )

2 unchanged sentences

Total earnings before provision for taxes $ 445 $ 522 $ 928 $ 1,145

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HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

Geographic Information

Net revenue by geographic region was as follows:

For the three months ended January 31,

For the three months ended April 30, For the six months ended April 30,

2024 2023 2024 2023

United States $ 2,584 $ 2,395 $ 4,878 $ 5,280

Americas excluding U.S.

560 520 1,067 1,089

Total Americas 3,144 2,915 5,945 6,369

10 unchanged sentences

The primary elements of the HPE Next Plan have been substantially completed by the end of fiscal 2023.

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HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

Cost Optimization and Prioritization Plan

The components of transformation costs relating to the Cost Optimization and Prioritization Plan were as follows:

For the three months ended January 31,

For the three months ended April 30, For the six months ended April 30,

2024 2023 2024 2023

Program management $ 1 $ 1 $ 2 $ 2

IT costs 3 8 7 16

Restructuring charges 10 18 18 89

2 unchanged sentences

The components of transformation costs relating to HPE Next Plan were as follows:

For the three months ended January 31,

For the three months ended April 30, For the six months ended April 30,

2024 2023 2024 2023

IT costs $ 19 $ 28 $ 28 $ 49

Restructuring (credits) charges ( 1 ) 1

Restructuring charges 1 5 — 6

Other — 1 — 1

Total $ 20 $ 34 $ 28 $ 56

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HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

Restructuring Plan

9 unchanged sentences

Non-cash items ( 2 ) 1 — ( 1 )

Liability as of January 31, 2024

Liability as of April 30, 2024

$ 79 $ 101 $ 4 $ 23

Total costs incurred to date, as of January 31, 2024

Total costs incurred to date, as of April 30, 2024

$ 813 $ 559 $ 1,267 $ 270

Total expected costs to be incurred as of January 31, 2024

Total expected costs to be incurred as of April 30, 2024

$ 820 $ 560 $ 1,267 $ 270

The current restructuring liability related to the transformation programs, reported in the Condensed Consolidated Balance Sheets as of January 31, 2024 and October 31, 2023, was $ 121 million and $ 180 million, respectively, in accrued restructuring, and $ 20 million and $ 22 million, respectively, in Other accrued liabilities.

The non-current restructuring liability related to the transformation programs, reported in Other non-current liabilities in the Condensed Consolidated Balance Sheets as of January 31, 2024 and October 31, 2023, was $ 102 million and $ 110 million, respectively.

The current restructuring liability related to the transformation programs, reported in the Condensed Consolidated Balance Sheets as of April 30, 2024 and October 31, 2023, was $ 97 million and $ 180 million, respectively, in Accrued restructuring, and $ 19 million and $ 22 million, respectively, in Other accrued liabilities.

The non-current restructuring liability related to the transformation programs, reported in Other non-current liabilities in the Condensed Consolidated Balance Sheets as of April 30, 2024 and October 31, 2023, was $ 91 million and $ 110 million, respectively.

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HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

Retirement Benefit Plans

The Company's net pension benefit cost for defined benefit plans recognized in the Condensed Consolidated Statements of Earnings was as follows:

For the three months ended January 31,

For the three months ended April 30, For the six months ended April 30,

2024 2023 2024 2023

Service cost $ 12 $ 13 $ 24 $ 26

Interest cost (1)

102 97 203 190

Expected return on plan assets (1)

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Provision for Taxes

For the three months ended January 31, 2024 and 2023, the Company recorded income tax expense of $ 96 million and $ 122 million, respectively, which reflects an effective tax rate of 19.9 % and 19.6 %, respectively.

The effective tax rate generally differs from the U.S.

federal statutory rate of 21% due to favorable tax rates associated with certain earnings from the Company’s operations in lower tax jurisdictions throughout the world but are also impacted by discrete tax adjustments during each fiscal period.

For the three months ended April 30, 2024 and 2023, the Company recorded income tax expense of $ 131 million and $ 104 million, respectively, which reflects an effective tax rate of 29.4 % and 19.9 %, respectively.

For the six months ended April 30, 2024 and 2023, the Company recorded income tax expense of $ 227 million and $ 226 million, respectively, which reflects an effective tax rate of 24.5 % and 19.7 %, respectively.

For the three and six months ended April 30, 2024, the effective tax rate differed from the U.S.

federal statutory rate of 21% due to the geographic mix of forecasted earnings and net unfavorable permanent differences from U.S.

income tax on non-U.S.

For the three and six months ended April 30, 2023, the effective tax rate differed from the U.S.

federal statutory rate of 21% due to favorable tax rates associated with certain earnings from the Company’s operations in lower tax jurisdictions throughout the world but is also impacted by discrete tax adjustments during each fiscal period.

For the three and six months ended April 30, 2024, the Company recorded immaterial net income tax benefits related to various items discrete to the period.

For the three and six months ended April 30, 2023, the Company recorded $ 14 million and $ 25 million, respectively of net income tax benefits related to various items discrete to the period.

For the three months ended April 30, 2023, this amount primarily included $ 14 million of net income tax benefits related to transformation costs, and acquisition, disposition and other related charges.

For the six months ended April 30, 2023, this amount primarily included $ 36 million of net income tax benefits related to transformation costs, and acquisition, disposition and other related charges and $ 13 million of net excess tax benefits related to stock-based compensation, partially offset by $ 23 million of net income tax charges related to tax audit settlements and changes in uncertain tax positions.

Uncertain Tax Positions

As of April 30, 2024 and October 31, 2023, the amount of unrecognized tax benefits was $ 661 million and $ 672 million, respectively, of which up to $ 357 million and $ 354 million, respectively, would affect the Company's effective tax rate if realized as of their respective periods.

For tax liabilities pertaining to unrecognized tax benefits, the Company recognizes interest income from favorable settlements and interest expense and penalties in Provision for taxes in the Condensed Consolidated Statements of Earnings.

As of April 30, 2024 and October 31, 2023, the Company had accrued $ 57 million and $ 56 million, respectively, for interest and penalties in the Condensed Consolidated Balance Sheets.

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Notes to Condensed Consolidated Financial Statements (Continued)

For the three months ended January 31, 2024, the Company recorded immaterial net income tax charges related to various items discrete to the period.

For the three months ended January 31, 2023, the Company recorded $ 11 million of net income tax benefits related to various items discrete to the period.

The amount primarily included $ 22 million of net income tax benefits related to transformation costs, and acquisition, disposition and other related charges and $ 13 million of net excess tax benefits related to stock-based compensation, partially offset by $ 23 million of net income tax charges related to tax audit settlements and changes in uncertain tax positions.

Uncertain Tax Positions

As of January 31, 2024 and October 31, 2023, the amount of unrecognized tax benefits was $ 674 million and $ 672 million, respectively, of which up to $ 372 million and $ 354 million, respectively, would affect the Company's effective tax rate if realized as of their respective periods.

As of January 31, 2024 and October 31, 2023, the Company had accrued $ 57 million and $ 56 million, respectively, for interest and penalties in the Condensed Consolidated Balance Sheets.

The Company engages in continuous discussion and negotiation with tax authorities regarding tax matters in various jurisdictions.

1 unchanged sentence

federal tax audits for years prior to 2017.

The IRS is conducting audits of the Company's fiscal 2017 through 2022 U.S.

The Internal Revenue Service (“IRS”) is conducting audits of the Company's fiscal 2017 through 2022 U.S.

federal income tax returns.

During the fourth quarter of fiscal 2023, the IRS issued notices of proposed adjustments (“NOPAs”) for 2017 , 2018 , and 2019 relating to HPE’s intercompany transfer pricing.

During the fiscal quarter, the IRS issued a Revenue Agent Report (“RAR”) finalizing their position on the NOPAs for the same issues and same fiscal years.

During the first quarter of fiscal 2024, the IRS issued a Revenue Agent Report (“RAR”) finalizing their position on the NOPAs for the same issues and same fiscal years.

The IRS is seeking to increase taxable income across the three fiscal years by $ 904 million.

1 unchanged sentence

However, HPE disagrees with the IRS’ adjustments and believes the positions taken on its tax returns are more likely than not to prevail on technical merits, and the Company will defend these positions through the IRS administrative processes, as necessary.

Accordingly, no changes have been made to the Company’s reserves for uncertain tax positions as of January 31, 2024 relating to the IRS’ adjustments.

Discussions with the IRS are ongoing, but as of April 30, 2024 there have been no substantive updates in the process.

Accordingly, no changes have been made to the Company’s reserves for uncertain tax positions as of April 30, 2024 relating to the IRS’ adjustments.

With respect to major state and foreign tax jurisdictions, the Company is no longer subject to tax authority examinations for years prior to 2005.

3 unchanged sentences

Deferred tax assets and liabilities included in the Condensed Consolidated Balance Sheets were as follows:

January 31, 2024 October 31, 2023

April 30, 2024 October 31, 2023

Deferred tax assets $ 2,283 $ 2,264

1 unchanged sentence

Deferred tax assets net of deferred tax liabilities $ 1,952 $ 1,938

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HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

Balance Sheet Details

Cash, Cash Equivalents and Restricted Cash

January 31, 2024 October 31, 2023

April 30, 2024 October 31, 2023

Cash and cash equivalents $ 2,676 $ 4,270

2 unchanged sentences

(1) The Company included restricted cash in Other current assets in the accompanying Condensed Consolidated Balance Sheets.

January 31, 2024 October 31, 2023

April 30, 2024 October 31, 2023

Purchased parts and fabricated assemblies $ 4,956 $ 2,940

1 unchanged sentence

Total $ 7,326 $ 4,607

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HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

Property, Plant and Equipment, net

January 31, 2024 October 31, 2023

April 30, 2024 October 31, 2023

Land $ 66 $ 66

4 unchanged sentences

Property, plant and equipment, net $ 5,817 $ 5,989

The Company's aggregate product warranty liabilities and changes for the three months ended January 31, 2024, and the fiscal year ended October 31, 2023 were as follows:

January 31, 2024 October 31, 2023

The Company's aggregate product warranty liabilities and changes for the six months ended April 30, 2024, and the fiscal year ended October 31, 2023 were as follows:

April 30, 2024 October 31, 2023

Balance at beginning of period $ 318 $ 360

5 unchanged sentences

The Company’s contract balances consist of contract assets, contract liabilities, and costs to obtain a contract with a customer.

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HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

Contract Assets

A summary of accounts receivable, net, including unbilled receivables was as follows:

January 31, 2024 October 31, 2023

April 30, 2024 October 31, 2023

Accounts receivable $ 3,576 $ 3,254

2 unchanged sentences

Total $ 3,840 $ 3,481

The allowances for credit losses related to accounts receivable and changes for the three months ended January 31, 2024, and the fiscal year ended October 31, 2023 were as follows:

January 31, 2024 October 31, 2023

The allowances for credit losses related to accounts receivable and changes for the six months ended April 30, 2024, and the fiscal year ended October 31, 2023 were as follows:

April 30, 2024 October 31, 2023

Balance at beginning of period $ 37 $ 25

2 unchanged sentences

Balance at end of period $ 31 $ 37

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HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

Sale of Trade Receivables

The Company has third-party revolving short-term financing arrangements intended to facilitate the working capital requirements of certain customers.

For the three months ended January 31, 2024, the Company sold $ 0.8 billion and for the fiscal year ended October 31, 2023, the Company sold $ 4.1 billion of trade receivables.

The Company recorded an obligation of $ 50 million and $ 80 million within Notes payable and short-term borrowings in its Condensed Consolidated Balance Sheets as of January 31, 2024 and October 31, 2023, respectively, related to the trade receivables sold and collected from the third-party for which the revenue recognition was deferred.

For the three and six months ended April 30, 2024, the Company sold $ 0.8 billion and $ 1.6 billion of trade receivables, respectively.

For the fiscal year ended October 31, 2023, the Company sold $ 4.1 billion of trade receivables.

The Company recorded an obligation of $ 50 million and $ 80 million within Notes payable and short-term borrowings in its Condensed Consolidated Balance Sheets as of April 30, 2024 and October 31, 2023, respectively, related to the trade receivables sold and collected from the third-party for which the revenue recognition was deferred.

Contract Liabilities and Remaining Performance Obligations

As of January 31, 2024 and October 31, 2023, current deferred revenue of $ 3.7 billion and $ 3.6 billion, respectively, were recorded in Deferred revenue, and non-current deferred revenue of $ 3.4 billion and $ 3.3 billion, respectively, were recorded in Other non-current liabilities in the Condensed Consolidated Balance Sheets.

For the three months ended January 31, 2024, approximately $ 1.3 billion of revenue was recognized relating to contract liabilities recorded as of October 31, 2023.

Contract liabilities consist of deferred revenue and customer deposits.

A summary of contract liabilities were as follows:

April 30, 2024 October 31, 2023

Location In millions

Customer deposits Other accrued liabilities $ 739 $ 392

Customer deposits - non-current Other non-current liabilities 87 144

Total customer deposits $ 826 $ 536

Deferred revenue Deferred revenue $ 3,783 $ 3,658

Deferred revenue - non-current Other non-current liabilities 3,496 3,281

Total deferred revenue $ 7,279 $ 6,939

For the six months ended April 30, 2024, approximately $ 2.3 billion of revenue was recognized relating to contract liabilities recorded as of October 31, 2023.

Revenue allocated to remaining performance obligations represents contract work that has not yet been performed and does not include contracts where the customer is not committed.

Remaining performance obligations estimates are subject to change and are affected by several factors, including contract terminations, changes in the scope of contracts, adjustments for revenue that has not materialized and adjustments for currency.

As of January 31, 2024, the aggregate amount of remaining performance obligations, or deferred revenue, was $ 7.1 billion.

As of April 30, 2024, the aggregate amount of deferred revenue, was $ 7.3 billion.

The Company expects to recognize approximately 31 % of this balance over fiscal 2024 with the remainder to be recognized thereafter.

The Company receives payments in advance of completion of its contractual obligations, these payments are considered customer deposits.

As customer acceptance milestones are met, the Company will recognize revenue and reduce the amount of contract liabilities.

As of April 30, 2024, the aggregate amount of customer deposits was $ 826 million.

The Company expects to recognize $ 739 million over the next twelve months and the remaining balance thereafter.

Costs to Obtain a Contract

As of January 31, 2024, the current and non-current portions of the capitalized costs to obtain a contract were $ 87 million and $ 138 million, respectively.

As of April 30, 2024, the current and non-current portions of the capitalized costs to obtain a contract were $ 88 million and $ 137 million, respectively.

As of October 31, 2023, the current and non-current portions of the capitalized costs to obtain a contract were $ 86 million and $ 138 million, respectively.

The current and non-current portions of the capitalized costs to obtain a contract were included in Other current assets, and Long-term financing receivables and other assets, respectively, in the Condensed Consolidated Balance Sheets.

For the three months ended January 31, 2024 and 2023, the Company amortized $ 26 million and $ 22 million respectively, of capitalized costs to obtain a contract.

For the three and six months ended April 30, 2024 the Company amortized $ 26 million and $ 52 million respectively, of capitalized costs to obtain a contract.

For the three and six months ended April 30, 2023 the Company amortized $ 23 million and $ 45 million respectively, of capitalized costs to obtain a contract.

The amortized capitalized costs to obtain a contract are included in Selling, general and administrative expense in the Condensed Consolidated Statements of Earnings.

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The components of financing receivables were as follows:

January 31, 2024 October 31, 2023

April 30, 2024 October 31, 2023

Minimum lease payments receivable $ 9,706 $ 9,363

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The Company enters into arrangements to transfer the contractual payments due under certain financing receivables to third party financial institutions.

For the three months ended January 31, 2024 and the fiscal year ended October 31, 2023, the Company sold $ 23 million and $ 237 million of financing receivables, respectively.

For the six months ended April 30, 2024 and the fiscal year ended October 31, 2023, the Company sold $ 41 million and $ 237 million of financing receivables, respectively.

Credit Quality Indicators

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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.

The credit risk profile of gross financing receivables, based on internal risk ratings as of January 31, 2024, presented on amortized cost basis by year of origination was as follows:

As of January 31, 2024

The credit risk profile of gross financing receivables, based on internal risk ratings as of April 30, 2024, presented on amortized cost basis by year of origination was as follows:

As of April 30, 2024

Low Moderate High

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Allowance for Credit Losses

The allowance for credit losses for financing receivables as of January 31, 2024 and October 31, 2023 and the respective changes for the three and twelve months then ended were as follows:

January 31, 2024 October 31, 2023

The allowance for credit losses for financing receivables as of April 30, 2024 and October 31, 2023 and the respective changes for the six and twelve months then ended were as follows:

April 30, 2024 October 31, 2023

Balance at beginning of period $ 243 $ 325

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The following table summarizes the aging and non-accrual status of gross financing receivables:

January 31, 2024 October 31, 2023

April 30, 2024 October 31, 2023

Current 1-30 days $ 368 $ 320

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The following table presents amounts included in the Condensed Consolidated Statements of Earnings related to lessor activity:

For the three months ended January 31,

Location 2024 2023

For the three months ended April 30, For the six months ended April 30,

2024 2023 2024 2023

Location In millions

Interest income from sales-type leases and direct financing leases Financing Income $ 162 $ 130 $ 318 $ 253

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The Company’s risk of loss related to securitized receivables and leased equipment is limited to the amount by which the Company’s right to receive collections for assets securitized exceeds the amount required to pay interest, principal, and fees and expenses related to the asset-backed securities.

The following table presents the assets and liabilities held by the consolidated VIE as of January 31, 2024 and October 31, 2023, which are included in the Condensed Consolidated Balance Sheets.

The following table presents the assets and liabilities held by the consolidated VIE as of April 30, 2024 and October 31, 2023, which are included in the Condensed Consolidated Balance Sheets.

The assets in the table below include those that can be used to settle the obligations of the VIE.

Additionally, general creditors do not have recourse to the assets of the VIE.

January 31, 2024 October 31, 2023

April 30, 2024 October 31, 2023

Assets held by VIE:

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Long-term debt, net of unamortized debt issuance costs $ 1,038 $ 1,082

For the three months ended January 31, 2024, financing receivables and leased equipment transferred via securitization through the SPE were $ 0.6 billion and $ 0.3 billion, respectively.

For the six months ended April 30, 2024, financing receivables and leased equipment transferred via securitization through the SPE were $ 0.6 billion and $ 0.3 billion, respectively.

For the fiscal year ended October 31, 2023, financing receivables and leased equipment transferred via securitization through the SPE were $ 0.8 billion and $ 0.7 billion, respectively.

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balance sheet.

The closing of the transaction remains subject to receipt of regulatory approvals, approval of the transaction by Juniper Networks shareholders, and satisfaction of other customary closing conditions .

On April 2, 2024, Juniper Networks shareholders approved the transaction.

The closing of the transaction remains subject to receipt of regulatory approvals and satisfaction of other customary closing conditions .

Goodwill is tested for impairment at the reporting unit level.

As of January 31, 2024, the Company's reporting units are consistent with the reportable segments identified in Note 2, “Segment Information”, with the exception of Server and Corporate Investments and Other.

As of April 30, 2024, the Company's reporting units are consistent with the reportable segments identified in Note 2, “Segment Information”, with the exception of Server and Corporate Investments and Other.

The Server segment contains two reporting units, Compute and HPC & AI.

The Corporate Investments and Other segment contains two reporting units, A & PS and CMS.

The following table represents the carrying value of goodwill, by reportable segment as of January 31, 2024 and October 31, 2023.

The following table represents the carrying value of goodwill, by reportable segment as of April 30, 2024 and October 31, 2023.

Server Hybrid Cloud Intelligent Edge Financial Services Corporate Investments and Other Total

Balance as of October 31, 2023 and

January 31, 2024

Balance as of October 31, 2023

$ 10,220 $ 4,716 $ 2,908 $ 144 $ — $ 17,988

Goodwill adjustments — ( 1 ) 1 — — —

Balance as of April 30, 2024

$ 10,220 $ 4,715 $ 2,909 $ 144 $ — $ 17,988

Goodwill is tested annually for impairment, as of the first day of the fourth quarter, at the reporting unit level.

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Based on the results of this hypothetical 10 % decrease, all of the reporting units had an excess of fair value over carrying value with the exception of the Compute and HPC & AI reporting units.

The Compute reporting unit has goodwill of $ 8.2 billion as of January 31, 2024, and excess of fair value over carrying value of 4 % as of the interim test date.

The Compute reporting unit has goodwill of $ 8.2 billion as of April 30, 2024, and excess of fair value over carrying value of 4 % as of the interim test date.

The Compute business is cyclical in nature.

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If the global macroeconomic or geopolitical conditions worsen, projected revenue growth rates or operating margins decline, weighted average cost of capital increases, or if the Company has significant or sustained decline in its stock price, it is possible its estimates about the Compute reporting unit's ability to successfully address the current challenges may change, which could result in the carrying value of the Compute reporting unit exceeding its estimated fair value and potential impairment charges.

The HPC & AI reporting unit has goodwill of $ 2.0 billion as of January 31, 2024, and excess of fair value over carrying value of 4 % as of the interim test date.

The HPC & AI reporting unit has goodwill of $ 2.0 billion as of April 30, 2024, and excess of fair value over carrying value of 4 % as of the interim test date.

The HPC & AI business continues to face challenges related to supply chain constraints of key components and other operational challenges impacting our ability to achieve certain customer acceptance milestones required for revenue recognition and resulting cost increases associated with fulfilling contracts over longer than originally anticipated timelines.

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The following table presents the Company's assets and liabilities that are measured at fair value on a recurring basis:

As of January 31, 2024 As of October 31, 2023

As of April 30, 2024 As of October 31, 2023

Measured Using Fair Value

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Short-Term and Long-Term Debt:

As of January 31, 2024 and October 31, 2023, the estimated fair value of the Company's short-term and long-term debt was $ 13.0 billion and $ 12.2 billion, respectively.

As of January 31, 2024 and October 31, 2023, the carrying value of the Company's short-term and long-term debt was $ 12.8 billion and $ 12.4 billion, respectively.

As of April 30, 2024 and October 31, 2023, the estimated fair value of the Company's short-term and long-term debt was $ 11.3 billion and $ 12.2 billion, respectively.

As of April 30, 2024 and October 31, 2023, the carrying value of the Company's short-term and long-term debt was $ 11.3 billion and $ 12.4 billion, respectively.

If measured at fair value in the Condensed Consolidated Balance Sheets, short-term and long-term debt would be classified in Level 2 of the fair value hierarchy.

Other Financial Instruments:

For the balance of the Company'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 nature.

If measured at fair value in the Condensed Consolidated Balance Sheets, these other financial instruments would be classified in Level 2 or Level 3 of the fair value hierarchy.

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HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

Non-Recurring Fair Value Measurements

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Equity investments are recorded at cost and measured at fair value when they are deemed to be impaired or when there is an adjustment from observable price changes.

For the three months ended January 31, 2024 the Company recognized a $ 7 million unrealized net loss on these investments.

For the three months ended January 31, 2023, the Company recognized an impairment of $ 10 million on these investments.

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HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

months ended April 30, 2024, the Company recognized an unrealized net loss of $ 7 million on these investments.

For the three and six months ended April 30, 2023, the Company recognized an unrealized net gain of $ 4 million and an unrealized net loss of $ 6 million, respectively, on these investments.

For the six months ended April 30, 2023, this included an impairment of $ 10 million.

If measured at fair value in the Condensed Consolidated Balance Sheets, these would generally be classified in Level 3 of the fair value hierarchy.

For investments still held as of January 31, 2024, the cumulative upward adjustments for observable price changes was $ 39 million and cumulative downward adjustments for observable price changes and impairments was $ 84 million.

For investments still held as of April 30, 2024, the cumulative upward adjustments for observable price changes was $ 39 million and cumulative downward adjustments for observable price changes and impairments was $ 84 million.

Refer to Note 11 “Financial Instruments,” for further information about equity investments.

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Cash equivalents and available-for-sale debt investments were as follows:

As of January 31, 2024 As of October 31, 2023

Cost Gross Unrealized Gains Fair

As of April 30, 2024 As of October 31, 2023

Cost Gross Unrealized Gains (Losses) Fair

Value Cost Gross Unrealized Gains (Losses) Fair

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Total cash equivalents and available-for-sale debt investments $ 1,534 $ 3 $ 1,537 $ 2,696 $ — $ 2,696

As of January 31, 2024 and October 31, 2023, the carrying amount of cash equivalents approximated fair value due to the short period of time to maturity.

As of April 30, 2024 and October 31, 2023, the carrying amount of cash equivalents approximated fair value due to the short period of time to maturity.

Time deposits were primarily issued by institu t ions outside of the U.S.

as of January 31, 2024 and October 31, 2023.

as of April 30, 2024 and October 31, 2023.

The estimated fair value of the available-for-sale debt investments may not be representative of values that will be realized in the future.

Contractual maturities of investments in available-for-sale debt securities were as follows:

As of January 31, 2024

As of April 30, 2024

Amortized Cost Fair Value

Due in one to five years 5 5

Due in more than five years $ 110 $ 113

2 unchanged sentences

Non-marketable equity investments in privately held companies are included in Long-term financing receivables and other assets in the Condensed Consolidated Balance Sheets.

These non-marketable equity investments are carried either at fair

These non-marketable equity investments are carried either at fair value or under measurement alternative.

Measurement alternative equity investments are recorded at cost and measured at fair value when they are deemed to be impaired or when there is an adjustment from observable price changes.

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Notes to Condensed Consolidated Financial Statements (Continued)

value or under the measurement alternative.

Measurement alternative equity investments are recorded at cost and measured at fair value when they are deemed to be impaired or when there is an adjustment from observable price changes.

The carrying amount of those non-marketable equity investments accounted for under the fair value option was $ 81 million and $ 135 million as of January 31, 2024 and October 31, 2023, respectively.

For the three months ended January 31, 2024, the Company recorded an unrealized loss of $ 54 million on these investments.

The Company did not recognize any unrealized gains or losses on these equity investments during the three months ended January 31, 2023.

The carrying amount of those non-marketable equity investments accounted for under the fair value option was $ 81 million and $ 135 million as of April 30, 2024 and October 31, 2023, respectively.

For the six months ended April 30, 2024, the Company recognized an unrealized loss of $ 54 million on these investments.

For the three and six months ended April 30, 2023, the Company recorded an unrealized gain of $ 3 million on these investments.

This amount is reflected in Interest and other, net in the Condensed Consolidated Statements of Earnings.

The carrying amount of those non-marketable equity investments accounted for under the measurement alternative was $ 154 million and $ 145 million as of January 31, 2024 and October 31, 2023, respectively.

For the three months ended January 31, 2024 the Company recognized a $ 7 million unrealized net loss on these investments.

For the three months ended January 31, 2023, the Company recognized an impairment of $ 10 million on these investments.

The carrying amount of those non-marketable equity investments accounted for under the measurement alternative was $ 159 million and $ 145 million as of April 30, 2024 and October 31, 2023, respectively.

For the six months ended April 30, 2024 the Company recognized an unrealized net loss of $ 7 million on these investments.

For the three and six months ended April 30, 2023, the Company recognized an unrealized net gain of $ 4 million and an unrealized net loss of $ 6 million, respectively, on these investments.

For the six months ended April 30, 2023, this included an impairment of $ 10 million.

These amounts are reflected in Interest and other, net in the Condensed Consolidated Statements of Earnings.

1 unchanged sentence

The gross notional and fair value of derivative instruments in the Condensed Consolidated Balance Sheets were as follows:

As of January 31, 2024 As of October 31, 2023

As of April 30, 2024 As of October 31, 2023

Fair Value Fair Value

27 unchanged sentences

Notes to Condensed Consolidated Financial Statements (Continued)

As of January 31, 2024

As of April 30, 2024

In the Condensed Consolidated Balance Sheets

19 unchanged sentences

(2) Represents the collateral posted by the Company in cash or through the re-use of counterparty cash collateral as of the respective reporting date for the Company's liability position, net of derivative amounts that could be offset, as of, generally, two business days prior to the respective reporting date.

As of January 31, 2024, of the $ 118 million of collateral posted, $ 108 million was in cash and $ 10 million was through the re-use of counterparty collateral.

As of April 30, 2024, of the $ 95 million of collateral posted, $ 69 million was in cash and $ 26 million was through the re-use of counterparty collateral.

As of October 31, 2023, of the $ 103 million of collateral posted, $ 56 million was in cash and $ 47 million was through the re-use of counterparty collateral.

1 unchanged sentence

Carrying Amount of the Hedged Liabilities Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Assets/ (Liabilities)

January 31, 2024 October 31, 2023 January 31, 2024 October 31, 2023

April 30, 2024 October 31, 2023 April 30, 2024 October 31, 2023

Long-term debt $ ( 2,378 ) $ ( 2,345 ) $ 119 $ 151

1 unchanged sentence

Gains (Losses) Recognized in OCI on Derivatives

For the three months ended January 31,

For the three months ended April 30, For the six months ended April 30,

2024 2023 2024 2023

Derivatives in Cash Flow Hedging Relationship:

6 unchanged sentences

Notes to Condensed Consolidated Financial Statements (Continued)

As of January 31, 2024, the Company expects to reclassify an estimated net accumulated other comprehensive loss of approximately $ 8 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.

As of April 30, 2024, the Company expects to reclassify an estimated net accumulated other comprehensive gain of approximately $ 40 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.

Effect of Derivative Instruments on the Condensed Consolidated Statements of Earnings

1 unchanged sentence

Gains (Losses) Recognized in Income

For the three months ended January 31,

Net Revenue Interest and Other, net Net Revenue Interest and Other, net

For the three months ended April 30, For the six months ended April 30,

2024 2023 2024 2023

Net Revenue Interest and Other, net Net Revenue Interest and Other, net Net Revenue Interest and Other, net Net Revenue Interest and Other, net

Total net revenue and interest and other, net $ 7,204 $ ( 22 ) $ 6,973 $ ( 47 ) $ 13,959 $ ( 110 ) $ 14,782 $ ( 73 )

12 unchanged sentences

Notes payable, short-term borrowings, including the current portion of long-term debt, and long-terms debt were as follows:

January 31, 2024 October 31, 2023

April 30, 2024 October 31, 2023

Current portion of long-term debt (1)

5 unchanged sentences

Total $ 11,257 $ 12,355

(1) As of January 31, 2024, the Current portion of long-term debt, net of discount and issuance costs, included $ 1.5 billion associated with the asset-backed debt securities issued by the Company.

(1) As of April 30, 2024, the Current portion of long-term debt, net of discount and issuance costs, included $ 1.4 billion associated with the asset-backed debt securities issued by the Company.

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Notes to Condensed Consolidated Financial Statements (Continued)

Asset-backed Debt Securities

In January 2024, the Company issued $ 796 million of asset-backed debt securities in six tranches at a weighted average price of 99.99 % and a weighted average interest rate of 5.476 %, payable monthly from February 2024 with a stated final maturity date of November 2031.

Unsecured Senior Notes

In April 2024, the Company repaid $ 1.0 billion of 1.45 % Senior Notes on their original maturity date.

Commercial Paper

8 unchanged sentences

In addition, the Hewlett Packard Enterprise subsidiary's euro Commercial Paper/Certificate of Deposit Program provides for the issuance of commercial paper in various currencies of up to a maximum aggregate principal amount of $ 1.0 billion.

As of January 31, 2024 and October 31, 2023, no borrowings were outstanding under the Parent Programs.

As of January 31, 2024 and October 31, 2023, $ 674 million and $ 679 million, respectively, were outstanding under the subsidiary’s program.

As of April 30, 2024 and October 31, 2023, no borrowings were outstanding under the Parent Programs.

As of April 30, 2024 and October 31, 2023, $ 646 million and $ 679 million, respectively, were outstanding under the subsidiary’s program.

Revolving Credit Facility

The Company maintains a senior unsecured revolving credit facility that was entered into in December 2021 with an aggregate lending commitment of $ 4.75 billion for a period of five years .

As of January 31, 2024 and October 31, 2023, no borrowings were outstanding under this credit facility.

As of April 30, 2024 and October 31, 2023, no borrowings were outstanding under this credit facility.

Uncommitted Credit Facility

The Company maintains an uncommitted short-term advance facility with Societe Generale that was entered into in September 2023 with a principal amount of up to $ 500 million for a period of five years .

As of January 31, 2024 and October 31, 2023, no borrowings were outstanding under this credit facility.

As of April 30, 2024 and October 31, 2023, no borrowings were outstanding under this credit facility.

Juniper Acquisition Committed Financing

2 unchanged sentences

for a $ 14.0 billion senior unsecured delayed draw term loan facility, comprised of an $ 11.0 billion 364-day tranche and a $ 3.0 billion three-year tranche, subject to customary conditions.

As of January 31, 2024, no borrowings were outstanding and HPE paid $ 42 million of financing fees.

As of April 30, 2024, no borrowings were outstanding and HPE paid $ 42 million of financing fees.

Stockholders' Equity

The components of accumulated other comprehensive loss, net of taxes as of January 31, 2024, and changes for the three months ended January 31, 2024 were as follows:

The components of accumulated other comprehensive loss, net of taxes as of April 30, 2024, and changes for the six months ended April 30, 2024 were as follows:

Net unrealized

1 unchanged sentence

securities Net unrealized

gains (losses)

flow hedges Unrealized

4 unchanged sentences

Other comprehensive income (loss) before reclassifications 3 ( 35 ) ( 1 ) ( 8 ) ( 41 )

Reclassifications of losses into earnings — 114 34 — 148

Reclassifications of (gains) losses into earnings — ( 1 ) 69 — 68

Tax benefit (provision) — 6 ( 8 ) 1 ( 1 )

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Notes to Condensed Consolidated Financial Statements (Continued)

The components of accumulated other comprehensive loss, net of taxes as of January 31, 2023, and changes for the three months ended January 31, 2023 were as follows:

The components of accumulated other comprehensive loss, net of taxes as of April 30, 2023, and changes for the six months ended April 30, 2023 were as follows:

Net unrealized

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Share Repurchase Program

For the three months ended January 31, 2024, the Company settled 0.2 million shares that were unsettled open market repurchases under its share repurchase program as of October 31, 2023.

The Company did not repurchase or settle any additional shares during the three months ended January 31, 2024.

As of January 31, 2024, the Company had a remaining authorization of approximately $ 1.0 billion for future share repurchases.

For the six months ended April 30, 2024, the Company repurchased and settled 2.8 million shares under its share repurchase program through open market repurchases, which included 0.2 million shares that were unsettled open market repurchases as of October 31, 2023.

Additionally, as of April 30, 2024, the Company had unsettled open market repurchases of 0.3 million shares.

Shares repurchased for the six months ended April 30, 2024 were recorded as a $ 50 million reduction to stockholders' equity.

As of April 30, 2024, the Company had a remaining authorization of approximately $ 0.9 billion for future share repurchases.

Net Earnings Per Share

2 unchanged sentences

The reconciliations of the numerators and denominators of each of the basic and diluted net EPS calculations were as follows:

For the three months ended January 31,

For the three months ended April 30, For the six months ended April 30,

2024 2023 2024 2023

In millions, except per share amounts

8 unchanged sentences

(1) The Company excludes shares potentially issuable under employee stock plans that could dilute basic net EPS in the future from the calculation of diluted net earnings per share, as their effect, if included, would have been anti-dilutive for the periods presented.

Litigation, Contingencies, and Commitments

Hewlett Packard Enterprise is involved in various lawsuits, claims, investigations and proceedings including those consisting of intellectual property, commercial, securities, employment, employee benefits, and environmental matters, which

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Notes to Condensed Consolidated Financial Statements (Continued)

arise in the ordinary course of business.

In addition, as part of the Separation and Distribution Agreement (the "Separation and Distribution Agreement") entered into in connection with Hewlett Packard Enterprise's spin-off from HP Inc.

(formerly known as "Hewlett-Packard Company") (the "Separation"), Hewlett Packard Enterprise and HP Inc.

Litigation, Contingencies, and Commitments

The Company and certain of its subsidiaries are involved in various lawsuits, claims, investigations and proceedings including those consisting of intellectual property, commercial, securities, employment, employee benefits, and environmental matters, which arise in the ordinary course of business.

In addition, as part of the Separation and Distribution Agreement (the "Separation and Distribution Agreement") entered into in connection with HPE's spin-off from HP Inc.

(formerly known as "Hewlett-Packard Company") (the "Separation"), HPE and HP Inc.

agreed to cooperate with each other in managing certain existing litigation related to both parties' businesses.

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arising prior to the Separation.

Hewlett Packard Enterprise records a liability when it believes that it is both probable that a liability has been incurred and the amount of loss can be reasonably estimated.

HPE records a liability when it believes that it is both probable that a liability has been incurred and the amount of loss can be reasonably estimated.

Significant judgment is required to determine both the probability of having incurred a liability and the estimated amount of the liability.

Hewlett Packard Enterprise reviews these matters at least quarterly and adjusts these liabilities to reflect the impact of negotiations, settlements, rulings, advice of legal counsel, and other updated information and events pertaining to a particular matter.

HPE reviews these matters at least quarterly and adjusts these liabilities to reflect the impact of negotiations, settlements, rulings, advice of legal counsel, and other updated information and events pertaining to a particular matter.

Litigation is inherently unpredictable.

However, Hewlett Packard Enterprise believes it has valid defenses with respect to legal matters pending against us.

However, HPE believes it has valid defenses with respect to legal matters pending against us.

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.

Hewlett Packard Enterprise believes it has recorded adequate provisions for any such matters and, as of January 31, 2024, it was not reasonably possible that a material loss had been incurred in connection with such matters in excess of the amounts recognized in its financial statements.

HPE believes it has recorded adequate provisions for any such matters and, as of April 30, 2024, it was not reasonably possible that a material loss had been incurred in connection with such matters in excess of the amounts recognized in its financial statements.

Litigation, Proceedings, and Investigations

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In January 2011, the postal service of Brazil, Empresa Brasileira de Correios e Telégrafos (“ECT”), notified a former subsidiary of HP Inc.

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

in Brazil ("HP Brazil") that it had initiated administrative proceedings to consider

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Notes to Condensed Consolidated Financial Statements (Continued)

bids and fixed results for three ECT contracts in 2007 and 2008.

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.

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This purported class and collective action was filed on August 18, 2016 in the United States District Court for the Northern District of California, against HP Inc.

and Hewlett Packard Enterprise (collectively, “Defendants”) alleging Defendants violated the Federal Age Discrimination in Employment Act (“ADEA”), the California Fair Employment and Housing Act, California public policy and the California Business and Professions Code by terminating older workers and replacing them with younger workers.

and HPE (collectively, “Defendants”) alleging Defendants violated the Federal Age Discrimination in Employment Act (“ADEA”), the California Fair Employment and Housing Act, California public policy and the California Business and Professions Code by terminating older workers and replacing them with younger workers.

Plaintiffs seek to certify a nationwide collective action under the ADEA comprised of individuals aged 40 years and older who had their employment terminated by an HP entity pursuant to a work force reduction (“WFR”) plan.

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On November 3, 2023, the Court issued an order granting preliminary approval to the Class Action and Collective Action Settlement.

The Court has scheduled a Fairness Hearing to address the parties’ Motion for Final Approval for March 28, 2024.

On March 29, 2024, the Court granted Final Approval to the settlement following a Fairness Hearing on the parties’ Motion for Final Approval.

The Court has set a November 15, 2024 deadline for the filing of a post-distribution accounting statement.

Q3 Networking Litigation.

5 unchanged sentences

On June 18, 2022, Q3 Networking filed a petition for review of the ITC ruling with the United States Court of Appeals for the Federal Circuit.

On May 10, 2024, the United States Court of Appeals for the Federal Circuit affirmed the ITC’s ruling in favor of HPE and Aruba Networks.

R2 Semiconductor Patent Litigation.

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R2 asserts that one European patent is infringed by certain Intel processors and the HPE products that contain those Intel processors.

On February 7, 2024, the Dusseldorf Regional Court ruled in R2’s favor, issuing an injunction that, if enforced by R2, would prevent the sale in Germany of any products with infringing Intel processors, and require HPE to correspond with its direct customers in Germany requesting return of the products with infringing Intel processors.

On February 7, 2024, the Dusseldorf Regional Court ruled in R2’s favor, issuing an injunction that, if enforced by R2, would prevent the sale in Germany of any products with infringing Intel processors, and require Hewlett-Packard GmbH to correspond with its direct customers in Germany requesting return of the products with infringing Intel processors.

The injunction would remain in place unless the ruling is overturned on appeal, the patent is invalidated by the German Federal Patent Court, or the matter is resolved by the parties.

On February 8, 2024, HPE filed an appeal and request for a stay of the judgement pending appeal.

Intel is indemnifying HPE pursuant to the terms of the parties’ agreement regarding patent indemnification.

Given the procedural posture and nature of the case, HPE is currently unable to make a reasonable estimate of the potential loss or range of losses, if any, that may arise from this lawsuit and that would not be indemnifiable by Intel.

Shared Litigation with HP Inc., DXC and Micro Focus

As part of the Separation and Distribution Agreements between Hewlett Packard Enterprise and HP Inc., Hewlett Packard Enterprise and DXC, and Hewlett Packard Enterprise and Seattle SpinCo, the parties to each agreement agreed to cooperate with each other in managing certain existing litigation related to both parties' businesses.

The Separation and Distribution

On February 8, 2024, Hewlett-Packard GmbH filed an appeal and request for a stay of the judgment pending appeal.

Intel is indemnifying HPE pursuant to the terms of the parties’ agreement regarding patent

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Notes to Condensed Consolidated Financial Statements (Continued)

Agreements also included provisions that assign to the parties responsibility for managing pending and future litigation related to the general corporate matters of HP Inc.

(in the case of the separation of Hewlett Packard Enterprise from HP Inc.) or of Hewlett Packard Enterprise (in the case of the separation of DXC from Hewlett Packard Enterprise and the separation of Seattle SpinCo from Hewlett Packard Enterprise), in each case arising prior to the applicable separation.

indemnification.

Shared Litigation with HP Inc., DXC Technology Company and Micro Focus International plc

As part of the Separation and Distribution Agreements between HPE and HP Inc., HPE and DXC Technology Company (“DXC”), and HPE and Seattle SpinCo (“Micro Focus”), the parties to each agreement agreed to cooperate with each other in managing certain existing litigation related to both parties' businesses.

The Separation and Distribution Agreements also included provisions that assign to the parties responsibility for managing pending and future litigation related to the general corporate matters of HP Inc.

(in the case of the separation of HPE from HP Inc.) or of HPE (in the case of the separation of DXC from HPE and the separation of Micro Focus from HPE), in each case arising prior to the applicable separation.

Environmental

The Company's operations and products are or may in the future become subject to various federal, state, local, and foreign laws and regulations concerning the environment, including laws addressing the discharge of pollutants into the air and water;

supply chain due diligence;

sustainability, environment, and emissions-related reporting;

the management, movement, and disposal of hazardous substances and wastes;

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and the operational or financial responsibility for recycling, treatment, and disposal of those products.

This includes legislation that makes producers of electrical goods, including servers and networking equipment, financially responsible for specified collection, recycling, treatment, and disposal of past and future covered products (sometimes referred to as "product take-back legislation").

This includes legislation that makes producers of electrical goods, including servers and networking equipment, responsible for repairability requirements or financially responsible for specified collection, recycling, treatment, and disposal of past and future covered products (sometimes referred to as "product take-back legislation").

The Company could incur substantial costs, its products could be restricted from entering certain jurisdictions, and it could face other sanctions, if it were to violate or become liable under environmental laws, including those related to addressing climate change and other environmental related issues, or if its products become non-compliant with such environmental laws.

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In the ordinary course of business, the Company enters into contractual arrangements under which the Company may agree to indemnify a third party to such arrangement from any losses incurred relating to the services they perform on behalf of the Company 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.

The Company also provides indemnifications to certain vendors and customers against claims of IP infringement made by third parties arising from the use by such vendors and customers of the Company's software products and support 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.

The Company also provides indemnifications to certain vendors and customers against claims of IP infringement made by third parties arising from the use by such vendors and customers of the Company's

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Notes to Condensed Consolidated Financial Statements (Continued)

software products and support 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.

Equity Method Investments

Pursuant to the Shareholders' Agreement among the Company’s relevant subsidiaries, Unisplendour International Technology Limited ("UNIS"), and H3C Technologies Co., Limited ("H3C") dated as of May 1, 2016, as amended from time to time, and most recently on October 28, 2022, the Company delivered a notice to UNIS on December 30, 2022, to exercise its right to put to UNIS, for cash consideration, all of the H3C shares held by the Company, which represent 49 % of the total issued share capital of H3C.

On May 26, 2023, the Company’s relevant subsidiaries entered into a Put Share Purchase Agreement with UNIS, whereby UNIS has agreed to purchase all of the H3C shares held by the Company, through its subsidiaries, for total pre-tax cash consideration of $ 3.5 billion.

The disposition remains subject to obtaining required regulatory approvals and completion of certain conditions necessary for closing.

On May 24, 2024, the Company’s relevant subsidiaries entered into (i) an Amended and Restated Put Share Purchase Agreement with UNIS, whereby its relevant subsidiaries shall sell to UNIS 30 % of the total issued share capital of H3C for pre-tax cash consideration of approximately $ 2.1 billion by August 31, 2024 (the “Sale Transaction”), and (ii) an Agreement on Subsequent Arrangements with UNIS, whereby upon closing of the Sale Transaction, the Company’s relevant subsidiary shall have a put option to sell to UNIS and UNIS shall have a call option to purchase from the Company’s relevant subsidiary 19 % of the total issued share capital of H3C for pre-tax cash consideration of approximately $ 1.4 billion between the 16 th month and until the 36 th month after the Sale Transaction.

The transactions referenced in clauses (i) and (ii) above, taken together, revise the arrangements governing the aforementioned sale of all of the H3C shares held by the Company, through its subsidiaries and are subject to certain grace periods and regulatory approvals.

Subsequent Event

On May 23, 2024, HPE announced plans to divest the Company’s Communications Technology Group (“CTG”) business to HCLTech.

CTG is included in our Communications and Media Solutions business, which is reported in the Corporate Investments and Other segment.

This divestiture includes the platform-based software solutions portions of the CTG portfolio, including systems integration, network applications, data intelligence, and the business support systems groups.

The disposition is subject to regulatory approvals and satisfaction of other customary closing conditions.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements