What changed in this filing

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Item 1. Financial Statements

2024-09-05 compared with 2024-06-05 · 215 added, 191 removed, 944 unchanged (30% of the section changed)

Financial Statements.

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)

Condensed Consolidated Statements of Earnings for the three and nine months ended July 3 1 , 2024 and 2023 (Unaudited)

Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended July 3 1 , 2024 and 2023 (Unaudited)

Condensed Consolidated Balance Sheets as of July 3 1 , 2024 (Unaudited) and October 31, 2023 (Audited)

Condensed Consolidated Statements of Cash Flows for the nine months ended July 3 1 , 2024 and 2023 (Unaudited)

Condensed Consolidated Statements of Stockholders' Equity for the three and nine months ended July 3 1 , 2024 and 2023 (Unaudited)

Notes to Condensed Consolidated Financial Statements (Unaudited)

6 unchanged sentences

Accounting for Leases as a Lessor

Acquisitions and Dispositions

Financial Instruments

7 unchanged sentences

Condensed Consolidated Statements of Earnings

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

For the three months ended July 31, For the nine months ended July 31,

2024 2023 2024 2023

31 unchanged sentences

Condensed Consolidated Statements of Comprehensive Income

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

For the three months ended July 31, For the nine months ended July 31,

2024 2023 2024 2023

Net earnings $ 512 $ 464 $ 1,213 $ 1,383

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:

Other Comprehensive (Loss) Income Before Taxes

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

Net unrealized gains (losses) arising during the period 3 ( 1 ) 6 4

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

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

Net unrealized losses arising during the period ( 34 ) ( 25 ) ( 69 ) ( 525 )

Net losses reclassified into earnings 3 60 2 346

( 31 ) 35 ( 67 ) ( 179 )

3 unchanged sentences

Curtailments, settlements and other — 3 1 3

33 38 101 109

Change in Cumulative Translation Adjustment ( 9 ) ( 30 ) ( 17 ) ( 11 )

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

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

Other Comprehensive (Loss) Income Before Taxes ( 4 ) 42 23 ( 77 )

Benefit (Provision) for Taxes 5 ( 13 ) 4 26

Other Comprehensive Income (Loss), Net of Taxes 1 29 27 ( 51 )

4 unchanged sentences

Condensed Consolidated Balance Sheets

April 30, 2024 October 31, 2023

July 31, 2024 October 31, 2023

(Unaudited) (Audited)

5 unchanged sentences

Inventory 7,679 4,607

Assets held for sale 6 —

Other current assets 3,516 3,047

14 unchanged sentences

Accrued restructuring 86 180

Liabilities held for sale 59 —

Other accrued liabilities 4,652 4,161

3 unchanged sentences

Commitments and Contingencies

Stockholders' Equity

HPE Stockholders' Equity:

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

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

1,298,356,235 and 1,282,630,405 shares issued and outstanding as of July 31, 2024 and October 31, 2023, respectively)

Additional paid-in capital 28,361 28,199

9 unchanged sentences

Condensed Consolidated Statements of Cash Flows (Unaudited)

For the six months ended April 30,

For the nine months ended July 31,

Cash Flows from Operating Activities:

7 unchanged sentences

Earnings from equity interests ( 161 ) ( 180 )

Dividends received from equity investees 43 34

Other, net 160 ( 7 )

9 unchanged sentences

Cash Flows from Investing Activities:

Investment in property, plant and equipment ( 1,216 ) ( 1,482 )

Investment in property, plant and equipment and software assets ( 1,759 ) ( 2,153 )

Proceeds from sale of property, plant and equipment 280 347

14 unchanged sentences

Cash dividends paid to shareholders ( 507 ) ( 465 )

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

Net cash used in financing activities ( 1,372 ) ( 168 )

Effect of exchange rate changes on cash, cash equivalents, and restricted cash ( 35 ) 138

6 unchanged sentences

Condensed Consolidated Statements of Stockholders' Equity (Unaudited)

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

For the three months ended July 31, 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

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

Net earnings 512 512 3 515

Other comprehensive gain 50 50 50

Other comprehensive income 1 1 1

Comprehensive income 513 3 516

5 unchanged sentences

( 169 ) ( 169 ) — ( 169 )

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

Balance as of July 31, 2024 1,298,356 $ 13 $ 28,361 $ ( 3,240 ) $ ( 3,057 ) $ 22,077 $ 57 $ 22,134

) 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

For the nine months ended July 31, 2024 Common Stock

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

4 unchanged sentences

Net earnings 1,213 1,213 9 1,222

Other comprehensive gain 26 26 26

Other comprehensive income 27 27 27

Comprehensive income 1,240 9 1,249

5 unchanged sentences

( 507 ) ( 507 ) ( 8 ) ( 515 )

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

Balance as of July 31, 2024 1,298,356 $ 13 $ 28,361 $ ( 3,240 ) $ ( 3,057 ) $ 22,077 $ 57 $ 22,134

Table of Content

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

For the three months ended July 31, 2023 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, 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

Net earnings 464 464 — 464

Other comprehensive gain 78 78 78

Other comprehensive income 29 29 29

Comprehensive income 493 — 493

5 unchanged sentences

( 154 ) ( 154 ) ( 154 )

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

Balance as of July 31, 2023 1,282,738 $ 13 $ 28,191 $ ( 4,433 ) $ ( 3,149 ) $ 20,622 $ 55 $ 20,677

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

Comprehensive

11 unchanged sentences

( 465 ) ( 465 ) ( 465 )

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

Balance as of July 31, 2023 1,282,738 $ 13 $ 28,191 $ ( 4,433 ) $ ( 3,149 ) $ 20,622 $ 55 $ 20,677

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

10 unchanged sentences

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 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.

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 July 31, 2024 and October 31, 2023, its results of operations for the three and nine months ended July 31, 2024 and 2023, its cash flows for the nine months ended July 31, 2024 and 2023, and its statements of stockholders' equity for the three and nine months ended July 31, 2024 and 2023.

The results of operations and the cash flows for the three and nine months ended July 31, 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.

14 unchanged sentences

Significant Accounting Policies

There have been no changes to the Company's significant accounting policies described in Part II, Item 8, Note 1, "Overview and Summary of Significant Accounting Policies," of the Company's Annual Report on Form 10-K for the fiscal year ended October 31, 2023.

There have been no significant changes to the Company's significant accounting policies described in Part II, Item 8, Note 1, "Overview and Summary of Significant Accounting Policies," of the Company's Annual Report on Form 10-K for the fiscal year ended October 31, 2023.

Table of Content

10 unchanged sentences

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 $ 365 million, and $ 295 million as of April 30, 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 $ 502 million, and $ 295 million as of July 31, 2024 and October 31, 2023, respectively.

Recently Enacted Accounting Pronouncements

Although there are new accounting pronouncements issued by the Financial Accounting Standards Board ("FASB") that the Company will adopt, as applicable, the Company does not believe any of these accounting pronouncements will have a material impact on its Condensed Consolidated Financial Statements.

In December 2023, the FASB issued guidance to provide disaggregated income tax disclosures on the rate reconciliation and income taxes paid.

24 unchanged sentences

and storage networking.

Table of Content

HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

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

It 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;

2 unchanged sentences

This segment also provides self-service private cloud on-demand with HPE GreenLake for Private Cloud Business Edition.

Infrastructure software includes monitoring and observability for day two operations and beyond through our acquisition of OpsRamp and unified data access through our HPE Ezmeral Data Fabric and analytics suite, which helps move and transform data for use in AI and other applications.

Infrastructure software includes monitoring and observability for day two

Table of Content

HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

operations and beyond through our acquisition of OpsRamp and unified data access through our HPE Ezmeral Data Fabric and analytics suite, which helps move and transform data for use in AI and other applications.

Hybrid Cloud segment also includes data lifecycle management and protection through our suite of offerings, including Zerto Disaster Recovery.

20 unchanged sentences

Investments and Other Total

Three months ended April 30, 2024:

Three months ended July 31, 2024:

Net revenue $ 4,217 $ 1,244 $ 1,110 $ 877 $ 262 $ 7,710

2 unchanged sentences

Segment earnings (loss) from operations $ 464 $ 66 $ 251 $ 79 $ ( 4 ) $ 856

Three months ended April 30, 2023:

Three months ended July 31, 2023:

Net revenue $ 3,071 $ 1,361 $ 1,453 $ 871 $ 246 $ 7,002

2 unchanged sentences

Segment earnings (loss) from operations $ 319 $ 75 $ 402 $ 72 $ ( 20 ) $ 848

Six months ended April 30, 2024:

Nine months ended July 31, 2024:

Net revenue $ 11,275 $ 3,642 $ 3,384 $ 2,616 $ 752 $ 21,669

2 unchanged sentences

Segment earnings (loss) from operations $ 1,273 $ 123 $ 841 $ 234 $ ( 23 ) $ 2,448

Six months ended April 30, 2023:

Nine months ended July 31, 2023:

Net revenue $ 10,447 $ 4,068 $ 3,957 $ 2,590 $ 722 $ 21,784

6 unchanged sentences

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

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

For the three months ended July 31, For the nine months ended July 31,

2024 2023 2024 2023

9 unchanged sentences

Disaster recovery (charges)

7 ( 3 ) 32 ( 4 )

Divestiture related exit costs ( 35 ) — ( 35 ) —

Acquisition, disposition and other related charges ( 37 ) ( 21 ) ( 126 ) ( 51 )

4 unchanged sentences

Net revenue by geographic region was as follows:

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

For the three months ended July 31, For the nine months ended July 31,

2024 2023 2024 2023

19 unchanged sentences

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

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

For the three months ended July 31, For the nine months ended July 31,

2024 2023 2024 2023

5 unchanged sentences

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

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

For the three months ended July 31, For the nine months ended July 31,

2024 2023 2024 2023

14 unchanged sentences

Non-cash items ( 2 ) 4 — 1

Liability as of April 30, 2024

Liability as of July 31, 2024

$ 71 $ 95 $ 3 $ 22

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

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

$ 818 $ 558 $ 1,267 $ 268

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

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

$ 820 $ 560 $ 1,267 $ 270

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.

The current restructuring liability related to the transformation programs, reported in the Condensed Consolidated Balance Sheets as of July 31, 2024 and October 31, 2023, was $ 86 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 July 31, 2024 and October 31, 2023, was $ 86 million and $ 110 million, respectively.

Table of Content

3 unchanged sentences

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 April 30, For the six months ended April 30,

For the three months ended July 31, For the nine months ended July 31,

2024 2023 2024 2023

13 unchanged sentences

Provision for Taxes

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.

For the three months ended July 31, 2024 and 2023, the Company recorded income tax expense of $ 96 million and $ 72 million, respectively, which reflects an effective tax rate of 15.8 % and 13.4 %, respectively.

For the nine months ended July 31, 2024 and 2023, the Company recorded income tax expense of $ 323 million and $ 298 million, respectively, which reflects an effective tax rate of 21.0 % and 17.7 %, respectively.

For the three months ended July 31, 2024, and the three and nine months ended July 31, 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.

For the three and nine months ended July 31, 2024, the Company recorded immaterial net income tax benefits related to various items discrete to the period.

For the three and nine months ended July 31, 2023, the Company recorded $ 8 million of net income tax charges and $ 17 million of net income tax benefits, respectively, related to various items discrete to the period.

For the three months ended July 31, 2023, this amount primarily included $ 15 million of net income tax charges related to U.S.

and foreign provision to tax return changes and $ 11 million of net income tax charges related to tax audit settlements and changes in uncertain tax positions, partially offset by $ 19 million of net income tax benefits related to transformation costs, and acquisition, disposition and other related charges.

For the nine months ended July 31, 2023, this amount primarily included $ 55 million of net income tax benefits related to transformation costs, and acquisition, disposition and other related charges and $ 15 million of net excess tax benefits related to stock-based compensation, partially offset by $ 32 million of net income tax charges related to tax audit settlements and changes in uncertain tax positions and $ 20 million of net income tax charges related to U.S.

and foreign provision to tax return changes.

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.

As of July 31, 2024 and October 31, 2023, the amount of unrecognized tax benefits was $ 738 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.

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

Table of Content

8 unchanged sentences

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.

As of the balance sheet date, HPE has sufficient tax credit carryforwards to offset any incremental tax liability from the adjustments in the RAR.

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.

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.

However, HPE disagreed with the IRS’ adjustments and believes the positions taken on its tax returns are more likely than not to prevail on technical merits and has continued with settlement discussions with the IRS.

During the fiscal quarter, the Company submitted a formal settlement offer to the IRS to facilitate the closing of the audit and recorded increased reserves for unrecognized tax benefits of $ 122 million.

The impact of the increase in reserves is almost entirely offset with a valuation allowance release, and the net impact to income tax expense for the three and nine months ended July 31, 2024 was not material.

It is reasonably possible that the IRS audit for fiscal 2017 through 2019 may be concluded in the next 12 months, and it is reasonably possible that existing unrecognized tax benefits related to these years may be reduced by an amount up to $ 358 million within the next 12 months, the majority of which relates to adjustments to foreign tax credits that carry a full valuation allowance or to the timing of intercompany royalty revenue recognition, neither of which affects the Company’s effective tax rate.

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:

April 30, 2024 October 31, 2023

July 31, 2024 October 31, 2023

Deferred tax assets $ 2,287 $ 2,264

3 unchanged sentences

Cash, Cash Equivalents and Restricted Cash

April 30, 2024 October 31, 2023

July 31, 2024 October 31, 2023

Cash and cash equivalents $ 3,642 $ 4,270

2 unchanged sentences

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

April 30, 2024 October 31, 2023

July 31, 2024 October 31, 2023

Purchased parts and fabricated assemblies $ 5,209 $ 2,940

5 unchanged sentences

Property, Plant and Equipment, net

April 30, 2024 October 31, 2023

July 31, 2024 October 31, 2023

Land $ 66 $ 66

4 unchanged sentences

Property, plant and equipment, net $ 5,738 $ 5,989

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

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

July 31, 2024 October 31, 2023

Balance at beginning of period $ 318 $ 360

7 unchanged sentences

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

April 30, 2024 October 31, 2023

July 31, 2024 October 31, 2023

Accounts receivable $ 3,558 $ 3,254

2 unchanged sentences

Total $ 3,857 $ 3,481

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

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

July 31, 2024 October 31, 2023

Balance at beginning of period $ 37 $ 25

7 unchanged sentences

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

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 three and nine months ended July 31, 2024, the Company sold $ 0.7 billion and $ 2.3 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.

The Company recorded an obligation of $ 46 million and $ 80 million within Notes payable and short-term borrowings in its Condensed Consolidated Balance Sheets as of July 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.

Contract Liabilities and Remaining Performance Obligations

1 unchanged sentence

A summary of contract liabilities were as follows:

April 30, 2024 October 31, 2023

July 31, 2024 October 31, 2023

Location In millions

5 unchanged sentences

Total deferred revenue $ 7,348 $ 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.

For the nine months ended July 31, 2024, approximately $ 3.1 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 April 30, 2024, the aggregate amount of deferred revenue, was $ 7.3 billion.

As of July 31, 2024, the aggregate amount of deferred revenue, was $ 7.3 billion.

The Company expects to recognize approximately 18 % of this balance over fiscal 2024 with the remainder to be recognized thereafter.

1 unchanged sentence

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.

As of July 31, 2024, the aggregate amount of customer deposits was $ 586 million.

The Company expects to recognize $ 538 million over the next twelve months and the remaining balance thereafter.

Costs to Obtain a Contract

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 July 31, 2024, the current and non-current portions of the capitalized costs to obtain a contract were $ 88 million and $ 138 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 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.

For the three and nine months ended July 31, 2024 the Company amortized $ 27 million and $ 79 million respectively, of capitalized costs to obtain a contract.

For the three and nine months ended July 31, 2023 the Company amortized $ 24 million and $ 69 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.

8 unchanged sentences

The components of financing receivables were as follows:

April 30, 2024 October 31, 2023

July 31, 2024 October 31, 2023

Minimum lease payments receivable $ 9,623 $ 9,363

9 unchanged sentences

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

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.

For the nine months ended July 31, 2024 and the fiscal year ended October 31, 2023, the Company sold $ 58 million and $ 237 million of financing receivables, respectively.

Credit Quality Indicators

4 unchanged sentences

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 April 30, 2024, presented on amortized cost basis by year of origination was as follows:

As of April 30, 2024

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

As of July 31, 2024

Low Moderate High

23 unchanged sentences

Allowance for Credit Losses

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

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

July 31, 2024 October 31, 2023

Balance at beginning of period $ 243 $ 325

Provision for credit losses 34 58

Adjustment to the existing allowance ( 1 ) —

Write-offs ( 67 ) ( 140 )

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

April 30, 2024 October 31, 2023

July 31, 2024 October 31, 2023

Current 1-30 days $ 344 $ 320

12 unchanged sentences

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

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

For the three months ended July 31, For the nine months ended July 31,

2024 2023 2024 2023

11 unchanged sentences

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 April 30, 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 July 31, 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.

April 30, 2024 October 31, 2023

July 31, 2024 October 31, 2023

Assets held by VIE:

7 unchanged sentences

Long-term debt, net of unamortized debt issuance costs $ 1,409 $ 1,082

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 nine months ended July 31, 2024, financing receivables and leased equipment transferred via securitization through the SPE were $ 1.2 billion and $ 0.6 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.

Acquisitions and Dispositions

Pending Merger with Juniper Networks, Inc.

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

Pending Disposition of Communications Technology Group ("CTG")

On May 23, 2024, HPE announced plans to divest the CTG business to HCLTech.

CTG is included in the 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.

As of July 31, 2024, assets and liabilities to be sold have been presented in the Condensed Consolidated Balance Sheet as assets and liabilities held for sale.

Goodwill is tested for impairment at the reporting unit level.

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.

As of July 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.

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 April 30, 2024 and October 31, 2023.

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

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

2 unchanged sentences

Goodwill adjustments — ( 1 ) 1 — — —

Balance as of April 30, 2024

Balance as of July 31, 2024

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

6 unchanged sentences

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 April 30, 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 July 31, 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 April 30, 2024, and excess of fair value over carrying value of 4 % as of the interim test date.

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Notes to Condensed Consolidated Financial Statements (Continued)

The HPC & AI reporting unit has goodwill of $ 2.0 billion as of July 31, 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.

2 unchanged sentences

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date.

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Notes to Condensed Consolidated Financial Statements (Continued)

The Company uses valuation techniques that are based upon observable and unobservable inputs.

1 unchanged sentence

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

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

As of July 31, 2024 As of October 31, 2023

Measured Using Fair Value

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(1) Available-for-sale debt securities with carrying values that approximate fair value.

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HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

Other Fair Value Disclosures

Short-Term and Long-Term Debt:

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.

As of July 31, 2024 and October 31, 2023, the estimated fair value of the Company's short-term and long-term debt was $ 12.0 billion and $ 12.2 billion, respectively.

As of July 31, 2024 and October 31, 2023, the carrying value of the Company's short-term and long-term debt was $ 11.8 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.

5 unchanged sentences

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)

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.

For the three months ended July 31, 2024, the Company recognized an unrealized net gain of $ 7 million on these investments.

For the three months ended July 31, 2023, the Company recognized an immaterial unrealized net gain on these investments.

For the nine months ended July 31, 2023, the Company recognized an unrealized net loss of $ 6 million on these investments which 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 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.

For investments still held as of July 31, 2024, the cumulative upward adjustments for observable price changes was $ 48 million and cumulative downward adjustments for observable price changes and impairments was $ 88 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 April 30, 2024 As of October 31, 2023

As of July 31, 2024 As of October 31, 2023

Cost Gross Unrealized Gains (Losses) Fair

9 unchanged sentences

Total cash equivalents and available-for-sale debt investments $ 2,589 $ 6 $ 2,595 $ 2,696 $ — $ 2,696

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.

As of July 31, 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 April 30, 2024 and October 31, 2023.

as of July 31, 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.

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HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

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

As of April 30, 2024

As of July 31, 2024

Amortized Cost Fair Value

5 unchanged sentences

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 $ 88 million and $ 135 million as of July 31, 2024 and October 31, 2023, respectively.

For the three and nine months ended July 31, 2024, the Company recognized an unrealized gain of $ 7 million and an unrealized loss of $ 47 million, respectively, on these investments.

For the three and nine months ended July 31, 2023, the Company recorded an unrealized gain of $ 2 million and $ 5 million, respectively, 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 $ 166 million and $ 145 million as of July 31, 2024 and October 31, 2023, respectively.

For the three months ended July 31, 2024, the Company recognized an unrealized gain of $ 7 million on these investments.

For the three months ended July 31, 2023, the Company recognized an immaterial unrealized net gain on these investments.

For the nine months ended July 31, 2023, the Company recognized an unrealized net loss of $ 6 million on these investments, which included an impairment of $ 10 million.

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

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Notes to Condensed Consolidated Financial Statements (Continued)

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 $ 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.

Fair Value of Derivative Instruments in the Condensed Consolidated Balance Sheets

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

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

As of July 31, 2024 As of October 31, 2023

Fair Value Fair Value

24 unchanged sentences

The information related to the potential effect of the Company's use of the master netting agreements and collateral security agreements were as follows:

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Notes to Condensed Consolidated Financial Statements (Continued)

As of April 30, 2024

As of July 31, 2024

In the Condensed Consolidated Balance Sheets

7 unchanged sentences

Derivative liabilities $ 235 $ — $ 235 $ 160 $ 60 (2)

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Notes to Condensed Consolidated Financial Statements (Continued)

As of October 31, 2023

10 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 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 July 31, 2024, of the $ 60 million of collateral posted, $ 19 million was in cash and $ 41 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)

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

July 31, 2024 October 31, 2023 July 31, 2024 October 31, 2023

Long-term debt $ ( 2,416 ) $ ( 2,345 ) $ 82 $ 151

1 unchanged sentence

Gains (Losses) Recognized in OCI on Derivatives

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

For the three months ended July 31, For the nine months ended July 31,

2024 2023 2024 2023

4 unchanged sentences

Total $ ( 2 ) $ ( 69 ) $ ( 56 ) $ ( 668 )

As of July 31, 2024, the Company expects to reclassify an estimated net accumulated other comprehensive gain of approximately $ 11 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.

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Notes to Condensed Consolidated Financial Statements (Continued)

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 April 30, For the six months ended April 30,

For the three months ended July 31, For the nine months ended July 31,

2024 2023 2024 2023

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

April 30, 2024 October 31, 2023

July 31, 2024 October 31, 2023

Current portion of long-term debt (1)

5 unchanged sentences

Total $ 11,803 $ 12,355

(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.

(1) As of July 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.

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

Asset-backed Debt Securities

In June 2024, the Company issued $ 818 million of asset-backed debt securities in six tranches at a weighted average price of 99.99 % and a weighted average interest rate of 5.593 %, payable monthly from July 2024 with a stated final maturity date of April 2032.

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.

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 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.

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

As of July 31, 2024 and October 31, 2023, $ 635 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 April 30, 2024 and October 31, 2023, no borrowings were outstanding under this credit facility.

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

As of July 31, 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 April 30, 2024, no borrowings were outstanding and HPE paid $ 42 million of financing fees.

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

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HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

Stockholders' Equity

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:

The components of accumulated other comprehensive loss, net of taxes as of July 31, 2024, and changes for the nine months ended July 31, 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 6 ( 69 ) ( 2 ) ( 17 ) ( 82 )

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

Reclassifications of losses into earnings — 2 103 — 105

Tax benefit (provision) — 15 ( 12 ) 1 4

Balance at end of period $ 6 $ 9 $ ( 2,418 ) $ ( 654 ) $ ( 3,057 )

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Notes to Condensed Consolidated Financial Statements (Continued)

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:

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

Net unrealized

gains (losses) on

(losses) gains on

available-for-sale

11 unchanged sentences

Share Repurchase Program

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.

For the nine months ended July 31, 2024, the Company repurchased and settled 5.3 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 July 31, 2024, the Company had unsettled open market repurchases of 0.1 million shares.

Shares repurchased for the nine months ended July 31, 2024 were recorded as a $ 100 million reduction to stockholders' equity.

As of July 31, 2024, the Company had a remaining authorization of approximately $ 0.9 billion for future share repurchases.

Net Earnings Per Share

1 unchanged sentence

Diluted net EPS includes the weighted-average dilutive effect of outstanding restricted stock units, stock options, and performance-based awards.

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HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

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 April 30, For the six months ended April 30,

For the three months ended July 31, For the nine months ended July 31,

2024 2023 2024 2023

9 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.

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Notes to Condensed Consolidated Financial Statements (Continued)

Litigation, Contingencies, and Commitments

12 unchanged sentences

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.

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.

HPE believes it has recorded adequate provisions for any such matters and, as of July 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.

Litigation, Proceedings, and Investigations

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The complaint alleges various California state law claims, including California’s Equal Pay Act, Fair Employment and Housing Act, and Unfair Competition Law, and seeks certification of a California-only class of female employees employed in certain “Covered Positions.” The parties subsequently reached an agreement to resolve this class action.

The terms of the settlement are reflected in Plaintiff’s Motion for Preliminary Approval of Class Action Settlement and Certification of Settlement Class, which was filed with the Court on September 26, 2022.

The terms of the settlement are reflected

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Notes to Condensed Consolidated Financial Statements (Continued)

in Plaintiff’s Motion for Preliminary Approval of Class Action Settlement and Certification of Settlement Class, which was filed with the Court on September 26, 2022.

On November 3, 2022, the Court granted Plaintiff’s motion and preliminarily approved the terms of the class settlement, which defines the settlement class as all “[w]omen actively employed in California by Defendant at any point from November 1, 2015, through the date of Preliminary Approval” who were employed in a covered job code.

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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

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Notes to Condensed Consolidated Financial Statements (Continued)

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

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Notes to Condensed Consolidated Financial Statements (Continued)

Q3 Networking Litigation.

6 unchanged sentences

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.

Q3 Networking has not sought further review of the Federal Circuit’s ruling and HPE considers the matter closed.

R2 Semiconductor Patent Litigation.

2 unchanged sentences

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 Hewlett-Packard GmbH 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 HPE 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, 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)

indemnification.

On February 8, 2024, HPE, Intel, HP Inc., and Dell filed an appeal and request for a stay of the judgment pending appeal.

On April 9, 2024 the request for a stay pending appeal was denied.

The hearing on the underlying appeal is scheduled for December 12, 2024.

On April 3, 2024, R2 filed a lawsuit in France in the first instance court in Paris (Tribunal judiciare de Paris) against Intel Corporation, Intel Corporation SAS, Intel Deutschland GmbH, HP France SAS and certain other Intel customers.

In May 2024, R2 filed suit in Milan against Intel Corporation Italia S.P.A., Hewlett-Packard Italiana S.r.l., and certain other Intel customers.

R2 asserts the same European patent is infringed in both the French and Italian actions.

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

Intel is in negotiations to enter into three separate confidential agreements with R2, Third Point (the controlling shareholder) and TRGP Capital (a third-party organization funding the lawsuits) to resolve the litigations.

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.

16 unchanged sentences

The amount and timing of costs to comply with environmental laws are difficult to predict.

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Notes to Condensed Consolidated Financial Statements (Continued)

In particular, the Company may become a party to, or otherwise involved in, proceedings brought by U.S.

10 unchanged sentences

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

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Notes to Condensed Consolidated Financial Statements (Continued)

software products and support services and certain other matters.

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.

5 unchanged sentences

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.

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

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HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

Subsequent Events

On September 4, 2024, pursuant to the Amended and Restated Put Share Purchase Agreement with UNIS (as described in Note 16 “Equity Method Investments”), the Company received $ 2.1 billion of pre-tax consideration ($ 2.0 billion post-tax), in connection with the sale to UNIS of 30 % of the total issued share capital of H3C.

Subsequent to July 31, 2024, and in connection with the Company’s anticipated acquisition of Juniper Networks, the Company entered into interest rate locks for an aggregate notional amount of $ 2.6 billion.

These contracts are designated as cash flow hedges.

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