What changed in this filing

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Item 1. Financial Statements

2025-03-07 compared with 2024-09-05 · 314 added, 448 removed, 711 unchanged (52% of the section changed)

Financial Statements.

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)

Condensed Consolidated Statements of Earnings for the three months ended J anuary 31, 202 5 and 202 4 (Unaudited)

Condensed Consolidated Statements of Comprehensive Income for the three months ended J anuary 31, 202 5 and 202 4 (Unaudited)

Condensed Consolidated Balance Sheets as of J anuary 31, 202 5 (Unaudited) and October 31, 202 4 (Audited)

Condensed Consolidated Statements of Cash Flows for the three months ended J anuary 31, 202 5 and 202 4 (Unaudited)

Condensed Consolidated Statements of Stockholders' Equity for the three months ended J anuary 31, 202 5 and 202 4 (Unaudited)

Notes to Condensed Consolidated Financial Statements (Unaudited)

11 unchanged sentences

Litigation, Contingencies, and Commitments

Equity Method Investments

Subsequent Events

2 unchanged sentences

Condensed Consolidated Statements of Earnings

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

2024 2023 2024 2023

For the three months ended January 31,

In millions, except per share amounts

4 unchanged sentences

Costs and Expenses:

Cost of products 3,438 2,744 8,998 8,942

Cost of services 1,708 1,646 5,032 4,892

Cost of products (exclusive of amortization shown separately below) 3,762 2,543

Cost of services (exclusive of amortization shown separately below) 1,669 1,636

Financing cost 128 119

3 unchanged sentences

Transformation costs 15 20

Disaster charges 5 1 5 5

Acquisition, disposition and other related charges 37 21 126 51

Acquisition, disposition and other charges 66 43

Total costs and expenses 7,421 6,230

1 unchanged sentence

Interest and other, net 39 ( 88 )

Gain on sale of a business 244 —

Earnings from equity interests 17 46

1 unchanged sentence

Provision for taxes ( 106 ) ( 96 )

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

Net Earnings Per Share:

Net earnings attributable to HPE 627 387

Preferred stock dividends ( 29 ) —

Net earnings attributable to common stockholders $ 598 $ 387

Net Earnings Per Share Attributable to Common Stockholders:

Basic $ 0.45 $ 0.30

7 unchanged sentences

Condensed Consolidated Statements of Comprehensive Income

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 (Loss) Income Before Taxes

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

For the three months ended January 31,

Net earnings attributable to HPE $ 627 $ 387

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 ( 1 ) 6

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

Net unrealized gains (losses) arising during the period 270 ( 204 )

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 )

Net (gains) losses reclassified into earnings ( 213 ) 114

Change in Unrealized Components of Defined Benefit Plans:

Net unrealized losses arising during the period ( 1 ) ( 2 ) ( 2 ) ( 2 )

Amortization of net actuarial loss and prior service benefit 30 34

Curtailments, settlements and other — 3 1 3

33 38 101 109

Change in Cumulative Translation Adjustment:

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

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

Other Comprehensive Income (Loss) Before Taxes 64 ( 37 )

(Provision) Benefit for Taxes ( 14 ) 13

Other Comprehensive Income (Loss), Net of Taxes 50 ( 24 )

4 unchanged sentences

Condensed Consolidated Balance Sheets

July 31, 2024 October 31, 2023

January 31, 2025 October 31, 2024

(Unaudited) (Audited)

12 unchanged sentences

Goodwill 18,086 18,086

Intangible assets 477 654

Intangible assets, net 508 510

Total assets $ 70,327 $ 71,262

14 unchanged sentences

HPE Stockholders' Equity:

7.625 % Series C mandatory convertible preferred stock, $ 0.01 par value ( 30,000,000 shares issued and outstanding as of January 31, 2025 and October 31, 2024, respectively)

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

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

1,313,391,109 and 1,297,258,235 shares issued and outstanding as of January 31, 2025 and October 31, 2024, respectively)

Additional paid-in capital 29,780 29,848

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Condensed Consolidated Statements of Cash Flows (Unaudited)

For the nine months ended July 31,

For the three months ended January 31,

Cash Flows from Operating Activities:

Net earnings $ 1,213 $ 1,383

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

Net earnings attributable to HPE $ 627 $ 387

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

Depreciation and amortization 599 657

4 unchanged sentences

Earnings from equity interests ( 17 ) ( 46 )

Dividends received from equity investees 43 34

Gain on sale of a business ( 244 ) —

H3C divestiture related severance costs 77 —

Other, net 60 72

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Other assets and liabilities ( 1,077 ) ( 233 )

Net cash provided by operating activities 2,311 1,585

Net cash (used in) provided by operating activities ( 390 ) 64

Cash Flows from Investing Activities:

5 unchanged sentences

Financial collateral received 210 271

Payments made in connection with business acquisitions, net of cash acquired — ( 761 )

Proceeds from sale of a business 210 —

Net cash used in investing activities ( 23 ) ( 740 )

3 unchanged sentences

Payment of debt ( 486 ) ( 515 )

Cash settlement for derivative hedging debt — ( 7 )

Net payments related to stock-based award activities ( 169 ) ( 94 )

Repurchase of common stock ( 100 ) ( 366 )

Repurchases of common stock ( 52 ) ( 3 )

Cash dividends paid to non-controlling interests, net of contributions ( 8 ) ( 8 )

Cash dividends paid to shareholders ( 507 ) ( 465 )

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

Cash dividends paid to preferred stockholders ( 25 ) —

Cash dividends paid to common stockholders ( 171 ) ( 169 )

Net cash (used in) provided by financing activities ( 797 ) 53

Effect of exchange rate changes on cash, cash equivalents, and restricted cash ( 43 ) 14

Decrease in cash, cash equivalents and restricted cash ( 676 ) ( 1,631 )

Change in cash, cash equivalents and restricted cash ( 1,253 ) ( 609 )

Cash, cash equivalents and restricted cash at beginning of period 15,105 4,581

4 unchanged sentences

Condensed Consolidated Statements of Stockholders' Equity (Unaudited)

For the three months ended July 31, 2024 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 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 income 1 1 1

Comprehensive income 513 3 516

Stock-based compensation expense 80 80 80

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

Issuance of common stock in connection with employee stock plans and other 2,846 29 29 29

Repurchases of common stock ( 2,421 ) ( 50 ) ( 50 ) ( 50 )

Cash dividends declared ($ 0.13 per share)

( 169 ) ( 169 ) — ( 169 )

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 nine months ended July 31, 2024 Common Stock

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

Common Stock Preferred Stock

For the three months ended January 31, 2025 Number of Shares Par Value Number of 7.625 %

Series C Mandatory

Additional Paid-in Capital Accumulated Deficit Accumulated

Comprehensive

2 unchanged sentences

Balance as of October 31, 2024 1,297,258 $ 13 30,000 $ 29,848 $ ( 2,068 ) $ ( 2,977 ) $ 24,816 $ 64 $ 24,880

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

Net earnings attributable to HPE 627 627 2 629

Other comprehensive income 50 50 50

4 unchanged sentences

Repurchases of common stock ( 2,295 ) ( 48 ) ( 2 ) ( 50 ) ( 50 )

Cash dividends declared ($ 0.39 per share)

Dividend on preferred stock accrued / declared

($ 0.95 per preferred share)

( 29 ) ( 29 ) ( 29 )

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

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For the three months ended July 31, 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 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 income 29 29 29

Comprehensive income 493 — 493

Stock-based compensation expense 91 91 91

Tax withholding related to vesting of employee stock plans ( 11 ) ( 11 ) ( 11 )

Issuance of common stock in connection with employee stock plans and other 3,288 22 22 22

Repurchases of common stock ( 12,053 ) ( 185 ) ( 185 ) ( 185 )

Cash dividends declared ($ 0.13 per share)

( 171 ) ( 171 ) ( 8 ) ( 179 )

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

Balance as of January 31, 2025 1,313,391 $ 13 30,000 $ 29,780 $ ( 1,642 ) $ ( 2,927 ) $ 25,224 $ 58 $ 25,282

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

Comprehensive

2 unchanged sentences

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

Net earnings 1,383 1,383 10 1,393

Net earnings attributable to HPE 387 387 4 391

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

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( 169 ) ( 169 ) ( 8 ) ( 177 )

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

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

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 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.

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, 2025 and October 31, 2024, its results of operations, cash flows, and statements of stockholders' equity for the three months ended January 31, 2025 and 2024.

The results of operations and the cash flows for the three months ended January 31, 2025 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, 2024, as filed with the U.S.

Securities and Exchange Commission (“SEC”) on December 19, 2024.

Segment Realignment

As previously disclosed, effective as of the beginning of the first quarter of fiscal 2024, in order to align the segment financial reporting more closely with its business structure, the Company established two new reportable segments, Hybrid Cloud and Server.

Hybrid Cloud includes the historical Storage segment, HPE GreenLake Flex Solutions (which provides flexible as-a-service IT infrastructure through the HPE GreenLake edge-to-cloud platform and was previously reported under the Compute and the High Performance Computing & Artificial Intelligence ("HPC & AI") segments), Private Cloud, and Software (previously reported under the Corporate Investments and Other segment).

The Server segment combines the previously separately reported Compute and HPC & AI segments, with adjustments for certain product lines that are now reported in Hybrid Cloud.

Additionally, certain products and services previously reported in the financial results for the HPC & AI segment were moved to be reported in the Hybrid Cloud segment, and the Athonet business and certain components of the Communications and Media Solutions (“CMS”) business, both previously reported in the financial results for Corporate Investments and Other, moved to be reported in the Intelligent Edge segment.

As a result, the Company’s new organizational structure consists of the following segments:

(ii) Hybrid Cloud;

(iii) Intelligent Edge;

(iv) Financial Services;

and (v) Corporate Investments and Other.

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.

These changes had no impact on Hewlett Packard Enterprise’s previously reported consolidated net revenue, net earnings, net earnings per share (“EPS”) or total assets.

Significant Accounting Policies

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, 2024.

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HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

Recently Adopted Accounting Pronouncements

In September 2022, FASB issued guidance to enhance the transparency of supplier finance programs.

The amendments require the disclosure of sufficient information about the program to allow a user of the financial statements to understand the program’s nature, activity during the period, changes from period to period and potential magnitude.

The Company adopted this guidance in the first quarter of fiscal 2024 except for the disclosure on the roll forward information, which is effective for fiscal 2025.

The Company enters into supplier financing arrangements with external financial institutions.

Under these arrangements, suppliers can choose to settle outstanding payment obligations at a discount.

The Company holds no economic interest in suppliers' participation, nor does it provide guarantees or pledge assets under these arrangements.

Invoices are settled with the financial institutions based on the original supplier payment terms.

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

Recently Enacted Accounting Pronouncements

In November 2024, the FASB issued guidance to provide disaggregated expense disclosures in the Consolidated Financial Statements.

The Company is required to adopt the guidance for its annual period ending October 31, 2028 and all interim periods thereafter, though early adoption is permitted.

The Company is currently evaluating the impact of this amendment 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.

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Server, Hybrid Cloud, Intelligent Edge, Financial Services (“FS”), and Corporate Investments and Other.

Hewlett Packard Enterprise's organizational structure is based on a number of factors that the Chief Operating Decision Maker (“CODM”), who is the Chief Executive Officer, uses to evaluate, view, and run the Company's business operations, which include, but are not limited to, customer base and homogeneity of products, services and technology.

Hewlett Packard Enterprise's organizational structure is based on a number of factors that the Chief Operating Decision Maker (“CODM”), who is the Chief Executive Officer, uses to evaluate, view and run the Company's business operations, which include, but are not limited to, customer base and homogeneity of products and technology.

The five segments are based on this organizational structure and information reviewed by Hewlett Packard Enterprise's management to evaluate segment results.

Effective as of the beginning of the first quarter of fiscal 2024, in order to align the Company’s segment financial reporting more closely with its current business structure, the Company realigned its reportable segments, see Note 1, "Overview and Summary of Significant Accounting Policies" to the Condensed Consolidated Financial Statements for additional information.

A summary description of each segment follows:

A summary of the types of products and services within each segment is as follows:

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HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

Server consists of general-purpose servers for multi-workload computing and workload-optimized servers to deliver the best performance and value for demanding applications, and integrated systems comprised of software and hardware designed to address High-Performance Computing and Supercomputing (including exascale applications), Artificial Intelligence (“AI”), Data Analytics, and Transaction Processing workloads for government and commercial customers globally.

This portfolio of products includes our secure and versatile HPE ProLiant Rack and Tower servers;

This portfolio of products includes the secure and versatile HPE ProLiant Rack and Tower servers;

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

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Server offerings also include operational and support services sold with systems and as standalone services.

Hybrid Cloud offers a wide variety of cloud-native and hybrid solutions across storage, private cloud and the infrastructure software-as-a-service space.

Hybrid Cloud offers a wide variety of cloud-native and hybrid solutions across storage, private cloud and the infrastructure software-as-a-service (“SaaS”) space.

Storage includes data storage and data management offerings with the HPE Alletra Storage portfolio;

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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;

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

a full suite of private cloud offerings that enable customers to self-manage or choose a fully managed experience;

and a portfolio of world-class AI infrastructure delivered as-a-service.

and a portfolio of world-class AI infrastructure delivered as-a-service (“aaS”).

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

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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.

Infrastructure software includes monitoring and observability for day two operations and beyond through the Company’s acquisition of OpsRamp and unified data access through 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 its suite of offerings, including Zerto Disaster Recovery.

Intelligent Edge offers wired and wireless local area networks, campus, branch, and data center switching, software-defined wide-area-networks, private and public cellular network software, network security, and associated services that enable secure connectivity for businesses of any size.

The HPE Aruba Networking product portfolio includes hardware products such as Wi-Fi access points, switches, and gateways.

The HPE Aruba Networking software and services portfolio includes cloud-based management, network management, network access control, software-defined wide-area networking, network security, analytics and assurance, location services software, private and public cellular core software, and professional and support services, as well as as-a-service and consumption models through the HPE GreenLake edge-to-cloud platform for the Intelligent Edge portfolio of products.

The HPE Aruba Networking software and services portfolio includes cloud-based management, network management, network access control, software-defined wide-area networking, network security, analytics and assurance, location services software, private and public cellular core software, and professional and support services, as well as aaS and consumption models through the HPE GreenLake cloud for the Intelligent Edge portfolio of products.

Intelligent Edge offerings are consolidated in the edge service platform, which takes a cloud-native approach that provides customers with a unified framework to meet their connectivity, security, and financial needs across campus, branch, data center, and remote worker environments.

Financial Services provides flexible investment solutions, such as leasing, financing, IT consumption, utility programs, and asset management services for customers that facilitate unique technology deployment models and the acquisition of complete IT solutions, including hardware, software, and services from Hewlett Packard Enterprise and others.

FS also supports financial solutions for on-premise flexible consumption models, such as the HPE GreenLake edge-to-cloud platform.

FS also supports financial solutions for on-premise flexible consumption models, such as the HPE GreenLake cloud.

Corporate Investments and Other includes the Advisory and Professional Services (“A & PS”) business, which primarily offers consultative-led services, HPE and partner technology expertise and advice, implementation services as well as complex solution engagement capabilities;

CMS, which primarily offers software and related services to the telecommunications industry;

and Hewlett Packard Labs, which is responsible for research and development.

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Hewlett Packard Enterprise does not allocate to its segments certain operating expenses, which it manages at the corporate level.

These unallocated operating costs include certain corporate costs and eliminations, stock-based compensation expense, amortization of intangible assets, transformation costs, disaster recovery/charges, and acquisition, disposition and other related charges.

Total assets by segment are not presented as that information is not used to allocate resources or assess performance at the segment level and is not reviewed by our CODM.

Total assets by segment are not presented as that information is not used to allocate resources or assess performance at the segment level and is not reviewed by the CODM.

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Investments and Other Total

Three months ended July 31, 2024:

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

Intersegment net revenue 63 56 11 2 — 132

Total segment net revenue $ 4,280 $ 1,300 $ 1,121 $ 879 $ 262 $ 7,842

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

Three months ended July 31, 2023:

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

Intersegment net revenue 97 36 3 2 — 138

Total segment net revenue $ 3,168 $ 1,397 $ 1,456 $ 873 $ 246 $ 7,140

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

Nine months ended July 31, 2024:

Three months ended January 31, 2025:

Net revenue $ 4,271 $ 1,367 $ 1,147 $ 872 $ 197 $ 7,854

2 unchanged sentences

Segment earnings (loss) from operations $ 348 $ 99 $ 314 $ 82 $ ( 2 ) $ 841

Nine months ended July 31, 2023:

Three months ended January 31, 2024:

Net revenue (1)

$ 3,221 $ 1,231 $ 1,193 $ 872 $ 238 $ 6,755

Intersegment net revenue 106 42 8 1 — 157

Total segment net revenue (1)

$ 3,327 $ 1,273 $ 1,201 $ 873 $ 238 $ 6,912

Segment earnings (loss) from operations (1)

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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 July 31, For the nine months ended July 31,

$ 379 $ 51 $ 353 $ 74 $ ( 10 ) $ 847

(1) Effective at the beginning of the first quarter of fiscal 2025, in order to align its segment financial reporting more closely with its current business structure, HPE implemented an organizational change with the transfer of certain managed services, previously reported within the Server reportable segment, to the Hybrid Cloud reportable segment.

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

For the three months ended January 31,

Total segments $ 7,911 $ 6,912

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Transformation costs ( 15 ) ( 20 )

Disaster recovery (charges)

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

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

Gain on sale of a business 244 —

H3C divestiture related severance costs ( 77 ) —

Acquisition, disposition and other charges ( 63 ) ( 18 )

Interest and other, net 39 ( 88 )

1 unchanged sentence

Total earnings before provision for taxes $ 733 $ 483

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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 July 31, For the nine months ended July 31,

2024 2023 2024 2023

For the three months ended January 31,

United States $ 2,518 $ 2,294

Americas excluding U.S.

528 539 1,595 1,628

Americas excluding United States 874 507

Total Americas 3,392 2,801

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Transformation programs are comprised of the Cost Optimization and Prioritization Plan and the HPE Next Plan.

During the third quarter of fiscal 2020, the Company launched the Cost Optimization and Prioritization Plan, which focuses on realigning the workforce to areas of growth, real estate strategies, and simplifying and evolving our product portfolio strategy.

The primary elements of both plans were completed by the end of fiscal 2024.

During the third quarter of fiscal 2020, the Company launched the Cost Optimization and Prioritization Plan, which focused on realigning the workforce to areas of growth, a new hybrid workforce model called Edge-to-Office, real estate strategies, and simplifying and evolving the Company’s product portfolio strategy.

The transformation costs predominantly related to labor restructuring, non-labor restructuring, IT investments, design and execution charges and real estate initiatives.

The primary elements of the Cost Optimization and Prioritization Plan have been substantially completed by the end of fiscal 2023.

During the third quarter of fiscal 2017, the Company launched the HPE Next Plan to put in place a purpose-built company designed to compete and win in the markets where it participates.

Through this program, the Company has been simplifying the operating model, and streamlining its offerings, business processes and business systems to improve its strategy execution.

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 July 31, For the nine months ended July 31,

2024 2023 2024 2023

Program management $ — $ 2 $ 2 $ 4

IT costs 3 — 10 16

Restructuring charges 4 38 22 127

Total $ 7 $ 40 $ 34 $ 147

HPE Next Plan

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

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

2024 2023 2024 2023

IT costs $ 10 $ 25 $ 38 $ 74

Restructuring charges ( 2 ) — ( 2 ) 6

Other — — — 1

Total $ 8 $ 25 $ 36 $ 81

Restructuring Plan

Through this program, the Company simplified the operating model, and streamlined its offerings, business processes and business systems to improve its strategy execution.

The transformation charges relating to both plans were $ 15 million and $ 21 million for the three months ended January 31, 2025 and 2024, respectively.

Restructuring activities related to the Company's employees and infrastructure under the Cost Optimization and Prioritization Plan and HPE Next Plan are presented in the table below:

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Severance Infrastructure

and other Employee

Severance Infrastructure

and other Infrastructure

Liability as of October 31, 2024

$ 67 $ 94 $ 23

Charges (credits) 25 ( 3 ) — ( 2 )

Cash payments ( 9 ) ( 5 ) ( 2 )

Non-cash items ( 3 ) ( 1 ) —

Liability as of July 31, 2024

Liability as of January 31, 2025

$ 55 $ 88 $ 21

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

Total costs incurred to date, as of January 31, 2025

$ 823 $ 563 $ 271

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

Total expected costs to be incurred as of January 31, 2025

$ 823 $ 563 $ 271

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.

The current restructuring liability related to the transformation programs, reported in the Condensed Consolidated Balance Sheets as of January 31, 2025 and October 31, 2024, was $ 46 million and $ 61 million, respectively, in Accrued restructuring, and $ 15 million and $ 17 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, 2025 and October 31, 2024, was $ 103 million and $ 106 million, respectively.

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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 July 31, For the nine months ended July 31,

2024 2023 2024 2023

For the three months ended January 31,

Service cost $ 12 $ 12

Interest cost (1)

101 98 304 288

Expected return on plan assets (1)

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Prior service benefit ( 1 ) ( 2 )

Net periodic benefit cost 12 11 35 37

Net periodic benefit (credit) cost ( 18 ) 12

Settlement loss and special termination benefits (1)

Total net benefit cost $ 13 $ 14 $ 38 $ 41

Total net benefit (credit) cost $ ( 18 ) $ 13

(1) These non-service components were included in Interest and other, net in the Condensed Consolidated Statements of Earnings.

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Provision for Taxes

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.

For the three months ended January 31, 2025 and 2024, the Company recorded income tax expense of $ 106 million and $ 96 million, respectively, which reflects an effective tax rate of 14.5 % and 19.9 %, 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 is also impacted by discrete tax adjustments during each fiscal period.

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.

For the three months ended January 31, 2025, the Company recorded $ 17 million of net income tax benefits related to various items discrete to the period.

The amount primarily included $ 30 million of net excess tax benefits related to stock-based compensation and $ 10 million of net income tax benefits related to acquisition, disposition and other charges, partially offset by $ 22 million of net income tax charges resulting from the gain on the CTG divestiture.

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

Uncertain Tax Positions

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.

As of January 31, 2025 and October 31, 2024, the amount of unrecognized tax benefits was $ 717 million and $ 724 million, respectively, of which up to $ 337 million and $ 344 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 July 31, 2024 and October 31, 2023, the Company had accrued $ 56 million for interest and penalties in the Condensed Consolidated Balance Sheets.

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Notes to Condensed Consolidated Financial Statements (Continued)

As of January 31, 2025 and October 31, 2024, the Company had accrued $ 57 million and $ 58 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.

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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 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.

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.

Subsequent to the close of the first quarter of fiscal 2025, the IRS issued a Revenue Agent Report (“RAR”) with which the Company agreed.

The final determination will not result in a material impact to the Company’s financial statements.

The audit cycle for fiscal 2017 through 2019 will be considered effectively settled during the second quarter of fiscal 2025 resulting in a reduction of existing unrecognized tax benefits of approximately $ 358 million.

A significant majority of these unrecognized tax benefits relates

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Notes to Condensed Consolidated Financial Statements (Continued)

either to adjustments to foreign tax credits that carry a full valuation allowance or to the timing of intercompany royalty revenue recognition, neither of which will affect the Company’s effective tax rate.

The IRS audit for fiscal 2020 through 2022 remains open.

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

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

July 31, 2024 October 31, 2023

January 31, 2025 October 31, 2024

Deferred tax assets $ 2,379 $ 2,396

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Cash, Cash Equivalents and Restricted Cash

July 31, 2024 October 31, 2023

January 31, 2025 October 31, 2024

Cash and cash equivalents $ 13,431 $ 14,846

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

July 31, 2024 October 31, 2023

January 31, 2025 October 31, 2024

Purchased parts and fabricated assemblies $ 6,191 $ 5,441

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Total $ 8,577 $ 7,810

The Company values inventory at the lower of cost or net realizable value.

Cost is computed using standard cost which approximates actual cost on a first-in, first-out basis.

At each reporting period, the Company assesses the value of its inventory and writes down the cost of inventory to its net realizable value if required, for estimated excess or obsolescence.

Factors influencing these adjustments include changes in future demand forecasts, market conditions, technological changes, product life-cycle and development plans, component cost trends, product pricing, physical deterioration, and quality issues.

If in any period the Company anticipates a change in those factors to be less favorable than its previous estimates, additional inventory write-downs may be required and could materially impact gross margin.

The write down for excess or obsolescence is charged to the provision of inventory, which is a component of Cost of Products and Cost of Services in the Condensed Consolidated Statements of Earnings.

At the point of the loss recognition, a new, lower cost basis for that inventory is established, and subsequent changes in facts and circumstances do not result in the restoration or increase in that newly established cost basis.

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Property, Plant and Equipment, net

July 31, 2024 October 31, 2023

January 31, 2025 October 31, 2024

Land $ 66 $ 66

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Property, plant and equipment, net $ 5,412 $ 5,664

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

Supplier Financing Arrangements

The Company enters into supplier financing arrangements with external financial institutions.

Under these arrangements, suppliers can choose to settle outstanding payment obligations at a discount.

The Company holds no economic interest in suppliers' participation, nor does it provide guarantees or pledge assets under these arrangements.

Invoices are settled with the financial institutions based on the original supplier payment terms.

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, are presented within Accounts Payable on the Consolidated Balance Sheets, amounted to $ 475 million, and $ 466 million as of January 31, 2025 and October 31, 2024, respectively.

The Company's aggregate product warranty liabilities and changes for the three months ended January 31, 2025, and the fiscal year ended October 31, 2024 were as follows:

January 31, 2025 October 31, 2024

Balance at beginning of period $ 301 $ 318

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Balance at end of period (1)

(1) The Company included the current portion in Other accrued liabilities, and amounts due after one year in Other non-current liabilities in the accompanying Consolidated Balance Sheets.

Contract Balances

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

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Contract Assets

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

July 31, 2024 October 31, 2023

January 31, 2025 October 31, 2024

Accounts receivable $ 3,154 $ 3,236

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Total $ 3,450 $ 3,550

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

The allowances for credit losses related to accounts receivable and changes for the three months ended January 31, 2025, and the fiscal year ended October 31, 2024 were as follows:

January 31, 2025 October 31, 2024

Balance at beginning of period $ 10 $ 37

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Balance at end of period $ 9 $ 10

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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 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 $ 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.

For the three months ended January 31, 2025, the Company sold $ 0.9 billion and for the fiscal year ended October 31, 2024, the Company sold $ 3.1 billion of trade receivables.

The Company recorded an obligation of $ 53 million and $ 62 million within Notes payable and short-term borrowings in its Condensed Consolidated Balance Sheets as of January 31, 2025 and October 31, 2024, 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

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A summary of contract liabilities were as follows:

July 31, 2024 October 31, 2023

January 31, 2025 October 31, 2024

Location In millions

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Total deferred revenue $ 7,494 $ 7,482

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.

For the three months ended January 31, 2025, approximately $ 1.1 billion of revenue was recognized relating to contract liabilities recorded as of October 31, 2024.

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

As of January 31, 2025, the aggregate amount of deferred revenue, was $ 7.5 billion.

The Company expects to recognize approximately 41 % of this balance over fiscal 2025 with the remainder to be recognized thereafter.

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

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

As of January 31, 2025, the aggregate amount of customer deposits was $ 409 million.

The Company expects to recognize $ 351 million over the next twelve months and the remaining balance thereafter.

Costs to Obtain a Contract

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 January 31, 2025, the current and non-current portions of the capitalized costs to obtain a contract were $ 88 million and $ 136 million, respectively.

As of October 31, 2024, the current and non-current portions of the capitalized costs to obtain a contract were $ 88 million and $ 136 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 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.

For the three months ended January 31, 2025 and 2024, the Company amortized $ 27 million and $ 26 million, 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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Accounting for Leases as a Lessor

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The components of financing receivables were as follows:

July 31, 2024 October 31, 2023

January 31, 2025 October 31, 2024

Minimum lease payments receivable $ 9,899 $ 10,266

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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 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.

For the three months ended January 31, 2025 and the fiscal year ended October 31, 2024, the Company sold $ 124 million and $ 93 million of financing receivables, respectively.

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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 July 31, 2024, presented on amortized cost basis by year of origination was as follows:

As of July 31, 2024

The credit risk profile of gross financing receivables, based on internal risk ratings as of January 31, 2025, presented on amortized cost basis by year of origination was as follows:

As of January 31, 2025

Low Moderate High

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Total $ 5,995 $ 3,081 $ 239

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

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The credit quality indicators do not reflect any mitigation actions taken to transfer credit risk to third parties.

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Notes to Condensed Consolidated Financial Statements (Continued)

Allowance for Credit Losses

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

The allowance for credit losses for financing receivables as of January 31, 2025 and October 31, 2024 and the respective changes for the three and twelve months then ended were as follows:

January 31, 2025 October 31, 2024

Balance at beginning of period $ 194 $ 243

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

July 31, 2024 October 31, 2023

January 31, 2025 October 31, 2024

Current 1-30 days $ 305 $ 334

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(2) Includes billed operating lease receivables and billed and unbilled sales-type and direct-financing lease receivables.

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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 July 31, For the nine months ended July 31,

2024 2023 2024 2023

For the three months ended January 31,

Location In millions

Interest income from sales-type leases and direct financing leases Financing Income $ 168 $ 142 $ 486 $ 395

Interest income from sales-type leases

and direct financing leases Financing Income $ 186 $ 156

Lease income from operating leases Services 547 599

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fixed-term financing receivables and leased equipment in the offering, which is held by a Special Purpose Entity (“SPE”).

The SPE meets the definition of a Variable Interest Entity ("VIE") and is consolidated, along with the associated debt, into the Condensed Consolidated Financial Statements as the Company is the primary beneficiary of the VIE.

The SPE meets the definition of a Variable Interest Entity (“VIE”) and is consolidated, along with the associated debt, into the Condensed Consolidated Financial Statements as the Company is the

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Notes to Condensed Consolidated Financial Statements (Continued)

primary beneficiary of the VIE.

The SPE is a bankruptcy-remote legal entity with separate assets and liabilities.

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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 July 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 January 31, 2025 and October 31, 2024, 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.

July 31, 2024 October 31, 2023

January 31, 2025 October 31, 2024

Assets held by VIE:

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Long-term debt, net of unamortized debt issuance costs $ 757 $ 965

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 three months ended January 31, 2025, the Company did not transfer any financing receivables and leased equipment via securitization through the SPE.

For the fiscal year ended October 31, 2024, financing receivables and leased equipment transferred via securitization through the SPE were $ 1.2 billion and $ 0.6 billion, respectively.

Acquisitions and Dispositions

Pending Merger with Juniper Networks, Inc.

On January 9, 2024, the Company entered into a definitive merger agreement under which HPE will acquire Juniper Networks, Inc.

(“Juniper Networks”) in an all-cash transaction for $ 40.00 per share, representing an equity value of approximately $ 14 billion.

Proposed Acquisition of Juniper Networks, Inc.

On January 9, 2024, the Company entered into a definitive Agreement and Plan of Merger (the “Merger Agreement”) under which HPE will acquire Juniper Networks, Inc.

(“Juniper Networks”) in an all-cash transaction for $ 40.00 per share, representing an equity value of approximately $ 14 billion (the “Merger”).

The transaction was unanimously approved by the boards of directors of both companies.

The transaction is expected to be funded based on financing commitments for $ 14 billion in term loans.

Such financing will ultimately be replaced, in part, with a combination of new debt, mandatory convertible preferred securities, and cash on the

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

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

On January 30 2025, the Antitrust Division of the United States Department of Justice (the “DOJ”) filed a complaint in the United States District Court for the Northern District of California, seeking to enjoin the closing of the Merger, alleging that the Merger is likely to substantially lessen competition in violation of Section 7 of the Clayton Act.

On February 10, 2025, HPE and Juniper Networks filed answers to the DOJ’s complaint, disputing these claims.

Trial is scheduled to begin on July 9, 2025.

We intend to vigorously defend the litigation.

A $ 815 million termination fee will be payable by the Company to Juniper Networks if the transaction is terminated under certain circumstances, including due to the Company’s breach of the Merger Agreement or the failure to obtain certain regulatory approvals.

The transaction is expected to be funded based on senior unsecured delayed draw term loans from a syndicate of banks, the post-tax proceeds from the Company’s sale to Unisplendour International Technology Limited of 30 % of the total issued share capital of H3C Technologies Co., Limited (“H3C”), the net proceeds (including after repayments of maturing debt) of its September 2024 issuances of senior unsecured notes and 7.625 % Series C Mandatory Convertible Preferred Stock (“Preferred Stock”), and cash on the balance sheet.

In September 2024, the Company issued $ 9.0 billion of senior unsecured notes and $ 1.5 billion of Preferred Stock, the net proceeds of which the Company intends to use to fund a portion of the consideration for the acquisition of Juniper Networks and for other general corporate purposes.

If the proposed transaction is terminated, the senior unsecured notes and Preferred Stock will be treated as follows:

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Notes to Condensed Consolidated Financial Statements (Continued)

balance sheet.

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.

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.

• If (i) the proposed acquisition of Juniper Networks does not close on or before the later of (a) the date that is five business days after October 9, 2025 and (b) the date that is five business days after any later date to which Juniper Networks and HPE may agree to extend the “End Date” (as defined in the Merger Agreement) or (ii) HPE notifies the trustee of such notes that HPE will not pursue the consummation of the proposed acquisition of Juniper Networks, HPE shall be required to redeem $ 6.5 billion of these senior unsecured notes.

• If (i) the proposed acquisition of Juniper Networks does not close on or before the later of (a) the date that is five business days after October 9, 2025 and (b) the date that is five business days after any later date to which Juniper Networks and HPE may agree to extend the “End Date” (as defined in the Merger Agreement) or (ii) HPE notifies the holders of the Preferred Stock in writing that HPE will not pursue the consummation of the proposed acquisition of Juniper Networks, HPE may, at its option, redeem the Preferred Stock, in whole but not in part.

Disposition of Communications Technology Group (“CTG”)

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

CTG was included in the Communications and Media Solutions business, which was 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.

On December 1, 2024, the Company completed the disposition of CTG.

The Company received net proceeds of $ 210 million and recognized a gain of $ 244 million included in Gain on sale of a business in the Condensed Consolidated Statements of Earnings.

Goodwill is tested for impairment at the reporting unit level.

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 July 31, 2024 and October 31, 2023.

As of November 1, 2024, the Company reassessed its reporting units and determined that the former Compute and High Performance Computing & Artificial Intelligence reporting units (within the Server segment) met the criteria to qualify as a single Server reporting unit.

As of January 31, 2025, the Company's reporting units are consistent with the reportable segments identified in Note 2, “Segment Information”, with the exception of Corporate Investments and Other, which contains the A & PS reporting unit.

The following table represents the carrying value of goodwill, by reportable segment as of January 31, 2025 and October 31, 2024.

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

Balance as of October 31, 2023

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

Goodwill adjustments — ( 1 ) 1 — — —

Balance as of July 31, 2024

Balance as of October 31, 2024 and January 31, 2025 (1)

$ 10,194 $ 4,839 $ 2,909 $ 144 $ — $ 18,086

(1) Goodwill is net of accumulated impairment losses of $ 1.8 billion, which decreased by $ 0.1 billion from October 31, 2024, due to the disposition of CTG (the Communications and Media Solutions reporting unit).

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

As a result of the realignment, the Company performed an interim quantitative goodwill impairment test for all of its reporting units as of November 1, 2023, which did not result in any goodwill impairment charges.

There has been no change to the accumulated impairment loss from the Company's Annual Report on Form 10-K for the fiscal year ended October 31, 2023.

The fair value of all reporting units continued to exceed the carrying amount of their net assets.

The excess of fair value over carrying amount for our reporting units ranged from approximately 4 % to 184 % of the respective carrying amounts.

In order to evaluate the sensitivity of the estimated fair value of our reporting units in the goodwill impairment test, the Company applied a 10 % decrease to the fair value of each reporting unit.

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 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.

Over the last several years, digital transformation drove increased investment to modernize infrastructure.

However, in the current macroeconomic and inflationary environment, customers have slowed their investments resulting in lower server demand and competitive pricing.

These dynamics are further compounded by higher supply chain costs.

During this cycle, the Compute business continues to focus on capturing market share while maintaining operating margin.

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.

Additionally, an interim impairment test was performed as of November 1, 2024 based on organizational changes impacting the Hybrid Cloud and Server reporting units.

The interim impairment test did not result in an impairment of goodwill.

The excess of fair value over carrying amount for the Hybrid Cloud reporting unit was 6 %.

In order to evaluate the sensitivity of the estimated fair value of the reporting units in the goodwill impairment test, the Company applied a 10 % decrease to the fair value of each reporting unit.

Based on the results of this hypothetical 10 % decrease, Hybrid Cloud did not have an excess of fair value over carrying value.

The Hybrid Cloud reporting unit has goodwill of $ 4.8 billion as of January 31, 2025.

Although the Hybrid Cloud business is on a positive trajectory, the Company is managing both a sales model transition and product transition within this business.

The Company’s product model transition is to a more cloud-native, software-defined platform with HPE Alletra.

Translating this growth to revenue and operating income will take time because a greater mix of high margin business, such as ratable software and services, are deferred and recognized in future periods.

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 Hybrid Cloud reporting unit's ability to successfully address the current challenges may change, which could result in the carrying value of the Hybrid Cloud reporting unit exceeding its estimated fair value and potential impairment charges.

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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.

We currently believe these challenges will be successfully addressed as the supply chain constraints continue to improve.

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 HPC & AI reporting unit's ability to successfully address the current challenges may change, which could result in the carrying value of the HPC & AI reporting unit exceeding its estimated fair value and potential impairment charges.

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

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

As of January 31, 2025 As of October 31, 2024

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 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.

As of January 31, 2025, the estimated fair value of the Company's short-term and long-term debt approximated its carrying value of $ 17.9 billion.

As of October 31, 2024, the estimated fair value and carrying value of the Company's short-term and long-term debt was $ 18.3 billion and $ 18.2 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.

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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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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 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.

For the three months ended January 31, 2025 and 2024, the Company recognized a realized net loss of $ 2 million resulting from an impairment and an unrealized net loss of $ 7 million, respectively, on these investments.

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 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.

For investments still held as of January 31, 2025, the cumulative upward adjustments for observable price changes was $ 82 million and cumulative downward adjustments for observable price changes and impairments was $ 89 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 July 31, 2024 As of October 31, 2023

Cost Gross Unrealized Gains (Losses) Fair

Value Cost Gross Unrealized Gains (Losses) Fair

As of January 31, 2025 As of October 31, 2024

Cost Gross Unrealized Gains Fair

Value Cost Gross Unrealized Gains Fair

Cash Equivalents:

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Total cash equivalents and available-for-sale debt investments $ 11,990 $ 7 $ 11,997 $ 13,349 $ 8 $ 13,357

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.

As of January 31, 2025 and October 31, 2024, 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 July 31, 2024 and October 31, 2023.

as of January 31, 2025 and October 31, 2024.

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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Notes to Condensed Consolidated Financial Statements (Continued)

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

As of July 31, 2024

As of January 31, 2025

Amortized Cost Fair Value

Due in more than five years $ 105 $ 112

Total $ 111 $ 117

Equity Investments

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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 $ 92 million and $ 88 million as of January 31, 2025 and October 31, 2024, respectively.

For the three months ended January 31, 2025 and 2024, the Company recognized an unrealized gain of $ 4 million and an unrealized loss of $ 54 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 $ 198 million and $ 200 million as of January 31, 2025 and October 31, 2024, respectively.

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 July 31, 2024 As of October 31, 2023

As of January 31, 2025 As of October 31, 2024

Fair Value Fair Value

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

As of July 31, 2024

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Notes to Condensed Consolidated Financial Statements (Continued)

As of January 31, 2025

In the Condensed Consolidated Balance Sheets

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Derivative liabilities $ 127 $ — $ 127 $ 116 $ 1 (2)

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Notes to Condensed Consolidated Financial Statements (Continued)

As of October 31, 2024

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(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 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.

As of January 31, 2025, $ 1 million of collateral posted was entirely through the re-use of counterparty collateral.

As of October 31, 2024, $ 27 million of collateral posted was entirely through the re-use of counterparty collateral.

The amounts recorded on the Condensed Consolidated Balance Sheets related to cumulative basis adjustments for fair value hedges were as follows:

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

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

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

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

January 31, 2025 October 31, 2024 January 31, 2025 October 31, 2024

Notes payable and short-term borrowings $ ( 2,456 ) $ ( 2,440 ) $ 43 $ 58

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HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

The pre-tax effect of derivative instruments in cash flow and net investment hedging relationships recognized in Other Comprehensive Income (“OCI”) were as follows:

Gains (Losses) Recognized in OCI on Derivatives

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

2024 2023 2024 2023

For the three months ended January 31,

Derivatives in Cash Flow Hedging Relationship:

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Total $ 313 $ ( 243 )

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 January 31, 2025, the Company expects to reclassify an estimated net accumulated other comprehensive gain of approximately $ 71 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

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Gains (Losses) Recognized in Income

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

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

For the three months ended January 31,

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

Total net revenue and interest and other, net $ 7,854 $ 39 $ 6,755 $ ( 88 )

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Amount of gains (losses) reclassified from accumulated other comprehensive income into income 44 170 24 ( 138 )

Interest Rate Locks

Amount of losses reclassified from accumulated other comprehensive income into income — ( 1 ) — —

Gains (Losses) on Derivatives not Designated as Hedging Instruments:

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Total gains (losses) $ 44 $ 227 $ 24 $ ( 178 )

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HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

Notes Payable, Short-Term Borrowings and Long-Term Debt

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

July 31, 2024 October 31, 2023

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

January 31, 2025 October 31, 2024

Current portion of long-term debt (1)

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Total $ 17,877 $ 18,246

(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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Notes to Condensed Consolidated Financial Statements (Continued)

Unsecured Senior Notes

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.

(1) As of January 31, 2025, the Current portion of long-term debt, net of discount and issuance costs, included $ 1.2 billion associated with the asset-backed debt securities issued by the Company.

Commercial Paper

Hewlett Packard Enterprise maintains two commercial paper programs, collectively "the Parent Programs", and a wholly-owned subsidiary maintains a third program.

The commercial paper program in the U.S.

Hewlett Packard Enterprise maintains two commercial paper programs, “the Parent Programs”, and a wholly-owned subsidiary maintains a third program.

The Parent Program in the U.S.

provides for the issuance of U.S.

dollar-denominated commercial paper up to a maximum aggregate principal amount of $ 4.75 billion.

The commercial paper program outside the U.S.

The Parent Program outside the U.S.

provides for the issuance of commercial paper denominated in U.S.

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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 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.

As of January 31, 2025 and October 31, 2024, no borrowings were outstanding under the Parent Programs.

As of January 31, 2025 and October 31, 2024, $ 665 million and $ 649 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 July 31, 2024 and October 31, 2023, no borrowings were outstanding under this credit facility.

In September 2024, the Company terminated its prior senior unsecured revolving credit facility that was entered into in December 2021, and entered into a new senior unsecured revolving credit facility with an aggregate lending commitment of $ 5.25 billion for a period of five years .

The commitment comprised of (i) $ 4.75 billion of commitments available immediately and (ii) $ 500 million of commitments available from and subject to the closing of the proposed acquisition of Juniper Networks and refinancing of Juniper Networks’ credit agreement in connection with the closing of such proposed acquisition.

As of January 31, 2025 and October 31, 2024, 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 July 31, 2024 and October 31, 2023, no borrowings were outstanding under this credit facility.

Juniper Acquisition Committed Financing

In connection with HPE’s signing a definitive agreement to acquire Juniper Networks in January 2024, HPE obtained a commitment from Citigroup Global Markets Inc., JPMorgan Chase Bank, N.A.

and Mizuho Bank, Ltd.

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

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 5 years.

As of January 31, 2025 and October 31, 2024, no borrowings were outstanding under this credit facility.

Juniper Acquisition Financing

In September 2024, the Company entered into term loan agreements with JPMorgan Chase Bank, N.A, Citibank, N.A., and Mizuho Bank, Ltd.

for approximately $ 12.0 billion of senior unsecured delayed draw term loan facilities, comprised of an approximately $ 9.0 billion 364-day tranche and a $ 3.0 billion three-year tranche, subject to customary conditions.

The Company has since further reduced the commitments under the 364-day term loan to $ 1.0 billion.

Unless previously terminated, commitments under both the 364-day term loan and the three-year term loan will terminate upon the earliest of (i) five business

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Notes to Condensed Consolidated Financial Statements (Continued)

days after the Juniper Outside Date (as defined in such term loan agreements), (ii) the occurrence of the closing of the acquisition of Juniper Networks without the funding of any borrowings under either of the term loan agreements, and (iii) the termination of the Merger Agreement by HPE in writing in accordance with its terms.

As of January 31, 2025, no borrowings were outstanding under these agreements.

Stockholders' Equity

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

The components of accumulated other comprehensive loss, net of taxes as of January 31, 2025, and changes for the three months ended January 31, 2025 were as follows:

Net unrealized gains (losses)

available-for-sale

securities Net unrealized

gains (losses)

securities Net unrealized (losses) gains

flow hedges Unrealized

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Balance at beginning of period $ 8 $ ( 16 ) $ ( 2,342 ) $ ( 627 ) $ ( 2,977 )

Other comprehensive income (loss) before reclassifications 6 ( 69 ) ( 2 ) ( 17 ) ( 82 )

Reclassifications of losses into earnings — 2 103 — 105

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

Other comprehensive (loss) income before reclassifications ( 1 ) 270 — ( 22 ) 247

Reclassifications of (gains) losses into earnings — ( 213 ) 30 — ( 183 )

Tax (provision) benefit — ( 10 ) ( 5 ) 1 ( 14 )

Balance at end of period $ 7 $ 31 $ ( 2,317 ) $ ( 648 ) $ ( 2,927 )

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:

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:

Net unrealized

(losses) gains on

available-for-sale

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Share Repurchase Program

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.

For the three months ended January 31, 2025, the Company repurchased and settled 2.4 million shares under its share repurchase program through open market repurchases, which included 0.1 million shares that were unsettled open market repurchases as of October 31, 2024.

As of January 31, 2025, the Company did not have any unsettled open market repurchases.

Shares repurchased for the three months ended January 31, 2025 were recorded as a $ 50 million reduction to stockholders' equity.

As of January 31, 2025, the Company had a remaining authorization of approximately $ 0.8 billion for future share repurchases.

Net Earnings Per Share

The Company calculates basic net earnings per share (“EPS”) using net earnings and the weighted-average number of shares outstanding during the reporting period.

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

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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 July 31, For the nine months ended July 31,

2024 2023 2024 2023

For the three months ended January 31,

In millions, except per share amounts

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

Net earnings attributable to common stockholders - Basic $ 598 $ 387

7.625 % Series C mandatory convertible preferred stock dividends

Net earnings - Diluted $ 627 $ 387

Weighted-average shares used to compute basic net EPS 1,316 1,301

Dilutive effect of employee stock plans (1)

Dilutive effect of 7.625 % Series C mandatory convertible preferred stock (1)

Weighted-average shares used to compute diluted net EPS 1,409 1,316

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Anti-dilutive weighted-average stock awards (2)

(1) The impact of dilutive effect of employee stock plans is calculated under the treasury stock method, and the impact of dilutive effect of the Preferred Stock is calculated under the if-converted method.

(2) 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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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 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

Ross and Rogus v.

Hewlett Packard Enterprise Company.

On November 8, 2018, a putative class action complaint was filed in the Superior Court of California, County of Santa Clara alleging that HPE pays its California-based female employees “systemically lower compensation” than HPE pays male employees performing substantially similar work.

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

HPE believes it has recorded adequate provisions for any such matters and, as of January 31, 2025, 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.

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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.

The settlement class excludes certain individuals, including those who previously executed an arbitration agreement with HPE or an agreement that resulted in a release or waiver of claims.

On April 28, 2023, the Court granted Plaintiffs’ Motion for Final Approval of the Class Action Settlement and Certification of the Settlement Class.

On February 6, 2024, the Court entered final judgment, approving the settlement and dismissing the action.

Litigation, Proceedings, and Investigations

Department of Justice Action on the Proposed Acquisition of Juniper Networks .

As previously disclosed, on January 9, 2024, HPE entered into the Merger Agreement with Juniper Networks and Jasmine Acquisition Sub, Inc., providing for the acquisition of Juniper by HPE.

Completion of the Merger is subject to the satisfaction or waiver of certain closing conditions, including the expiration or early termination of the applicable waiting period under the Hart-Scott-Rodino Act and certain other approvals, clearances or expirations of waiting periods under other antitrust laws and foreign investment laws and the absence of any order, injunction, or other order or law prohibiting the Merger or making the closing of the Merger illegal.

On January 30, 2025, the Antitrust Division of the United States Department of Justice (the “DOJ”) filed a complaint in the United States District Court for the Northern District of California, seeking to enjoin the closing of the Merger, alleging that the Merger is likely to substantially lessen competition in violation of Section 7 of the Clayton Act.

On February 10, 2025, HPE and Juniper Networks filed answers to the DOJ’s complaint, disputing these claims.

Trial is scheduled to begin on July 9, 2025.

The consummation of the Merger has been delayed by the DOJ action, and could ultimately be prevented if HPE and Juniper Networks are unsuccessful in defending against or settling the DOJ action.

India Directorate of Revenue Intelligence Proceedings .

On April 30 and May 10, 2010, the India Directorate of Revenue Intelligence (the “DRI”) issued notices to Hewlett-Packard India Sales Private Ltd (“HP India”), a subsidiary of HP Inc., seven HP India employees and one former HP India employee alleging that HP India underpaid customs duties while importing products and spare parts into India and seeking to recover an aggregate of approximately $ 370 million, plus penalties.

On April 11, 2012, the Bangalore Commissioner of Customs issued an order on the products-related notices affirming duties and penalties against HP India and the named individuals for approximately $ 386 million.

On April 20, 2012, the Commissioner issued an order on the spare parts-related notice affirming duties and penalties against HP India and certain of the named individuals for approximately $ 17 million.

3 unchanged sentences

The Customs Tribunal rejected HP India's request to return the matter to the Commissioner on procedural grounds.

The hearings before the Customs Tribunal were subsequently delayed, have been postponed on several occasions since 2014, and have not yet been rescheduled.

After multiple delays and postponements over the last decade, the Customs Tribunal has scheduled the cross-appeals for final hearing on April 21-25, 2025.

The Company expects a ruling from the Customs Tribunal in fiscal 2025.

Either party may appeal the ruling to the India Supreme Court.

ECT Proceedings .

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HP Brazil expects a resolution of the decision on the merits to take several years.

Forsyth, et al.

and Hewlett Packard Enterprise.

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 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.

Plaintiffs also seek to certify a class under California law consisting of all persons 40 years or older employed by Defendants in the state of California and terminated pursuant to a WFR plan on or after August 18, 2012.

On April 14, 2021, Plaintiffs’ Motion for Conditional Class Certification was granted.

The conditionally certified collective action consists of all individuals who had their employment terminated by Defendants pursuant to a WFR Plan on or after November 1, 2015, and who were 40 years or older at the time of such termination.

The collective action excludes all individuals who signed a Waiver and General Release Agreement or an Agreement to Arbitrate Claims.

The parties have reached an agreement to resolve this matter.

Plaintiffs filed a Motion for Preliminary Approval of the Class Action and Collective Action Settlement on September 21, 2023.

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

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.

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Notes to Condensed Consolidated Financial Statements (Continued)

Q3 Networking Litigation.

On September 21 and September 22, 2020, Q3 Networking LLC filed complaints against HPE, Aruba Networks, Commscope and Netgear in the United States District Court for the District of Delaware and the United States International Trade Commission (“ITC”).

Both complaints allege infringement of four patents, and the ITC complaint defines the “accused products” as “routers, access points, controllers, network management servers, other networking products, and hardware and software components thereof.” The ITC action was instituted on October 23, 2020.

The District of Delaware action has been stayed pending resolution of the ITC action.

On December 7, 2021, the Administrative Law Judge issued his initial determination finding no violation of section 337 of the Tariff Act.

On May 3, 2022, the ITC issued its Notice of Final Determination, affirming the initial determination and terminating the investigation.

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.

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

R2 Semiconductor Patent Litigation.

In November 2022, R2 Semiconductor, Inc.

(“R2”) filed a lawsuit in the Dusseldorf Regional Court in Germany against Intel Deutschland GmbH, Hewlett-Packard GmbH, and other Intel customers.

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.

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, 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.

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

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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;

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HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

supply chain due diligence;

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

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HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES

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.

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The Company believes the likelihood of having to acquire a material amount of assets under these arrangements is remote.

The maximum potential future payments under performance guarantees and financing arrangements was $ 279 million as of January 31, 2025.

Indemnifications

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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.

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 Events

On March 6, 2025, the Board of Directors approved a cost reduction program (the "Program") intended to reduce structural operating costs and continue advancing the Company's ongoing commitment to profitable growth.

The Program is expected to be implemented through fiscal year 2026 and deliver gross savings of approximately $ 350 million by fiscal year 2027 through reductions in the Company's workforce.

In order to achieve this level of cost savings, HPE estimates cash charges of approximately $ 350 million over the next two years in connection with the Program, with approximately $ 250 million to be incurred in fiscal year 2025, and the remaining $ 100 million to be incurred in the fiscal year 2026.

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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.

The estimates of the duration of the Program, the charges and expenditures that HPE expects to incur in connection therewith, and the timing thereof are subject to a number of assumptions, including local law requirements in various jurisdictions, and actual amounts may differ materially from estimates.

In addition, the Company may incur other charges or cash expenditures not currently contemplated due to unanticipated events that may occur, including in connection with the implementation of the Program.

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