What changed in this filing

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Item 1. Financial Statements

2022-06-03 compared with 2022-03-07 · 251 added, 178 removed, 843 unchanged (34% of the section changed)

Financial Statements and Supplementary Data.

Consolidated Condensed Statements of Earnings for the three months ended J an u ary 31, 202 2 and 202 1 (Unaudited)

Consolidated Condensed Statements of Comprehensive Income for the three months ended J anuary 31, 202 2 and 202 1 (Unaudited)

Consolidated Condensed Balance Sheets as of J anua ry 31, 202 2 and October 31, 202 1 (Unaudited)

Consolidated Condensed Statements of Cash Flows for the three months ended J an uary 31, 202 2 and 202 1 (Unaudited)

Consolidated Condensed Statements of Earnings for the three and six months ended April 3 0 , 2022 and 2021 (Unaudited)

Consolidated Condensed Statements of Comprehensive Income for the three and six months ended April 3 0 , 2022 and 2021 (Unaudited)

Consolidated Condensed Balance Sheets as of April 3 0 , 2022 and October 31, 2021 (Unaudited)

Consolidated Condensed Statements of Cash Flows for the six months ended April 3 0 , 2022 and 2021 (Unaudited)

Consolidated Condensed Statements of Stockholders’ Deficit (Unaudited)

13 unchanged sentences

Consolidated Condensed Statements of Earnings

Three months ended January 31

Three months ended April 30 Six months ended April 30

2022 2021 2022 2021

In millions, except per share amounts

22 unchanged sentences

Consolidated Condensed Statements of Comprehensive Income

Three months ended January 31

Three months ended April 30 Six months ended April 30

2022 2021 2022 2021

Net earnings $ 1,000 $ 1,228 $ 2,086 $ 2,296

5 unchanged sentences

(Gains) losses reclassified into earnings ( 120 ) 149 ( 164 ) 198

483 128 738 ( 189 )

Change in unrealized components of defined benefit plans:

Gains (losses) arising during the period 21 ( 1 )

Gains arising during the period 1 42 22 41

Amortization of actuarial loss and prior service benefit 5 21 11 42

2 unchanged sentences

Other comprehensive income (loss) before taxes 453 194 723 ( 68 )

(Provision for) benefit from taxes ( 26 ) 32

Provision for taxes ( 90 ) ( 41 ) ( 116 ) ( 9 )

Other comprehensive income (loss), net of taxes 363 153 607 ( 77 )

3 unchanged sentences

Consolidated Condensed Balance Sheets

January 31, 2022 October 31, 2021

April 30, 2022 October 31, 2021

In millions, except par value

21 unchanged sentences

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

1,060 and 1,092 shares issued and outstanding at January 31, 2022 and October 31, 2021, respectively)

1,033 and 1,092 shares issued and outstanding at April 30, 2022 and October 31, 2021, respectively)

Additional paid-in capital 1,081 1,060

Accumulated deficit ( 3,336 ) ( 2,461 )

Accumulated other comprehensive loss ( 16 ) ( 260 )

Accumulated other comprehensive income (loss) 347 ( 260 )

Total stockholders’ deficit ( 1,898 ) ( 1,650 )

3 unchanged sentences

Consolidated Condensed Statements of Cash Flows

Three months ended January 31

Six months ended April 30

Cash flows from operating activities:

17 unchanged sentences

Investment in property, plant and equipment, net ( 452 ) ( 252 )

Proceeds from sale of property, plant and equipment 1 —

Purchases of available-for-sale securities and other investments ( 8 ) ( 13 )

5 unchanged sentences

Payment of short-term borrowings with original maturities less than 90 days, net ( 400 ) —

Proceeds from short-term borrowings with original maturities greater than 90 days 9 6

Proceeds from debt, net of issuance costs 2,060 60

3 unchanged sentences

Cash dividends paid ( 533 ) ( 489 )

Settlement of cash flow hedges 59 —

Net cash used in financing activities ( 1,525 ) ( 3,593 )

Decrease in cash and cash equivalents ( 905 ) ( 704 )

Increase (decrease) in cash and cash equivalents 178 ( 1,440 )

Cash and cash equivalents at beginning of period 4,299 4,864

5 unchanged sentences

Paid-in Capital Accumulated

Comprehensive Loss Total Stockholders’ Deficit

Comprehensive Income (Loss) Total Stockholders’ Deficit

Number of Shares Par Value Accumulated Deficit

In millions, except number of shares in thousands

Balance January 31, 2021 1,252,532 $ 13 $ 984 $ ( 2,759 ) $ ( 1,473 ) $ ( 3,235 )

Net earnings 1,228 1,228

Other comprehensive income, net of taxes 153 153

Comprehensive income 1,381

Issuance of common stock in connection with employee stock plans and other 717 —

Repurchases of common stock (Note 10) ( 51,994 ) ( 1 ) ( 42 ) ( 1,546 ) ( 1,589 )

Cash dividends 7 7

Stock-based compensation expense 76 76

Balance April 30, 2021 1,201,255 $ 12 $ 1,018 $ ( 3,070 ) $ ( 1,320 ) $ ( 3,360 )

Balance January 31, 2022 1,059,900 $ 11 $ 1,046 $ ( 3,369 ) $ ( 16 ) $ ( 2,328 )

Net earnings 1,000 1,000

Other comprehensive income, net of taxes 363 363

Comprehensive income 1,363

Issuance of common stock in connection with employee stock plans and other 608 ( 7 ) ( 7 )

Repurchases of common stock (Note 10) ( 27,116 ) ( 1 ) ( 28 ) ( 970 ) ( 999 )

Cash dividends 3 3

Stock-based compensation expense 70 70

Balance April 30, 2022 1,033,392 $ 10 $ 1,081 $ ( 3,336 ) $ 347 $ ( 1,898 )

Common Stock Additional

Paid-in Capital Accumulated

Comprehensive Income (Loss) Total Stockholders’ Deficit

Number of Shares Par Value Accumulated Deficit

In millions, except number of shares in thousands

Balance October 31, 2020 1,303,927 $ 13 $ 963 $ ( 1,961 ) $ ( 1,243 ) $ ( 2,228 )

7 unchanged sentences

Stock-based compensation expense 191 191

Balance January 31, 2021 1,252,532 $ 13 $ 984 $ ( 2,759 ) $ ( 1,473 ) $ ( 3,235 )

Balance April 30, 2021 1,201,255 $ 12 $ 1,018 $ ( 3,070 ) $ ( 1,320 ) $ ( 3,360 )

Balance October 31, 2021 1,092,205 $ 11 $ 1,060 $ ( 2,461 ) $ ( 260 ) $ ( 1,650 )

7 unchanged sentences

Stock-based compensation expense 203 203

Balance January 31, 2022 1,059,900 $ 11 $ 1,046 $ ( 3,369 ) $ ( 16 ) $ ( 2,328 )

Balance April 30, 2022 1,033,392 $ 10 $ 1,081 $ ( 3,336 ) $ 347 $ ( 1,898 )

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

14 unchanged sentences

Actual results may differ materially from those estimates.

As of January 31, 2022, the extent to which the COVID-19 pandemic will impact our business going forward depends on numerous dynamic factors which we cannot reliably predict.

As of April 30, 2022, the extent to which the COVID-19 pandemic will impact our business going forward depends on numerous dynamic factors which we cannot reliably predict.

As a result, many of our estimates and assumptions required increased judgment and may carry a higher degree of variability and volatility.

4 unchanged sentences

Under the new guidance, it is generally expected that an acquirer will recognize and measure contract assets and liabilities in a manner consistent with how they were recognized by the acquiree in its preacquisition financial statements.

HP is required to adopt the guidance in the first quarter of fiscal year 2024, with early adoption permitted HP has early adopted the guidance in fiscal year 2022, and the implementation of this guidance did not have a material impact on the Consolidated Condensed Financial Statements.

HP is required to adopt the guidance in the first quarter of fiscal year 2024, with early adoption permitted.

HP has early adopted the guidance in fiscal year 2022, and the implementation of this guidance did not have a material impact on the Consolidated Condensed Financial Statements.

AND SUBSIDIARIES

47 unchanged sentences

Segment Operating Results from Operations and the reconciliation to HP consolidated results were as follows:

Three months ended January 31

Three months ended April 30 Six months ended April 30

2022 2021 2022 2021

Notebooks $ 7,734 $ 7,489 $ 16,155 $ 14,855

27 unchanged sentences

Summary of Restructuring Plans

HP’s restructuring activities for the three months ended January 31, 2022 and 2021 summarized by plan were as follows:

HP’s restructuring activities for the six months ended April 30, 2022 and 2021 summarized by plan were as follows:

Fiscal 2020 Plan

4 unchanged sentences

Non-cash and other adjustments 2 ( 34 ) — ( 32 )

Accrued balance as of January 31, 2022 $ 37 $ — $ — $ 37

Total costs incurred to date as of January 31, 2022 $ 662 $ 59 $ 507 $ 1,228

Accrued balance as of April 30, 2022 $ 47 $ — $ — $ 47

Total costs incurred to date as of April 30, 2022 $ 694 $ 105 $ 507 $ 1,306

Reflected in Consolidated Condensed Balance Sheets

4 unchanged sentences

Non-cash and other adjustments 1 ( 12 ) — ( 11 )

Accrued balance as of January 31, 2021 $ 108 $ — $ 4 $ 112

Accrued balance as of April 30, 2021 $ 100 $ — $ 2 $ 102

HP’s restructuring charges for the three months ended April 30, 2022 summarized by the plans outlined below were as follows:

Fiscal 2020 Plan

Severance and EER Non-labor Total

For the three months ended April 30, 2022 $ 32 $ 46 $ 78

Fiscal 2020 Plan

On September 30, 2019, HP’s Board of Directors approved the Fiscal 2020 Plan intended to optimize and simplify its operating model and cost structure that HP expects will be implemented through fiscal 2022.

5 unchanged sentences

These costs primarily relate to third-party professional services and other non-recurring costs.

For the three months ended January 31, 2022 and 2021, HP incurred $ 1 million and $ 4 million of other charges, respectively.

For the three and six months ended April 30, 2022, HP incurred $ 4 million and $ 5 million of other charges, respectively.

For the three and six months ended April 30, 2021, HP incurred $ 5 million and $ 9 million of other charges, respectively.

AND SUBSIDIARIES

2 unchanged sentences

The components of HP’s pension and post-retirement benefit (credit) cost recognized in the Consolidated Condensed Statements of Earnings were as follows:

Three months ended January 31

Three months ended April 30

Defined Benefit Plans Non-U.S.

7 unchanged sentences

Prior service cost (credit) — — 1 ( 1 ) ( 3 ) ( 3 )

Total periodic benefit (credit) cost $ ( 33 ) $ ( 36 ) $ 17 $ 22 $ ( 7 ) $ ( 10 )

Six months ended April 30

Defined Benefit Plans Non-U.S.

Defined Benefit Plans Post- Retirement Benefit Plans

2022 2021 2022 2021 2022 2021

Service cost $ — $ — $ 28 $ 34 $ — $ 1

Interest cost 80 152 11 9 4 4

Expected return on plan assets ( 149 ) ( 254 ) ( 25 ) ( 24 ) ( 4 ) ( 12 )

Amortization and deferrals:

Actuarial loss (gain) 3 30 19 27 ( 8 ) ( 8 )

Prior service cost (credit) — — 3 ( 1 ) ( 6 ) ( 6 )

Net periodic benefit (credit) cost ( 66 ) ( 72 ) 36 45 ( 14 ) ( 21 )

Settlement loss — 1 — — — —

Total benefit (credit) cost $ ( 33 ) $ ( 35 ) $ 19 $ 23 $ ( 7 ) $ ( 11 )

Total periodic benefit (credit) cost $ ( 66 ) $ ( 71 ) $ 36 $ 45 $ ( 14 ) $ ( 21 )

Employer Contributions and Funding Policy

3 unchanged sentences

non-qualified plan participants and approximately $ 4 million to cover benefit claims under HP’s post-retirement benefit plans.

During the three months ended January 31, 2022, HP contributed $ 13 million to its non-U.S.

pension plans and paid $ 8 million to cover benefit payments to U.S.

non-qualified plan participants.

During the six months ended April 30, 2022, HP contributed $ 19 million to its non-U.S.

pension plans, paid $ 15 million to cover benefit payments to U.S.

non-qualified plan participants and paid $ 2 million to cover benefit claims under HP’s post-retirement benefit plans.

HP’s pension and other post-retirement benefit costs and obligations depend on various assumptions.

2 unchanged sentences

Actuarial gains or losses are determined at the measurement date and amortized over the remaining service life for active plans or the life expectancy of plan participants for frozen plans.

In fiscal 2021, HP entered into an agreement with The Prudential Insurance Company of America (“Prudential”) to purchase an irrevocable group annuity contract and transferred approximately $ 5.2 billion of the Pension Plan obligations resulted in a decrease in interest cost and expected returns on plan assets in the first quarter of fiscal 2022.

AND SUBSIDIARIES

Notes to Consolidated Condensed Financial Statements (Continued)

Retirement and Post-Retirement Benefit Plans (Continued)

In fiscal 2021, HP entered into an agreement with The Prudential Insurance Company of America (“Prudential”) to purchase an irrevocable group annuity contract and transferred approximately $ 5.2 billion of the Pension Plan obligations resulting in a decrease in interest cost and expected returns on plan assets for the three and six months ended April 30, 2022.

AND SUBSIDIARIES

Notes to Consolidated Condensed Financial Statements

1 unchanged sentence

Provision for Taxes

HP’s effective tax rate was 18.1 % and 17.5 % for the three months ended January 31, 2022 and 2021, respectively.

HP’s effective tax rate was 19.3 % and 8.1 % for the three months ended April 30, 2022 and 2021, respectively, and 18.7 % and 12.7 % for the six months ended April 30, 2022 and 2021, respectively.

The difference between the U.S.

federal statutory tax rate of 21% and HP’s effective tax rate for the three months ended January 31, 2022 and 2021, was primarily due to tax effects of favorable tax rates associated with certain earnings from HP’s operations in lower-tax jurisdictions throughout the world.

During the three months ended January 31, 2022, HP recorded $ 26 million of net income tax charges related to discrete items in the provision for taxes.

These amounts included income tax charges of $ 39 million related to withholding taxes on undistributed foreign earnings and were partially offset by income tax benefits of $ 12 million related to restructuring charges for the three months ended January 31, 2022.

In addition to the discrete items mentioned above, HP recorded excess tax benefits of $ 37 million associated with stock options, restricted stock units and performance-adjusted restricted stock units for the three months ended January 31, 2022.

During the three months ended January 31, 2021, discrete items in the provision for taxes and excess tax benefits associated with stock options, restricted stock units and performance-adjusted restricted stock units were immaterial.

federal statutory tax rate of 21% and HP’s effective tax rate for the three and six months ended April 30, 2022 was primarily due to tax effects of favorable tax rates associated with certain earnings from HP’s operations in lower-tax jurisdictions throughout the world.

The difference between the U.S.

federal statutory tax rate of 21% and HP’s effective tax rate for the three and six months ended April 30, 2021 was primarily due to tax effects of internal reorganization and by favorable tax rates associated with certain earnings from HP’s operations in lower-tax jurisdictions throughout the world.

During the three and six months ended April 30, 2022, HP recorded $ 8 million and $ 35 million, respectively, of net income tax charges related to discrete items in the provision for taxes.

These amounts included income tax charges of $ 18 million related to the filing of tax returns in various jurisdictions for the six months ended April 30, 2022 and $ 17 million and $ 56 million related to withholding taxes on undistributed foreign earnings for the three and six months ended April 30, 2022, respectively.

These charges were partially offset by income tax benefits of $ 20 million and $ 31 million related to restructuring charges and $ 7 million and $ 8 million related to other tax benefits for the three and six months ended April 30, 2022, respectively.

In addition to the discrete items mentioned above, HP recorded excess tax benefits of $ 36 million associated with stock options, restricted stock units and performance-adjusted restricted stock units for the six months ended April 30, 2022.

During the three and six months ended April 30, 2021, HP recorded $ 128 million and $ 129 million, respectively, of net income tax benefits related to discrete items in the provision for taxes.

These amounts included tax benefits of $ 89 million related to tax effects of internal reorganization, $ 8 million and $ 36 million related to restructuring charges, $ 23 million and $ 11 million related to audit settlements in various jurisdictions, and $ 12 million and $ 5 million related to other tax benefits for the three and six months ended April 30, 2021, respectively.

These benefits were partially offset by $ 4 million and $ 12 million of uncertain tax position charges for the three and six months ended April 30, 2021, respectively.

For the six months ended April 30, 2021, excess tax benefits associated with stock options, restricted stock units and performance-adjusted restricted stock units were immaterial.

Uncertain Tax Positions

As of January 31, 2022, the amount of gross unrecognized tax benefits was $ 827 million, of which up to $ 647 million would affect HP’s effective tax rate if realized.

The amount of unrecognized tax benefit changed by a net immaterial amount.

As of April 30, 2022, the amount of gross unrecognized tax benefits was $ 843 million, of which up to $ 642 million would affect HP’s effective tax rate if realized.

Total gross unrecognized tax benefits increased by $ 23 million for the six months ended April 30, 2022.

HP recognizes interest income from favorable settlements and interest expense and penalties accrued on unrecognized tax benefits in the provision for taxes in the Consolidated Condensed Statements of Earnings.

As of January 31, 2022 and 2021, HP had accrued $ 75 million and $ 64 million, respectively, for interest and penalties.

As of April 30, 2022 and 2021, HP had accrued $ 81 million and $ 66 million, respectively, for interest and penalties.

HP engages in continuous discussions and negotiations with taxing authorities regarding tax matters in various jurisdictions.

9 unchanged sentences

The allowance for credit losses related to accounts receivable and changes were as follows:

Three months ended January 31, 2022

Six months ended April 30, 2022

Balance at beginning of period $ 111

Benefit of allowance for credit losses ( 7 )

Current-period allowance for credit losses 10

Deductions, net of recoveries ( 3 )

4 unchanged sentences

For arrangements involving an element of recourse, the recourse obligation is measured using market data from similar transactions and reported as a current liability in the Consolidated Condensed Balance Sheets.

The recourse obligations as of January 31, 2022 and October 31, 2021 and the costs associated with the sale of trade receivables for the three months ended January 31, 2022 and 2021 were not material.

The recourse obligations as of April 30, 2022 and October 31, 2021, and the costs associated with the sale of trade receivables for the three and six months ended April 30, 2022 and 2021 were not material.

The following is a summary of the activity under these arrangements:

Three months ended January 31

Three months ended April 30 Six months ended April 30

2022 2021 2022 2021

Balance at beginning of period (1)

$ 121 $ 207 $ 131 $ 188

Trade receivables sold 3,002 2,947 5,969 6,489

2 unchanged sentences

Balance at end of period (1)

$ 173 $ 212 $ 173 $ 212

(1) Amounts outstanding from third parties reported in Accounts receivable in the Consolidated Condensed Balance Sheets.

January 31, 2022 October 31, 2021

April 30, 2022 October 31, 2021

Finished goods $ 5,324 $ 4,532

5 unchanged sentences

Other Current Assets

January 31, 2022 October 31, 2021

Supplier and other receivables $ 2,441 $ 2,333

April 30, 2022 October 31, 2021

Prepaid and other current assets $ 1,839 $ 1,092

Supplier and other receivables 1,761 2,333

Value-added taxes receivable 1,089 1,005

Available-for-sale investments 5 5

$ 4,689 $ 4,430

Property, Plant and Equipment, net

January 31, 2022 October 31, 2021

April 30, 2022 October 31, 2021

Land, buildings and leasehold improvements $ 2,182 $ 2,166

3 unchanged sentences

Other Non-Current Assets

January 31, 2022 October 31, 2021

April 30, 2022 October 31, 2021

Deferred tax assets $ 2,810 $ 2,917

1 unchanged sentence

Prepaid pension asset 837 766

Intangible assets 716 784

Deposits and prepaid 659 734

Intangible assets 651 784

Other 917 698

4 unchanged sentences

Other Current Liabilities

January 31, 2022 October 31, 2021

April 30, 2022 October 31, 2021

Sales and marketing programs $ 3,223 $ 3,179

Other accrued taxes 1,244 1,227

Deferred revenue 1,237 1,277

Other accrued taxes 1,214 1,227

Employee compensation and benefit 1,183 1,627

Warranty 649 731

Operating lease liabilities 358 350

Tax liability 374 296

Operating lease liabilities 353 350

Other 2,975 3,228

1 unchanged sentence

Other Non-Current Liabilities

January 31, 2022 October 31, 2021

April 30, 2022 October 31, 2021

Deferred revenue $ 1,146 $ 1,099

6 unchanged sentences

Interest and other, net

Three months ended January 31

Three months ended April 30 Six months ended April 30

2022 2021 2022 2021

Interest expense on borrowings $ ( 74 ) $ ( 64 ) $ ( 136 ) $ ( 128 )

5 unchanged sentences

Net revenue by region

Three months ended January 31

Three months ended April 30 Six months ended April 30

2022 2021 2022 2021

Americas $ 6,903 $ 6,846 $ 13,762 $ 13,740

3 unchanged sentences

Value of Remaining Performance Obligations

As of January 31, 2022, the estimated value of transaction price allocated to remaining performance obligations was $ 3.7 billion.

As of April 30, 2022, the estimated value of transaction price allocated to remaining performance obligations was $ 3.6 billion.

HP expects to recognize approximately $ 1.6 billion of the unearned amount in next 12 months and $ 2.0 billion thereafter.

5 unchanged sentences

Contract Liabilities

As of January 31, 2022 and October 31, 2021, HP’s contract liabilities balances were $ 2.3 billion, respectively, included in Other current liabilities and Other non-current liabilities in the Consolidated Condensed Balance Sheets.

The contract liabilities balance remained flat as of January 31, 2022, driven by sales of fixed-price support and maintenance services, partially offset by $ 0.4 billion of revenue recognized that was included in the contract liabilities balance as of October 31, 2021.

As of April 30, 2022 and October 31, 2021, HP’s contract liabilities balances were $ 2.4 billion and $ 2.3 billion, respectively, included in Other current liabilities and Other non-current liabilities in the Consolidated Condensed Balance Sheets.

The increase in the contract liabilities balance for the six months ended April 30, 2022, was primarily driven by sales of fixed-price support and maintenance services, partially offset by $ 0.7 billion of revenue recognized that was included in the contract liabilities balance as of October 31, 2021.

AND SUBSIDIARIES

10 unchanged sentences

The following table presents HP’s assets and liabilities that are measured at fair value on a recurring basis:

As of January 31, 2022 As of October 31, 2021

As of April 30, 2022 As of October 31, 2021

Fair Value Measured Using Fair Value Measured Using

39 unchanged sentences

The portion of HP’s debt that is hedged is reflected in the Consolidated Condensed Balance Sheets as an amount equal to the debt’s carrying amount and a fair value adjustment representing changes in the fair value of the hedged debt obligations arising from movements in benchmark interest rates.

The fair value of HP’s short- and long-term debt was $ 7.3 billion as compared to its carrying amount of $ 7.1 billion at January 31, 2022.

The fair value of HP’s short- and long-term debt was $ 8.4 billion as compared to its carrying amount of $ 9.0 billion at April 30, 2022.

The fair value of HP’s short- and long-term debt was $ 8.0 billion as compared to its carrying value of $ 7.5 billion at October 31, 2021.

11 unchanged sentences

Cash Equivalents and Available-for-Sale Investments

As of January 31, 2022 As of October 31, 2021

As of April 30, 2022 As of October 31, 2021

Cost Gross Unrealized Gain Gross Unrealized Loss Fair Value Cost Gross Unrealized Gain Gross Unrealized Loss Fair Value

10 unchanged sentences

All highly liquid investments with original maturities of three months or less at the date of acquisition are considered cash equivalents.

As of January 31, 2022 and October 31, 2021, the carrying amount of cash equivalents approximated fair value due to the short period of time to maturity.

As of April 30, 2022 and October 31, 2021, the carrying amount of cash equivalents approximated fair value due to the short period of time to maturity.

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

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

As of January 31, 2022

As of April 30, 2022

Amortized Cost Fair Value

1 unchanged sentence

Non-marketable equity securities in privately held companies are included in Other non-current assets in the Consolidated Condensed Balance Sheets.

These amounted to $ 63 million and $ 59 million as of January 31, 2022 and October 31, 2021, respectively.

These amounted to $ 65 million and $ 59 million as of April 30, 2022 and October 31, 2021, respectively.

HP determines credit losses on cash equivalents and available-for-sale debt securities at the individual security level.

All instruments are considered investment grade.

No credit-related or noncredit-related impairment losses were recorded for the three months ended January 31, 2022.

No credit-related or noncredit-related impairment losses were recorded for the three and six months ended April 30, 2022.

Derivative Instruments

12 unchanged sentences

If HP’s or the counterparty’s credit rating falls below a specified credit rating, either party has the right to request full collateralization of the derivatives’ net liability position.

The fair value of derivatives with credit contingent features in a net liability position was $ 30 million and $ 64 million as of January 31, 2022 and as of October 31, 2021, respectively, all of which were fully collateralized within two business days.

The fair value of derivatives with credit contingent features in a net liability position was $ 60 million and $ 64 million as of April 30, 2022 and as of October 31, 2021, respectively, all of which were fully collateralized within two business days.

Under HP’s derivative contracts, the counterparty can terminate all outstanding trades following a covered change of control event affecting HP that results in the surviving entity being rated below a specified credit rating.

This credit contingent provision did not affect HP’s financial position or cash flows as of January 31, 2022 and October 31, 2021.

This credit contingent provision did not affect HP’s financial position or cash flows as of April 30, 2022 and October 31, 2021.

Fair Value Hedges

5 unchanged sentences

however, hedges related to long-term procurement arrangements extend several years.

For derivative instruments that are designated and qualify as cash flow hedges, HP initially records changes in fair value of the derivative instrument in Accumulated other comprehensive loss as a separate component of stockholders’ deficit in the Consolidated Condensed Balance Sheets and subsequently reclassifies these amounts into earnings in the period during which the hedged transaction is recognized in earnings.

For derivative instruments that are designated and qualify as cash flow hedges, HP initially records changes in fair value of the derivative instrument in Accumulated other comprehensive income (loss) as a separate component of stockholders’ deficit in the Consolidated Condensed Balance Sheets and subsequently reclassifies these amounts into earnings in the period during which the hedged transaction is recognized in earnings.

HP reports the changes in the fair value of the derivative instrument in the same financial statement line item as changes in the fair value of the hedged item.

In March 2022, a series of forward starting swaps totaling $ 1.5 billion notional amount were settled upon the issuance of the senior unsecured notes resulting in a gain of $ 59 million recognized in accumulated other comprehensive income (loss).

The gain will be reclassified to Interest and other, net over a portion of the life of the related debt.

In April 2022, HP entered into a series of forward starting swap instruments with notional amount totaling $ 1.5 billion to hedge the exposure to variability in future cash flows resulting from changes in interest rates related to the anticipated issuance of long-term debt.

Other Derivatives

5 unchanged sentences

For foreign currency options, forward contracts and forward starting swaps designated as cash flow hedges, HP measures hedge effectiveness by comparing the cumulative change in fair value of the hedge contract with the cumulative change in fair value of the hedged item, both of which are based on forward rates.

During the three months ended January 31, 2022 and 2021, no portion of the hedging instruments’ gain or loss was excluded from the assessment of effectiveness for fair value and cash flow hedges.

During the three and six months ended April 30, 2022 and 2021, no portion of the hedging instruments’ gain or loss was excluded from the assessment of effectiveness for fair value and cash flow hedges.

Fair Value of Derivative Instruments in the Consolidated Condensed Balance Sheets

3 unchanged sentences

Financial Instruments (Continued)

As of January 31, 2022 As of October 31, 2021

As of April 30, 2022 As of October 31, 2021

Outstanding Gross Notional Other Current Assets Other Non-Current Assets Other Current Liabilities Other Non-Current Liabilities Outstanding Gross Notional Other Current Assets Other Non-Current Assets Other Current Liabilities Other Non-Current Liabilities

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HP does not offset the fair value of its derivative instruments against the fair value of cash collateral posted under its collateral security agreements.

As of January 31, 2022 and October 31, 2021, information related to the potential effect of HP’s master netting agreements and collateral security agreements was as follows:

As of April 30, 2022 and October 31, 2021, information related to the potential effect of HP’s master netting agreements and collateral security agreements was as follows:

In the Consolidated Condensed Balance Sheets

5 unchanged sentences

Collateral Net Amount

As of January 31, 2022

As of April 30, 2022

Derivative assets $ 1,009 $ — $ 1,009 $ 234 $ 654 (1) $ 121

11 unchanged sentences

Derivative Instrument Hedged Item Location Year Total amounts of income/(expense) line items in the statement of financial performance in which the effects of fair value hedges are recorded Gain/(loss) recognized in earnings on derivative instruments Gain/(loss) recognized in earnings on hedged item

Three months ended January 31

Three months ended April 30

Interest rate contract Fixed-rate debt Interest and other, net 2022 $ ( 39 ) $ ( 31 ) $ 31

2021 $ ( 26 ) $ ( 7 ) $ 7

The pre-tax effect of derivative instruments in cash flow hedging relationships included in Accumulated other comprehensive loss was as follows:

Three months ended January 31

Gain/(loss) recognized in Accumulated other comprehensive loss on derivatives:

Six months ended April 30

Interest rate contract Fixed-rate debt Interest and other, net 2022 $ ( 71 ) $ ( 42 ) $ 42

2021 $ ( 51 ) $ ( 10 ) $ 10

AND SUBSIDIARIES

Notes to Consolidated Condensed Financial Statements (Continued)

Financial Instruments (Continued)

The pre-tax effect of derivative instruments in cash flow hedging relationships included in Accumulated other comprehensive income (loss) was as follows:

Three months ended April 30 Six months ended April 30

2022 2021 2022 2021

Gain/(loss) recognized in Accumulated other comprehensive income (loss) on derivatives:

Foreign currency contracts $ 553 $ ( 21 ) $ 833 $ ( 387 )

2 unchanged sentences

Total amounts of income/(expense) line items in the statement of financial performance in which the effects of cash flow hedges are recorded Gain/(loss) reclassified from Accumulated

other comprehensive loss into earnings

Three months ended January 31 Three months ended January 31

other comprehensive income (loss) into earnings

Three months ended April 30 Six months ended April 30 Three months ended April 30 Six months ended April 30

2022 2021 2022 2021 2022 2021 2022 2021

2 unchanged sentences

Other operating expenses ( 2,055 ) ( 2,078 ) ( 4,081 ) ( 4,081 ) — 1 1 1

Interest and other, net ( 39 ) ( 26 ) ( 71 ) ( 51 ) ( 1 ) — ( 1 ) —

Total $ 120 $ ( 149 ) $ 164 $ ( 198 )

As of January 31, 2022, HP expects to reclassify an estimated accumulated other comprehensive gain of $ 188 million, net of taxes, to earnings within the next twelve months associated with cash flow hedges along with the earnings effects of the related forecasted transactions.

The amounts ultimately reclassified into earnings could be different from the amounts previously included in Accumulated other comprehensive loss based on the change of market rate, and therefore could have different impact on earnings.

AND SUBSIDIARIES

Notes to Consolidated Condensed Financial Statements (Continued)

Financial Instruments (Continued)

The pre-tax effect of derivative instruments not designated as hedging instruments recognized in Interest and other, net in the Consolidated Condensed Statements of Earnings for the three months ended January 31, 2022 and 2021 was as follows:

As of April 30, 2022, HP expects to reclassify an estimated accumulated other comprehensive gain of $ 475 million, net of taxes, to earnings within the next twelve months associated with cash flow hedges along with the earnings effects of the related forecasted transactions.

The amounts ultimately reclassified into earnings could be different from the amounts previously included in Accumulated other comprehensive income (loss) based on the change of market rate, and therefore could have different impact on earnings.

The pre-tax effect of derivative instruments not designated as hedging instruments recognized in Interest and other, net in the Consolidated Condensed Statements of Earnings for the three and six months ended April 30, 2022 and 2021 was as follows:

Gain/(loss) recognized in earnings on derivative instrument

Three months ended January 31

Three months ended April 30 Six months ended April 30

Location 2022 2021 2022 2021

5 unchanged sentences

Notes Payable and Short-Term Borrowings

As of January 31, 2022 As of October 31, 2021

As of April 30, 2022 As of October 31, 2021

Outstanding Weighted-Average

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Long-Term Debt

January 31, 2022 October 31, 2021

April 30, 2022 October 31, 2021

Dollar Global Notes (1)

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$ 1,000 issued at discount to par at a price of 99.573 % at 2.65 %, due June 2031 (2)

$ 1,000 issued at discount to par at a price of 99.767 % at 4.00 %, due April 2029

$ 1,000 issued at discount to par at a price of 99.966 % at 4.20 %, due April 2032

Other borrowings at 0.51 %- 9.00 %, due in calendar years 2022-2029

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and socioeconomic advancement and empowerment.

In March 2022, HP completed its offering of $ 2.0 billion aggregate principal amount of senior unsecured notes, consisting

of $ 1.0 billion of 4.00 % notes due April 2029 and $ 1.0 billion of 4.20 % notes due April 2032.

HP incurred issuance costs of $ 17 million.

HP will pay interest semi-annually on each series of the notes on April 15 and October 15, beginning October 15, 2022.

In March 2022, HP terminated a series of forward starting swap agreements with notional amounts totaling $ 1.5 billion that were executed to mitigate the treasury rate volatility associated with this debt issuance.

HP intends to use the net proceeds from the offering of the notes for general corporate purposes, which may include, without limitation, repayment and refinancing of debt, funding of acquisition opportunities, working capital, capital expenditures, and share repurchases.

As disclosed in Note 8, “Financial Instruments”, HP uses interest rate swaps to mitigate some of the exposure of its debt portfolio to changes in fair value resulting from changes in benchmark interest rates.

Interest rates shown in the table of long-term debt have not been adjusted to reflect the impact of any interest rate swaps.

AND SUBSIDIARIES

Notes to Consolidated Condensed Financial Statements (Continued)

Borrowings (Continued)

Commercial Paper

As of January 31, 2022, HP maintained two commercial paper programs.

As of April 30, 2022, HP maintained two commercial paper programs.

program provides for the issuance of U.S.

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The combined aggregate principal amount of commercial paper outstanding under those programs at any one time cannot exceed the $ 6.0 billion authorized by HP’s Board of Directors.

AND SUBSIDIARIES

Notes to Consolidated Condensed Financial Statements (Continued)

Borrowings (Continued)

Credit Facilities

As of January 31, 2022, HP maintained a $ 5.0 billion sustainability-linked senior unsecured committed revolving credit facility, which HP entered into on May 26, 2021.

Credit Facility

As of April 30, 2022, HP maintained a $ 5.0 billion sustainability-linked senior unsecured committed revolving credit facility, which HP entered into on May 26, 2021.

Commitments under the revolving credit facility will be available until May 26, 2026.

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Funds borrowed under the revolving credit facility may be used for general corporate purposes.

As of January 31, 2022, HP was in compliance with the covenants in the credit agreement governing the revolving credit facility.

As of April 30, 2022, HP was in compliance with the covenants in the credit agreement governing the revolving credit facility.

Available Borrowing Resources

As of January 31, 2022, HP had available borrowing resources of $ 633 million from uncommitted lines of credit in addition to the revolving credit facility.

As of April 30, 2022, HP had available borrowing resources of $ 550 million from uncommitted lines of credit in addition to the revolving credit facility.

Stockholders’ Deficit

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HP’s share repurchase program authorizes both open market and private repurchase transactions.

During the three months ended January 31, 2022, HP executed share repurchases of 42 million shares and settled total shares for $ 1.5 billion.

During the three months ended January 31, 2021, HP executed share repurchases of 61 million shares and settled total shares for $ 1.4 billion.

Share repurchases executed during the three months ended January 31, 2022 and 2021 included 1.1 million and 3.2 million shares settled in February 2022 and 2021, respectively.

The shares repurchased during the three months ended January 31, 2022 and 2021 were all open market repurchase transactions.

As of January 31, 2022, HP had approximately $ 4.9 billion remaining under the share repurchase authorizations approved by HP’s Board of Directors.

During the three and six months ended April 30, 2022, HP executed share repurchases of 27 million shares and 69 million shares and settled total shares for $ 1.0 billion and $ 2.5 billion respectively.

During the three and six months ended April 30, 2021, HP executed share repurchases of 52 million shares and 113 million and settled total shares for $ 1.6 billion and $ 3.0 billion respectively.

Share repurchases executed during the three and six months ended April 30, 2022 and 2021 included 1 million and 2 million shares settled in May 2022 and 2021, respectively.

The shares repurchased during the six months ended April 30, 2022 and 2021 were all open market repurchase transactions.

As of April 30, 2022, HP had approximately $ 3.9 billion remaining under the share repurchase authorizations approved by HP’s Board of Directors.

Tax effects related to Other Comprehensive Income (Loss)

AND SUBSIDIARIES

1 unchanged sentence

Stockholders' Deficit (Continued)

Tax effects related to Other Comprehensive Income (Loss)

Three months ended January 31

Three months ended April 30 Six months ended April 30

2022 2021 2022 2021

Tax effect on change in unrealized components of available-for-sale debt securities:

Tax provision on unrealized gains arising during the period $ — $ ( 1 )

Tax benefit (provision) on unrealized (losses) gains arising during the period $ 1 $ — $ 1 $ ( 1 )

Tax effect on change in unrealized components of cash flow hedges:

1 unchanged sentence

Tax provision (benefit) on (gains) losses reclassified into earnings 24 ( 17 ) 36 ( 21 )

( 90 ) ( 24 ) ( 110 ) 19

Tax effect on change in unrealized components of defined benefit plans:

1 unchanged sentence

Tax benefit on amortization of actuarial loss and prior service benefit ( 1 ) ( 5 ) ( 2 ) ( 10 )

Tax provision on curtailments, settlements and other ( 1 ) — ( 1 ) —

( 2 ) ( 16 ) ( 9 ) ( 21 )

Tax effect on change in cumulative translation adjustment 1 ( 1 ) 2 ( 6 )

Tax (provision) benefit on other comprehensive income (loss) $ ( 26 ) $ 32

Tax provision on other comprehensive income $ ( 90 ) $ ( 41 ) $ ( 116 ) $ ( 9 )

Changes and reclassifications related to Other Comprehensive Income (Loss), net of taxes

Three months ended January 31

Three months ended April 30 Six months ended April 30

2022 2021 2022 2021

Other comprehensive income (loss), net of taxes:

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(Gains) losses reclassified into earnings ( 96 ) 132 ( 128 ) 177

393 104 628 ( 170 )

Change in unrealized components of defined benefit plans:

Gains (losses) arising during the period 15 ( 1 )

Gains arising during the period 1 31 16 30

Amortization of actuarial loss and prior service benefit (1)

6 unchanged sentences

Stockholders' Deficit (Continued)

The components of Accumulated other comprehensive loss, net of taxes and changes were as follows:

Three months ended January 31, 2022

The components of Accumulated other comprehensive income (loss), net of taxes and changes were as follows:

Six months ended April 30, 2022

Net unrealized

gains (losses) on

available-for-sale debt

securities Net unrealized (losses) gains on cash

securities Net unrealized gains (losses) on cash

flow hedges Unrealized

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comprehensive

income (loss)

Balance at beginning of period $ 15 $ 19 $ ( 323 ) $ 29 $ ( 260 )

Other comprehensive income (loss) before reclassifications ( 2 ) 267 15 ( 9 ) 271

Reclassifications of losses into earnings — ( 32 ) 5 — ( 27 )

Other comprehensive (loss) gain before reclassifications ( 5 ) 756 16 ( 40 ) 727

Reclassifications of (gain) loss into earnings — ( 128 ) 9 — ( 119 )

Reclassifications of settlements into earnings — — ( 1 ) — ( 1 )

Balance at end of period $ 10 $ 647 $ ( 299 ) $ ( 11 ) $ 347

5 unchanged sentences

A reconciliation of the number of shares used for basic and diluted net EPS calculations is as follows:

Three months ended January 31

Three months ended April 30 Six months ended April 30

2022 2021 2022 2021

In millions, except per share amounts

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

HP believes it has recorded adequate provisions for any such matters and, as of January 31, 2022, it was not reasonably possible that a material loss had been incurred in excess of the amounts recognized in HP’s financial statements.

HP believes it has recorded adequate provisions for any such matters and, as of April 30, 2022, it was not reasonably possible that a material loss had been incurred in excess of the amounts recognized in HP’s financial statements.

HP reviews these matters at least quarterly and adjusts its accruals to reflect the impact of negotiations, settlements, rulings, advice of legal counsel, and other information and events pertaining to a particular case.

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On October 12, 2021, Oracle paid approximately $ 4.65 billion to satisfy the judgment with interest.

During the fourth quarter of fiscal 2021, HP recorded approximately $ 2.3 billion as a gain (Interest and other, net) in relation to the damages awarded, representing HP’s interest in the amount recovered, which is being shared equally between HP and Hewlett Packard Enterprise, less $ 47.4 million reimbursed to Hewlett Packard Enterprise for certain costs incurred in the prosecution of the action prior to the Separation.

During the fourth quarter of fiscal 2021, HP recorded approximately $ 2.3 billion as a gain (Interest and other, net) in relation to the damages awarded, representing HP’s interest in the amount recovered, which was shared equally between HP and Hewlett Packard Enterprise, less $ 47.4 million reimbursed to Hewlett Packard Enterprise for certain costs incurred in the prosecution of the action prior to the Separation.

On January 27, 2022, Oracle filed a petition for certiorari asking the United States Supreme Court for review.

Review by the United States Supreme Court is discretionary, and HP believes the likelihood the award of damages will be reduced or reversed is remote.

The petition was denied on May 16, 2022.

Oracle has exhausted legal appeals and has no further legal recourse to reverse the judgment.

Forsyth, et al.

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In October 2020, the ITC instituted an investigation, and Philips later withdrew two of the four patents.

On October 21, 2021, the ITC rendered an initial determination that there is no violation of Section 337.

The ITC is expected to render a final decision by March 23, 2022.

On March 23, 2022, the ITC rendered a final determination that no violation of section 337 has occurred.

Philips may file an appeal or resume litigation with its case in federal court.

In the ITC proceeding, Philips seeks an order enjoining respondents from importing, or selling after importation, the accused products.

11 unchanged sentences

2020-2222, which was issued on February 4, 2022.

The court has directed the parties to submit their positions regarding next steps on the stay.

On March 12, 2022, the parties filed a status report regarding whether the stay should be lifted.

In re HP Inc.

23 unchanged sentences

On March 3, 2022, the court granted the motion to dismiss with prejudice.

Plaintiffs are appealing the decision.

On May 17, 2021, stockholder Scott Franklin filed a derivative complaint against certain current and former officers and directors in federal court in the District of Delaware.

Plaintiff purports to bring the action on behalf of HP, which he has named as a nominal defendant, and it makes

Plaintiff purports to bring the action on behalf of HP, which he has named

AND SUBSIDIARIES

1 unchanged sentence

Litigation and Contingencies (Continued)

substantially the same factual allegations as in the York County securities complaint, bringing claims for breach of fiduciary duty and violations of securities laws.

as a nominal defendant, and it makes substantially the same factual allegations as in the York County securities complaint, bringing claims for breach of fiduciary duty and violations of securities laws.

The derivative plaintiff seeks compensatory damages, governance reforms, and other relief.

5 unchanged sentences

Legal Proceedings re Authentication of Supplies .

Civil litigation or government investigations involving supplies authentication protocols used in certain HP printers are pending, have concluded, or may be filed or opened in multiple geographies, including but not limited to the United States, Italy, Israel, and the Netherlands.

Since 2016, HP has from time to time been named in civil litigation, or been the subject of government investigations, involving supplies authentication protocols used in certain HP printers in multiple geographies, including but not limited to the United States, Italy, Israel, and the Netherlands.

The supplies authentication protocols are often referred to as Dynamic Security.

The core allegations in these proceedings claim misleading or inadequate consumer notifications and permissions pertaining to the use of Dynamic Security, the impact of firmware updates, or the potential inability of cartridges with clone chips or circuitry to work in HP printers with Dynamic Security.

123Inkt Foundation litigation (Netherlands) .

On November 23, 2016, a foundation known as Stichting 123Inkt-Huismerk Klanten (the “Foundation”) filed a complaint in district court in Amsterdam against HP Nederland B.V.

arising out of the use of Dynamic Security in certain OfficeJet printers.

Digital Revolution B.V.

(trading as 123Inkt) established the Foundation to pursue the interests of approximately 960 of its customers who transferred their claims to it.

The complaint alleges that HP’s use of Dynamic Security was unlawful, asserts a variety of claims, and seeks injunctive relief to prohibit use of Dynamic Security, damages, and attorneys’ fees.

In December 2019, the Amsterdam Court of Appeal rejected the Foundation’s argument that Dynamic Security is unlawful but ruled that error messages displayed on HP printers in September 2016 without providing prior warning regarding Dynamic Security were misleading.

Both parties appealed to the Supreme Court of the Netherlands.

On December 24, 2021, the Supreme Court issued its final decision concluding that both parties’ appeals should be rejected.

This affirms the Appeal Court decision.

No further appeal is permitted.

HP is named in a consolidated, consumer class action pending in the District Court in Jerusalem relating to HP’s use of Dynamic Security in certain OfficeJet printers, which was initially filed on October 25, 2017.

Plaintiff asserts consumer protection, tort and other statutory claims primarily on the basis that no information on Dynamic Security was available in Hebrew, and plaintiff seeks class relief, injunctive relief, damages, and attorneys’ fees.

HP has reached an agreement to settle this case, which the court approved on February 9, 2022.

Consumer Protection Investigation (Italy) .

In December 2020, the Italian Competition Authority (Autorità Garante della Concorrenza e del Mercato) (“AGCM”) notified HP of its decision that HP engaged in unfair commercial practices with respect to its disclosures to consumers about Dynamic Security and alleged use of certain warranty and data collection practices regarding the use of third-party cartridges in HP printers.

The AGCM decision (i) ordered HP to end the allegedly unfair commercial practices;

(ii) fined HP € 5 million for each alleged unfair practice (total € 10 million);

(iii) required HP to file a compliance report within 60 days;

(iv) ordered HP to publicly publish a corrective statement within 120 days;

and (v) ordered HP to amend the packaging of its printers within 120 days.

On December 21, 2020, HP paid the imposed fines.

On February 5, 2021, HP filed an appeal.

On April 6, 2021, HP filed its compliance report, which it subsequently supplemented, and, on June 23, 2021 the AGCM accepted the compliance plan as sufficient.

HP’s appeal is pending in front of the Regional Administrative Court of Lazio.

Digital Revolution B.V.

HP Nederland B.V., et al.

(Netherlands) .

On March 30, 2020, Digital Revolution B.V.

(trading as 123Inkt) served a complaint filed in Amsterdam District Court.

The complaint generally alleges that HP’s use of Dynamic Security in certain HP printers constituted a violation of competition law and unfair and misleading commercial practices and advertising.

The complaint asserts a variety of claims and seeks injunctive relief, including prohibition of Dynamic Security and disclosure of cartridge authentication protocols, damages, and attorneys’ fees.

On December 15, 2021, the court issued its decision rejecting the competition law claims, the request to prohibit Dynamic Security, and the remainder of 123Inkt’s claims but held HP liable to 123inkt where it can show, in separate proceedings, that it suffered damages resulting from the display of certain old error messages.

The decision is subject to appeal.

Mobile Emergency Housing Corp., et al.

(United States) .

In December 2020, HP was named in a putative nationwide consumer class action pending in federal court in California arising out of the use of Dynamic Security firmware updates in certain LaserJet printers.

The complaint alleges a variety of claims, including state consumer protection and unfair

AND SUBSIDIARIES

Notes to Consolidated Condensed Financial Statements (Continued)

Litigation and Contingencies (Continued)

business claims and state and federal computer access and data collection claims.

Plaintiffs seek compensatory damages, restitution, injunctive relief against alleged unfair business practices, and other relief.

The case is in its early stages and discovery has commenced.

The core allegations in these proceedings claim misleading or inadequate consumer notifications and permissions pertaining to the use of Dynamic Security, the installation of firmware updates, or the potential inability of cartridges with clone chips or circuitry to work in HP printers with Dynamic Security.

Plaintiffs base or have based their claims on various legal theories, including but not limited to unfair competition, computer trespass, and similar statutory claims.

Among other relief, Plaintiffs have sought or seek money damages and in certain cases have or may seek injunctive relief against the use or operation of Dynamic Security or relief requiring interoperability.

If HP is not successful in its defense of these cases or investigations, it could be subject to damages, penalties, significant settlement demands, or injunctive relief that may be costly or may disrupt operations.

Certain of these proceedings in Italy, the Netherlands and Israel have been resolved, have concluded, or have concluded subject only to HP’s pending appeal.

Civil litigation filed by Digital Revolution B.V.

(trading as 123Inkt) against HP Nederlands B.V., et al.

(Netherlands) in March 2020, including its competition claim, remains pending.

On December 15, 2021, the Dutch Supreme Court rejected 123Inkt’s competition law claims, its request to prohibit Dynamic Security, and other claims, but held HP liable to 123Inkt where it can show, in separate proceedings, that it suffered damages resulting from the display of certain old error messages.

Both parties have appealed.

In addition, two putative class actions have been filed against HP in federal court in California, in December 2020 and April 2022, arising out of the use of Dynamic Security firmware updates in HP Laserjet printers and HP Inkjet printers, respectively.

Plaintiffs in both cases seek compensatory damages, restitution, injunctive relief against alleged unfair business practices, and other relief.

The cases are in their early stages.

Autonomy-Related Legal Matters

8 unchanged sentences

In November 2018, a federal grand jury indicted Michael Lynch, former CEO of Autonomy, and Stephen Chamberlain, former VP of Finance of Autonomy.

The indictment charged Dr.

The indictment charged Mr.

Lynch and Mr.

4 unchanged sentences

Lynch extradited to face the charges.

The extradition decision is subject to appeal, and Mr.

Lynch has stated publicly that he intends to appeal.

In February 2022, Mr.

Lynch sought permission to appeal, and his request is pending.

HP is continuing to cooperate with the ongoing enforcement actions.

9 unchanged sentences

Trial was completed in January 2020.

On January 28, 2022, the court issued a summary of its key findings in a confidential draft judgment, including the court’s ruling that the claimants have substantially succeeded in their claims against Messrs.

Lynch and Hussein and that Mr.

Lynch’s counterclaim was “undermined” by the court’s findings and is, therefore, not addressed in the draft judgment.

The draft judgment remains confidential, and the court has stated it will be released after a usual process for checking and correction is completed, which the court has stated may take longer than usual given the length of the draft judgment.

The Court also stated that it will determine damages in a later, separate judgment and indicated that the damages awarded may be substantially less than is claimed.

No amount has yet been awarded.

On May 17, 2022, the court issued its final judgment, memorializing its findings that HP succeeded in substantially all of its claims

AND SUBSIDIARIES

Notes to Consolidated Condensed Financial Statements (Continued)

Litigation and Contingencies (Continued)

and that Messrs.

Lynch and Hussein engaged in fraud, and dismissing Mr.

Lynch’s counterclaim.

The court deferred its assessment of damages to a later, separate judgment to be issued after further submissions, but it has indicated that damages awarded may be substantially less than is claimed.

Litigation is unpredictable, and there can be no assurance that HP will recover damages or as to how any award of damages will compare with the amount claimed.

29 unchanged sentences

HP’s aggregate product warranty liabilities and changes were as follows:

Three months ended January 31, 2022

Six months ended April 30, 2022

Balance at beginning of period $ 959

3 unchanged sentences

Balance at end of period $ 907

AND SUBSIDIARIES

Notes to Consolidated Condensed Financial Statements (Continued)

Unconditional Purchase Obligations

As of April 30, 2022, HP had unconditional purchase obligations of $ 5.4 billion.

These unconditional purchase obligations include agreements to purchase goods or services that are enforceable and legally binding on HP and that specify all significant terms, including fixed or minimum quantities to be purchased, fixed, minimum or variable price provisions and the approximate timing of the transaction.

These unconditional purchase obligations are primarily related to inventory and service support.

Unconditional purchase obligations exclude agreements that are cancellable without penalty.

As of April 30, 2022, unconditional purchase obligations were as follows:

Fiscal year In millions

Thereafter 13

Total $ 5,412

(1) Represents expected unconditional purchase obligations for the remaining six months of the fiscal year 2022.

On March 25, 2022, we entered into a definitive agreement to acquire Plantronics, Inc.

(“Poly”), a leading global provider of workplace collaboration solutions, in an all-cash transaction for $ 40 per share, implying a total enterprise value of $ 3.3 billion, inclusive of Poly’s net debt.

Poly is a leader in video conferencing solutions, cameras, headsets, voice and software.

With the acquisition, we aim to deliver a complete ecosystem of devices, software, and digital services to create premium employee experiences, improve workforce productivity, and provide enterprise customers with better visibility, insights, security, and manageability across their hybrid IT environments.

We expect this acquisition to close by the end of calendar year 2022, subject to approval by Poly’s shareholders, required regulatory clearances, and the satisfaction of other customary closing conditions.

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

What changed 10-Q

Item 1. Financial Statements