What changed in this filing

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Item 1. Financial Statements

2023-03-01 compared with 2022-09-02 · 241 added, 357 removed, 760 unchanged (44% of the section changed)

Financial Statements and Supplementary Data.

Consolidated Condensed Statements of Earnings for the three and nine months ended July 3 1 , 2022 and 2021 (Unaudited)

Consolidated Condensed Statements of Comprehensive Income for the three and nine months ended July 3 1 , 2022 and 2021 (Unaudited)

Consolidated Condensed Balance Sheets as of July 3 1 , 2022 and October 31, 2021 (Unaudited)

Consolidated Condensed Statements of Cash Flows for the nine months ended July 3 1 , 2022 and 2021 (Unaudited)

Consolidated Condensed Statements of Earnings for the three months ended January 31, 2023 and 2022 (Unaudited)

Consolidated Condensed Statements of Comprehensive Income for the three months ended January 31, 2023 and 2022 (Unaudited)

Consolidated Condensed Balance Sheets as of January 31, 2023 and October 31, 2022 (Unaudited)

Consolidated Condensed Statements of Cash Flows for the three months ended January 31, 2023 and 2022 (Unaudited)

Consolidated Condensed Statements of Stockholders’ Deficit (Unaudited)

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Guarantees, Indemnifications and Warranties

Subsequent Events

AND SUBSIDIARIES

Consolidated Condensed Statements of Earnings

Three months ended July 31 Nine months ended July 31

2022 2021 2022 2021

Three months ended January 31

In millions, except per share amounts

5 unchanged sentences

Restructuring and other charges 141 68

Acquisition-related charges 31 24 83 40

Acquisition and divestiture charges 84 20

Amortization of intangible assets 85 52

Russia exit charges 23 — 23 —

Total costs and expenses 13,063 15,669

13 unchanged sentences

Consolidated Condensed Statements of Comprehensive Income

Three months ended July 31 Nine months ended July 31

2022 2021 2022 2021

Three months ended January 31

Net earnings $ 487 $ 1,086

1 unchanged sentence

Change in unrealized components of available-for-sale debt securities:

Unrealized (losses) gains arising during the period ( 1 ) 1 ( 7 ) 5

Change in unrealized components of cash flow hedges:

Unrealized gains (losses) arising during the period 4 ( 2 )

(Gains) losses reclassified into earnings ( 327 ) 64 ( 491 ) 262

( 47 ) 197 691 8

Change in unrealized components of cash flow hedges:

Unrealized (losses) gains arising during the period ( 623 ) 299

Gains reclassified into earnings ( 334 ) ( 44 )

Change in unrealized components of defined benefit plans:

Gains (losses) arising during the period 10 ( 1 ) 32 40

(Losses) gains arising during the period ( 38 ) 21

Amortization of actuarial loss and prior service benefit — 6

2 unchanged sentences

Other comprehensive (loss) income before taxes ( 961 ) 270

Provision for taxes ( 62 ) ( 32 ) ( 178 ) ( 41 )

Benefit from (provision for) taxes 192 ( 26 )

Other comprehensive (loss) income, net of taxes ( 769 ) 244

Comprehensive income $ 1,009 $ 1,295 $ 3,702 $ 3,514

Comprehensive (loss) income $ ( 282 ) $ 1,330

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

1 unchanged sentence

Consolidated Condensed Balance Sheets

July 31, 2022 October 31, 2021

January 31, 2023 October 31, 2022

In millions, except par value

Current assets:

Cash and cash equivalents $ 5,386 $ 4,299

Cash, cash equivalents and restricted cash $ 1,769 $ 3,145

Accounts receivable, net of allowance for credit losses of $ 89 and $ 107 , respectively

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

1,006 and 1,092 shares issued and outstanding at July 31, 2022 and October 31, 2021, respectively)

985 and 980 shares issued and outstanding at January 31, 2023 and October 31, 2022, respectively)

Additional paid-in capital 1,256 1,172

Accumulated deficit ( 4,540 ) ( 4,413 )

Accumulated other comprehensive income (loss) 237 ( 260 )

Accumulated other comprehensive (loss) income ( 456 ) 313

Total stockholders’ deficit ( 3,730 ) ( 2,918 )

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Consolidated Condensed Statements of Cash Flows

Nine months ended July 31

Three months ended January 31

Cash flows from operating activities:

Net earnings $ 487 $ 1,086

Adjustments to reconcile net earnings to net cash provided by operating activities:

Adjustments to reconcile net earnings to net cash (used in) provided by operating activities:

Depreciation and amortization 209 197

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Other assets and liabilities 250 ( 988 )

Net cash provided by operating activities 2,559 3,561

Net cash (used in) provided by operating activities ( 16 ) 1,657

Cash flows from investing activities:

Investment in property, plant and equipment, net ( 192 ) ( 273 )

Proceeds from sale of property, plant and equipment 26 —

Purchases of available-for-sale securities and other investments ( 4 ) —

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Cash flows from financing activities:

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

Proceed from (Payment of) short-term borrowings with original maturities less than 90 days, net 200 ( 400 )

Proceeds from debt, net of issuance costs 52 39

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Cash dividends paid ( 259 ) ( 271 )

Settlement of cash flow hedges 79 —

Collateral returned for derivative instruments ( 200 ) —

Net cash used in financing activities ( 925 ) ( 2,282 )

Increase (decrease) in cash and cash equivalents 1,087 ( 1,425 )

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

Cash and cash equivalents at end of period $ 5,386 $ 3,439

Decrease in cash, cash equivalents and restricted cash ( 1,376 ) ( 905 )

Cash, cash equivalents and restricted cash at beginning of period 3,145 4,299

Cash, cash equivalents and restricted cash at end of period $ 1,769 $ 3,394

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

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

Net earnings 1,108 1,108

Other comprehensive income, net of taxes 187 187

Comprehensive income 1,295

Issuance of common stock in connection with employee stock plans and other 968 7 7

Repurchases of common stock (Note 10) ( 49,704 ) — ( 44 ) ( 1,456 ) ( 1,500 )

Cash dividends ($$ 0.39 per common share)

( 453 ) ( 453 )

Stock-based compensation expense 69 69

Balance July 31, 2021 1,152,519 $ 12 $ 1,050 $ ( 3,871 ) $ ( 1,133 ) $ ( 3,942 )

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

Net earnings 1,119 1,119

Other comprehensive loss, net of taxes ( 110 ) ( 110 )

Comprehensive income 1,009

Issuance of common stock in connection with employee stock plans and other 1,068 9 9

Repurchases of common stock (Note 10) ( 28,522 ) ( 30 ) ( 971 ) ( 1,001 )

Cash dividends ($$ 0.50 per common share)

( 507 ) ( 507 )

Stock-based compensation expense 70 70

Balance July 31, 2022 1,005,938 $ 10 $ 1,130 $ ( 3,695 ) $ 237 $ ( 2,318 )

Common Stock Additional

Paid-in Capital Accumulated

Comprehensive Income (Loss) Total Stockholders’ Deficit

Comprehensive Loss Total Stockholders’ Deficit

Number of Shares Par Value Accumulated Deficit

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Stock-based compensation expense 133 133

Balance July 31, 2021 1,152,519 $ 12 $ 1,050 $ ( 3,871 ) $ ( 1,133 ) $ ( 3,942 )

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

Balance October 31, 2022 979,869 $ 10 $ 1,172 $ ( 4,413 ) $ 313 $ ( 2,918 )

Net earnings 487 487

Other comprehensive income, net of taxes 497 497

Comprehensive income 3,702

Other comprehensive loss, net of taxes ( 769 ) ( 769 )

Comprehensive loss ( 282 )

Issuance of common stock in connection with employee stock plans and other 8,844 ( 79 ) ( 79 )

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Stock-based compensation expense 167 167

Balance July 31, 2022 1,005,938 $ 10 $ 1,130 $ ( 3,695 ) $ 237 $ ( 2,318 )

Balance January 31, 2023 985,089 $ 10 $ 1,256 $ ( 4,540 ) $ ( 456 ) $ ( 3,730 )

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

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Actual results may differ materially from those estimates.

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

As of January 31, 2023, the extent to which the current macroeconomic factors 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.

As the events continue to evolve with respect to the pandemic, our estimates may materially change in future periods.

Recently Adopted Accounting Pronouncements

In October 2021, the Financial Accounting Standards Board (“FASB”) issued guidance on the recognition and measurement of contract assets and contract liabilities acquired in a business combination.

This guidance requires that an acquirer recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with ASC 606, Revenue from Contracts with Customers, as if the acquirer had originated the contracts.

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.

As the events continue to evolve with respect to the ongoing macroeconomic factors, our estimates may materially change in future periods.

Recently Adopted Accounting Pronouncements Not Yet Adopted

In September 2022, the FASB issued guidance that enhances the transparency about the use of supplier finance programs.

Under the new guidance, companies that use a supplier finance program in connection with the purchase of goods or services will be required to disclose information about the program to allow users of financial statements to understand the program’s nature, activity during the period, changes from period to period, and potential magnitude.

HP is required to adopt the guidance in the first quarter of fiscal year 2024, except for the amendment on roll forward information which is effective one year later.

Early adoption is permitted.

HP is currently evaluating the impact of this guidance on the Consolidated Condensed Financial Statements.

AND SUBSIDIARIES

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A summary description of each segment is as follows:

Personal Systems offers commercial and consumer desktop and notebook personal computers (“PCs”), workstations, thin clients, commercial mobility devices, retail point-of-sale (“POS”) systems, displays and peripherals, software, support and services.

HP groups commercial notebooks, commercial desktops, commercial services, commercial mobility devices, commercial detachables and convertibles, workstations, retail POS systems and thin clients into commercial PCs and consumer notebooks, consumer desktops, consumer services and consumer detachables into consumer PCs when describing performance in these markets.

Described below are HP’s global business capabilities within Personal Systems:

• Commercial PCs are optimized for use by enterprise, public sector (which includes education), and SMB customers, with a focus on robust designs, security, serviceability, connectivity, reliability and manageability in the customer’s environment.

Additionally, HP offers a range of services and solutions to enterprise, public sector (which includes education), and SMB customers to help them manage the lifecycle of their PC and mobility installed base.

• Consumer PCs are optimized for consumer usage, focusing on gaming, learning and working remotely, consuming multi-media for entertainment, managing personal life activities, staying connected, sharing information, getting things done for work including creating content and staying informed and secure.

Personal Systems offers commercial and consumer customers desktops and notebooks, workstations, thin clients, commercial mobility devices, retail point-of-sale (“POS”) systems, displays, hybrid systems (includes video conferencing solutions, cameras, headsets, voice, and related software capabilities including all products and solutions acquired from Poly), software, support and services.

HP groups commercial notebooks, commercial desktops, commercial services, commercial mobility devices, commercial detachables and convertibles, workstations, retail POS systems and thin clients into commercial (“Commercial PS”), and consumer notebooks, consumer desktops, consumer services and consumer detachables into consumer (“Consumer PS”) when describing performance in these markets.

Commercial and Consumer services include support and deployment, configurations and extended warranty services.

Personal Systems groups its global business capabilities into the following business units when reporting business performance:

• Notebooks consists of consumer notebooks, commercial notebooks, mobile workstations, peripherals, and commercial mobility devices;

• Desktops includes consumer desktops, commercial desktops, thin clients, displays, peripherals, and retail POS systems;

• Workstations consists of desktop workstations, displays, and peripherals;

• Other consists of consumer and commercial services as well as other Personal Systems capabilities.

• Commercial PS consist of endpoint computing devices and hybrid systems, for use by enterprise, public sector (which includes education), and SMB customers, with a focus on robust designs, security, serviceability, connectivity, reliability and manageability in the customer’s environment.

Additionally, HP offers a range of services and solutions to enterprise, public sector (which includes education), and SMB customers to help them manage the lifecycle of their personal computers (“PCs”) and mobility installed base.

• Consumer PS consist of devices, accessories and services which are optimized for consumer usage, focusing on gaming, learning and working remotely, consuming multi-media for entertainment, managing personal life activities, staying connected, sharing information, getting things done for work including creating content and staying informed and secure.

Printing provides consumer and commercial printer hardware, supplies, services and solutions.

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• Office Printing Solutions delivers HP’s office printers, supplies, services and solutions to SMBs and large enterprises.

It also includes OEM hardware and solutions, and some Samsung-branded supplies.

It also includes OEM hardware and solutions.

• Home Printing Solutions delivers innovative printing products, supplies, services and solutions for the home, home business and micro business customers utilizing both HP’s Ink and Laser technologies.

It also includes some Samsung-branded supplies.

• Graphics Solutions delivers large-format, commercial and industrial solutions and supplies to print service providers and packaging converters through a wide portfolio of printers and presses (HP DesignJet, HP Latex, HP Indigo and HP PageWide Web Presses).

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Printing groups its global business capabilities into the following business units when reporting business performance:

• Commercial consists of office printing solutions, graphics solutions and 3D printing and digital manufacturing, excluding supplies;

• Consumer consists of home printing solutions, excluding supplies;

• Commercial Printing consists of office printing solutions, graphics solutions and 3D printing and digital manufacturing, excluding supplies;

• Consumer Printing consists of home printing solutions, excluding supplies;

• Supplies comprises a set of highly innovative consumable products, ranging from ink and laser cartridges to media, graphics supplies, and 3D printing and digital manufacturing supplies, for recurring use in consumer and commercial hardware.

Corporate Investments includes HP Labs and certain business incubation and investment projects.

Corporate Investments includes certain business incubation and investment projects.

The accounting policies HP uses to derive segment results are substantially the same as those used by HP in preparing these financial statements.

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

These unallocated amounts include expenses such as certain corporate governance costs and infrastructure investments, stock-based compensation expense, restructuring and other charges, acquisition-related charges, amortization of intangible assets and Russia exit charges.

These unallocated amounts include expenses such as certain corporate governance costs and infrastructure investments, stock-based compensation expense, restructuring and other charges, acquisition and divestiture charges and amortization of intangible assets.

Effective first quarter of fiscal 2023, HP realigned the Personal Systems business units reporting structure into Commercial PS and Consumer PS to align with its customer market segmentation.

Additionally, in connection with certain other organizational realignments, some costs which were earlier reflected under “Corporate and unallocated cost and other”, have now been reclassified to the Personal Systems and Printing segments.

HP has reflected these changes to its prior reporting periods on an as-if basis.

The reporting change had no impact to previously reported segment net revenue, consolidated net revenue, net earnings or net earnings per share (“EPS”).

AND SUBSIDIARIES

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

Three months ended July 31 Nine months ended July 31

2022 2021 2022 2021

Notebooks $ 6,574 $ 7,328 $ 22,729 $ 22,183

Desktops 2,537 2,246 8,199 6,871

Workstations 537 388 1,565 1,177

Other 441 444 1,324 1,333

Three months ended January 31

Commercial PS $ 6,429 $ 7,857

Consumer PS 2,786 4,339

Personal Systems 9,215 12,196

Supplies 2,857 3,068

Commercial 1,036 1,070 3,117 3,112

Consumer 725 720 2,239 2,562

Commercial Printing 1,056 1,039

Consumer Printing 699 724

Printing 4,612 4,831

1 unchanged sentence

Total segment net revenue 13,828 17,028

Other — 1 ( 5 ) ( 2 )

Total net revenue $ 13,828 $ 17,028

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Restructuring and other charges ( 141 ) ( 68 )

Acquisition-related charges ( 31 ) ( 24 ) ( 83 ) ( 40 )

Acquisition and divestiture charges ( 84 ) ( 20 )

Amortization of intangible assets ( 85 ) ( 52 )

Russia exit charges ( 23 ) — ( 23 ) —

Interest and other, net ( 181 ) ( 32 )

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Summary of Restructuring Plans

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

HP’s restructuring activities for the three months ended January 31, 2023 and 2022 summarized by plan were as follows:

Fiscal 2023 Plan

Severance and EER Non-labor Other prior-year plan Total

Severance Non-labor Other prior-year Plans (1)

Accrued balance as of October 31, 2022 $ — $ — $ 32 $ 32

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Non-cash and other adjustments ( 2 ) ( 5 ) 1 ( 6 )

Accrued balance as of July 31, 2022 $ 20 $ — $ — $ 20

Total costs incurred to date as of July 31, 2022 $ 698 $ 110 $ 504 $ 1,312

Accrued balance as of January 31, 2023 $ 67 $ — $ 8 $ 75

Total costs incurred to date as of January 31, 2023 $ 122 $ 9 $ 865 $ 996

Reflected in Consolidated Condensed Balance Sheets

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Non-cash and other adjustments — — ( 7 ) ( 7 )

Accrued balance as of July 31, 2021 $ 86 $ — $ — $ 86

HP’s restructuring charges for the three months ended July 31, 2022 summarized by the plans outlined below were as follows:

Fiscal 2020 Plan

Severance and EER Non-labor Other prior-year plan Total

For the three months ended July 31, 2022 $ 4 $ 5 $ ( 3 ) $ 6

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

(1) Primarily includes the fiscal 2020 plan along with other legacy plans, all of which are substantially complete.

HP does not expect any further material activity associated with these plans.

Fiscal 2023 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.

HP expects to reduce global headcount by approximately 7,000 to 9,000 employees through a combination of employee exits and voluntary EER.

On November 18, 2022, HP’s Board of Directors approved the Fiscal 2023 Plan intended to enable digital transformation, portfolio optimization and operational efficiency which HP expects will be implemented through fiscal 2025.

HP expects to reduce global headcount by approximately 4,000 to 6,000 employees.

HP estimates that it will incur pre-tax charges of approximately $ 1.0 billion relating to labor and non-labor actions.

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Other charges include non-recurring costs, including those as a result of information technology rationalization efforts, and are distinct from ongoing operational costs.

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

For the three and nine months ended July 31, 2022, HP incurred $ 7 million and $ 12 million of other charges, respectively.

For the three and nine months ended July 31, 2021, HP incurred $ 8 million and $ 17 million of other charges, respectively.

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

For the three months ended January 31, 2023 and 2022, HP incurred $ 10 million and $ 1 million of other charges, respectively.

AND SUBSIDIARIES

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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 July 31

Defined Benefit Plans Non-U.S.

Defined Benefit Plans Post-Retirement Benefit Plans

2022 2021 2022 2021 2022 2021

Service cost $ — $ — $ 14 $ 16 $ 1 $ —

Interest cost 41 76 5 5 2 2

Expected return on plan assets ( 72 ) ( 127 ) ( 12 ) ( 13 ) ( 2 ) ( 5 )

Amortization and deferrals:

Actuarial loss (gain) 1 14 9 13 ( 4 ) ( 4 )

Prior service cost (credit) — — 1 ( 1 ) ( 2 ) ( 2 )

Net periodic benefit (credit) cost ( 30 ) ( 37 ) 17 20 ( 5 ) ( 9 )

Settlement gain — — ( 1 ) — — —

Total periodic benefit (credit) cost $ ( 30 ) $ ( 37 ) $ 16 $ 20 $ ( 5 ) $ ( 9 )

Nine months ended July 31

Three months ended January 31

Defined Benefit Plans Non-U.S.

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Net periodic benefit (credit) cost ( 6 ) ( 33 ) 8 19 ( 6 ) ( 7 )

Settlement loss (gain) — 1 ( 1 ) — — —

Settlement loss — — 1 — — —

Total periodic benefit (credit) cost $ ( 6 ) $ ( 33 ) $ 9 $ 19 $ ( 6 ) $ ( 7 )

Employer Contributions and Funding Policy

HP’s policy is to fund its pension plans at least the minimum contribution amount required by local government, funding and taxing authorities.

HP’s policy is to fund its pension plans so that it makes at least the minimum contribution required by local government, funding and taxing authorities.

During fiscal year 2023, HP anticipates making contributions of approximately $ 36 million to its non-U.S.

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

During the nine months ended July 31, 2022, HP contributed $ 25 million to its non-U.S.

During the three months ended January 31, 2023, HP contributed $ 13 million to its non-U.S.

pension plans, paid $ 6 million to cover benefit payments to U.S.

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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.

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 nine months ended July 31, 2022.

Retirement Incentive Program

As part of the Fiscal 2023 Plan, HP announced a voluntary enhanced early retirement (EER) program for its U.S.

employees in January 2023.

Voluntary participation in the EER program was limited to employees at least 55 years old with 10 or more years of service at HP.

Employees accepted into the EER program will leave HP on dates ranging from March 15, 2023 to October 31, 2023.

defined benefit pension plan will be amended to provide that the EER benefit will be paid from the plan for electing EER participants who are current participants in the pension plan.

The retirement incentive benefit will be calculated as a lump sum based on years of service at HP at the time of retirement, ranging from 20 to 52 weeks of pay.

All employees participating in the EER program are offered the opportunity to continue health care coverage at the active employee contribution rates for up to 36 months following retirement.

In addition, HP is providing up to $ 12,000 in employer credits under the Retirement Medical Savings Account program.

HP will recognize a special termination benefits expense as restructuring and other charges.

AND SUBSIDIARIES

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Provision for Taxes

HP’s effective tax rate was 7.0 % and 16.5 % for the three months ended July 31, 2022 and 2021, respectively, and 15.0 % and 14.0 % for the nine months ended July 31, 2022 and 2021, respectively.

HP’s effective tax rate was 16.6 % and 18.2 % for the three months ended January 31, 2023 and 2022, respectively.

The difference between the U.S.

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

During the three and nine months ended July 31, 2022, HP recorded $ 132 million and $ 97 million, respectively, of net income tax benefits related to discrete items in the provision for taxes.

These amounts included income tax benefits of $ 161 million and $ 144 million related to the filing of tax returns in various jurisdictions for the three and nine months ended July 31, 2022 and $ 3 million and $ 34 million related to restructuring charges for the three and nine months ended July 31, 2022, respectively.

The three and nine months ended July 31, 2022 also included $ 87 million of tax benefits related to internal reorganization.

These benefits were partially offset by income tax charges of $ 109 million and $ 104 million related to uncertain tax positions and $ 10 million and $ 19 million related to audit settlements in various jurisdictions for the three and nine months ended July 31, 2022, respectively.

The nine months ended July 31, 2022 also included tax charges of $ 55 million related to withholding taxes on undistributed foreign earnings.

In addition to the discrete items mentioned above, HP recorded excess tax benefits of $ 32 million associated with stock options, restricted stock units and performance-adjusted restricted stock units for the nine months ended July 31, 2022.

During the three and nine months ended July 31, 2021, HP recorded $ 21 million and $ 150 million, respectively, of net income tax benefits related to discrete items in the provision for taxes.

These amounts included income tax benefits of $ 9 million and $ 45 million related to restructuring charges, and $ 23 million and $ 30 million related to the filing of tax returns in various jurisdictions for the three and nine months ended July 31, 2021, respectively.

The nine months ended July 31, 2021 also included a tax benefit of $ 89 million related to tax effects of internal reorganization and a tax benefit of $ 10 million related to audit settlements in various jurisdictions.

These benefits were partially offset by uncertain tax position charges of $ 13 million and $ 25 million for the three and nine months ended July 31, 2021, respectively.

For the three and nine months ended July 31, 2021, 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 months ended January 31, 2023 and 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.

During the three months ended January 31, 2023, HP recorded $ 56 million of net income tax benefits related to discrete items in the provision for taxes.

These amounts included $ 30 million of income tax benefits related to restructuring charges, $ 14 million related to acquisition charges and $ 12 million of other net tax benefits.

During the three months ended January 31, 2023, 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.

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.

Uncertain Tax Positions

As of July 31, 2022, the amount of gross unrecognized tax benefits was $ 961 million, of which up to $ 777 million would affect HP’s effective tax rate if realized.

Total gross unrecognized tax benefits increased by $ 141 million for the nine months ended July 31, 2022.

As of January 31, 2023, the amount of gross unrecognized tax benefits was $ 1.0 billion, of which up to $ 807 million would affect HP’s effective tax rate if realized.

Total gross unrecognized tax benefits decreased by $ 14 million for the three months ended January 31, 2023.

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 July 31, 2022 and 2021, HP had accrued $ 76 million and $ 70 million, respectively, for interest and penalties.

As of January 31, 2023 and 2022, HP had accrued $ 73 million and $ 75 million, respectively, for interest and penalties.

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

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In addition, HP is subject to numerous ongoing audits by federal, state and foreign tax authorities.

The IRS is conducting an audit of HP’s 2018 and 2019 income tax returns.

The Internal Revenue Service (“IRS”) is conducting an audit of HP’s 2018 and 2019 income tax returns.

AND SUBSIDIARIES

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Supplementary Financial Information

Cash, cash equivalents and restricted cash

January 31, 2023 October 31, 2022

Cash and cash equivalents $ 1,405 $ 3,145

Restricted cash (1)

$ 1,769 $ 3,145

(1) Restricted Cash is related to amounts collected and held on behalf of a third party for trade receivables previously sold.

Accounts Receivable

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

Nine months ended July 31, 2022

Three months ended January 31, 2023

Balance at beginning of period $ 107

Current-period allowance for credit losses 10

Benefit of allowance for credit losses ( 16 )

Deductions, net of recoveries ( 2 )

Balance at end of period $ 89

HP has in place certain third-party arrangements consisting of revolving short-term financing, which provide liquidity to certain partners to facilitate their working capital requirements.

HP utilizes certain third-party arrangements in the normal course of business as part of HPs cash and liquidity management and also to provide liquidity to certain partners to facilitate their working capital requirements.

These financing arrangements, which in certain circumstances may contain partial recourse, result in a transfer of HP’s receivables and risk to the third-party.

1 unchanged sentence

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 July 31, 2022 and October 31, 2021, and the costs associated with the sale of trade receivables for the three and nine months ended July 31, 2022 and 2021 were not material.

The recourse obligations as of January 31, 2023 and October 31, 2022 and the costs associated with the sale of trade receivables for the three months ended January 31, 2023 and 2022 were not material.

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

Three months ended July 31 Nine months ended July 31

2022 2021 2022 2021

Three months ended January 31

Balance at beginning of period (1)

$ 173 $ 212 $ 131 $ 188

Trade receivables sold 3,679 2,967

2 unchanged sentences

Balance at end of period (1)

$ 189 $ 166 $ 189 $ 166

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

July 31, 2022 October 31, 2021

Finished goods $ 5,334 $ 4,532

Purchased parts and fabricated assemblies 2,858 3,398

$ 8,192 $ 7,930

AND SUBSIDIARIES

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Supplementary Financial Information (Continued)

January 31, 2023 October 31, 2022

Finished goods $ 4,146 $ 4,885

Purchased parts and fabricated assemblies 3,198 2,710

$ 7,344 $ 7,595

Other Current Assets

July 31, 2022 October 31, 2021

Supplier and other receivables $ 2,173 $ 2,333

January 31, 2023 October 31, 2022

Prepaid and other current assets $ 1,685 $ 2,170

Supplier and other receivables 1,279 1,377

Value-added taxes receivable 916 968

1 unchanged sentence

Property, Plant and Equipment, net

July 31, 2022 October 31, 2021

January 31, 2023 October 31, 2022

Land, buildings and leasehold improvements $ 2,259 $ 2,255

3 unchanged sentences

Other Non-Current Assets

July 31, 2022 October 31, 2021

January 31, 2023 October 31, 2022

Deferred tax assets $ 2,453 $ 2,159

Right-of-use assets from operating leases, net 1,144 1,192

Prepaid pension asset 880 766

Deposits and prepaid 596 734

Intangible assets 1,858 1,933

Right-of-use assets 1,242 1,236

Deposits and prepaid 564 588

Prepaid pension asset 548 565

Other 822 990

$ 7,487 $ 7,471

Other Current Liabilities

AND SUBSIDIARIES

1 unchanged sentence

Supplementary Financial Information (Continued)

July 31, 2022 October 31, 2021

Other Current Liabilities

January 31, 2023 October 31, 2022

Sales and marketing programs $ 3,022 $ 2,967

8 unchanged sentences

Other Non-Current Liabilities

July 31, 2022 October 31, 2021

January 31, 2023 October 31, 2022

Deferred revenue $ 1,187 $ 1,171

Pension, post-retirement, and post-employment liabilities 935 1,041

Operating lease liabilities 836 936

Tax liability 925 931

Operating lease liabilities 903 875

Pension, post-retirement, and post-employment liabilities 602 600

Deferred tax liability 52 121

1 unchanged sentence

$ 4,488 $ 4,556

Russia exit charges

For the three months ended July 31, 2022, HP recognized charges of $ 23 million towards severance, cancellation of contracts, inventory write-downs and other one-time exit charges related to our decision to wind down our operations in Russia.

Interest and other, net

Three months ended July 31 Nine months ended July 31

2022 2021 2022 2021

Three months ended January 31

Interest expense on borrowings $ ( 143 ) $ ( 61 )

Loss on extinguishment of debt ( 8 ) —

Non-operating retirement-related credits 11 36

Other, net ( 41 ) ( 7 )

4 unchanged sentences

Net revenue by region

Three months ended July 31 Nine months ended July 31

2022 2021 2022 2021

Three months ended January 31

Americas $ 5,773 $ 6,859

3 unchanged sentences

Value of Remaining Performance Obligations

As of July 31, 2022, the estimated value of transaction price allocated to remaining performance obligations was $ 3.4 billion.

As of January 31, 2023, the estimated value of transaction price allocated to remaining performance obligations was $ 3.6 billion.

HP expects to recognize approximately $ 1.7 billion of the unearned amount in next 12 months and $ 1.9 billion thereafter.

5 unchanged sentences

Contract Liabilities

As of July 31, 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 nine months ended July 31, 2022 was primarily driven by sales of fixed-price support and maintenance services, partially offset by $ 1.0 billion of revenue recognized that was included in the contract liabilities balance as of October 31, 2021.

Changes in Variable Consideration

HP reduces the transaction price at the time performance obligations are satisfied for various customer and distributor sales incentive and promotional programs.

During the three months ended July 31, 2021, we recorded an increase to our estimated transaction price for performance obligations satisfied in the prior periods of approximately $ 350 million.

The change in estimate was a result of lower-than-expected marketing incentives due to increasing supply constraints, shifts in customer behavior and the evolving impact of the COVID-19 pandemic.

The changes in estimates recorded during the three and nine months ended July 31, 2022, and nine months ended July 31, 2021 were immaterial.

As of January 31, 2023 and October 31, 2022, HP’s contract liabilities balances were $ 2.5 billion respectively, and 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, 2023, driven by sales of fixed-price support and maintenance services, partially offset by $ 0.5 billion of revenue recognized that was included in the contract liabilities balance as of October 31, 2022.

AND SUBSIDIARIES

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

As of July 31, 2022 As of October 31, 2021

As of January 31, 2023 As of October 31, 2022

Fair Value Measured Using Fair Value Measured Using

6 unchanged sentences

Financial institution instruments — 5 — 5 — 5 — 5

Marketable equity securities and mutual funds

Marketable securities and mutual funds

18 47 — 65 17 41 — 58

6 unchanged sentences

Foreign currency contracts — 496 — 496 — 295 — 295

Other derivatives — — — — — 1 — 1

Total liabilities $ — $ 560 $ — $ 560 $ — $ 374 $ — $ 374

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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 $ 10.5 billion as compared to its carrying amount of $ 11.0 billion at July 31, 2022.

The fair value of HP’s short- and long-term debt was $ 10.0 billion as compared to its carrying amount of $ 10.8 billion at January 31, 2023.

The fair value of HP’s short- and long-term debt was $ 9.6 billion as compared to its carrying value of $ 11.0 billion at October 31, 2022.

2 unchanged sentences

For the balance of HP’s financial instruments, primarily accounts receivable, accounts payable and financial liabilities included in Other current liabilities on the Consolidated Condensed Balance Sheets, the carrying amounts approximate fair value due to their short maturities.

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

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

Non-Marketable Equity Investments and Non-Financial Assets:

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Cash Equivalents and Available-for-Sale Investments

As of July 31, 2022 As of October 31, 2021

As of January 31, 2023 As of October 31, 2022

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

5 unchanged sentences

Financial institution instruments 5 — — 5 5 — — 5

Marketable equity securities and mutual funds

Marketable securities and mutual funds

53 12 — 65 50 8 — 58

2 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 July 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 January 31, 2023 and October 31, 2022, 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 July 31, 2022

As of January 31, 2023

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 $ 109 million and $ 59 million as of July 31, 2022 and October 31, 2021, respectively.

These amounted to $ 110 million as of each of January 31, 2023 and October 31, 2022.

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 and nine months ended July 31, 2022.

No credit-related or noncredit-related impairment losses were recorded for the three months ended January 31, 2023.

Derivative Instruments

HP uses derivatives to offset business exposure to foreign currency and interest rate risk on expected future cash flows and on certain existing assets and liabilities.

As part of its risk management strategy, HP uses derivative instruments, primarily forward contracts, interest rate swaps, total return swaps, treasury rate locks, forward starting swaps and, at times, option contracts to hedge certain foreign currency, interest rate and return on certain investment exposures.

As part of its risk management strategy, HP uses derivative instruments, primarily forward contracts, interest rate swaps, total return swaps, treasury rate locks, forward starting swaps and option contracts to hedge certain foreign currency, interest rate and return on certain investment exposures.

HP may designate its derivative contracts as fair value hedges or cash flow hedges and classifies the cash flows with the activities that correspond to the underlying hedged items.

1 unchanged sentence

HP recognizes all derivative instruments at fair value in the Consolidated Condensed Balance Sheets.

As a result of its use of derivative instruments, HP is exposed to the risk that its counterparties will fail to meet their contractual obligations.

Master netting agreements mitigate credit exposure to counterparties by permitting HP to net amounts due from HP to counterparty against amounts due to HP from the same counterparty under certain conditions.

To further limit credit risk, HP has collateral security agreements that allow HP’s custodian to hold collateral from, or require HP to post collateral to, counterparties when aggregate derivative fair values exceed contractually established thresholds which are

AND SUBSIDIARIES

1 unchanged sentence

Financial Instruments (Continued)

As a result of its use of derivative instruments, HP is exposed to the risk that its counterparties will fail to meet their contractual obligations.

generally based on the credit ratings of HP and its counterparties.

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 $ 79 million and $ 64 million as of July 31, 2022 and as of October 31, 2021, respectively, all of which were fully collateralized within two business days.

The Company includes gross collateral posted and received in other current assets and other current liabilities in the Consolidated Condensed Balance Sheets, respectively.

The fair value of derivatives with credit contingent features in a net liability position was $ 238 million and $ 82 million as of January 31, 2023 and as of October 31, 2022, 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 July 31, 2022 and October 31, 2021.

This credit contingent provision did not affect HP’s financial position or cash flows as of January 31, 2023 and October 31, 2022.

Fair Value Hedges

2 unchanged sentences

Cash Flow Hedges

HP uses forward contracts, treasury rate locks, forward starting swaps and, at times, option contracts designated as cash flow hedges to protect against the foreign currency exchange and interest rate risks inherent in its forecasted net revenue, cost of revenue, operating expenses and debt issuance.

HP uses forward contracts, option contracts, treasury rate locks and forward starting swaps designated as cash flow hedges to protect against the foreign currency exchange and interest rate risks inherent in its forecasted net revenue, cost of revenue, operating expenses and debt issuance.

HP’s foreign currency cash flow hedges mature predominantly within twelve months ;

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 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.

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) income 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 June 2022, a series of forward starting swaps, which were executed in April and May 2022 with a total notional amount of $ 1.5 billion and $ 0.25 billion, respectively, were settled upon the issuance of the senior unsecured notes, resulting in a gain of $ 20 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 March 2022, a series of forward starting swaps with a total notional amount of $ 1.5 billion 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.

Other Derivatives

2 unchanged sentences

For derivative instruments not designated as hedging instruments, HP recognizes changes in fair value of the derivative instrument, as well as the offsetting change in the fair value of the hedged item, in Interest and other, net in the Consolidated Condensed Statements of Earnings in the period of change.

AND SUBSIDIARIES

Notes to Consolidated Condensed Financial Statements (Continued)

Financial Instruments (Continued)

Hedge Effectiveness

1 unchanged sentence

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 and nine months ended July 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 months ended January 31, 2023 and 2022, no portion of the hedging instruments’ gain or loss was excluded from the assessment of effectiveness for fair value and cash flow hedges.

AND SUBSIDIARIES

Notes to Consolidated Condensed Financial Statements (Continued)

Financial Instruments (Continued)

Fair Value of Derivative Instruments in the Consolidated Condensed Balance Sheets

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

As of July 31, 2022 As of October 31, 2021

As of January 31, 2023 As of October 31, 2022

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

4 unchanged sentences

Foreign currency contracts 16,314 230 93 412 69 16,014 820 256 206 72

Interest rate contracts — — — — — 1,500 — — — 8

Total derivatives designated as hedging instruments 17,064 230 93 412 133 16,764 820 256 206 150

4 unchanged sentences

Total derivatives $ 21,781 $ 245 $ 93 $ 427 $ 133 $ 21,440 $ 834 $ 256 $ 224 $ 150

Offsetting of Derivative Instruments

HP recognizes all derivative instruments on a gross basis in the Consolidated Condensed Balance Sheets.

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 July 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:

AND SUBSIDIARIES

1 unchanged sentence

Financial Instruments (Continued)

Offsetting of Derivative Instruments

HP recognizes all derivative instruments on a gross basis in the Consolidated Condensed Balance Sheets.

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, 2023 and October 31, 2022, 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 July 31, 2022

As of January 31, 2023

Derivative assets $ 338 $ — $ 338 $ 288 $ 24 (1) $ 26

8 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 July 31

Interest rate contract Fixed-rate debt Interest and other, net 2022 $ ( 70 ) $ 8 $ ( 8 )

2021 $ ( 55 ) $ 5 $ ( 5 )

Nine months ended July 31

Three months ended January 31

Interest rate contract Fixed-rate debt Interest and other, net 2023 $ ( 181 ) $ 14 $ ( 14 )

3 unchanged sentences

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 July 31 Nine months ended July 31

2022 2021 2022 2021

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

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

Three months ended January 31

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

Foreign currency contracts $ ( 623 ) $ 280

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 income (loss) into earnings

Three months ended July 31 Nine months ended July 31 Three months ended July 31 Nine months ended July 31

other comprehensive (loss) income into earnings

Three months ended January 31 Three months ended January 31

2023 2022 2023 2022

4 unchanged sentences

Total $ 334 $ 44

As of July 31, 2022, HP expects to reclassify an estimated accumulated other comprehensive gain of $ 355 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 a 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 nine months ended July 31, 2022 and 2021 was as follows:

As of January 31, 2023, HP expects to reclassify an estimated accumulated other comprehensive (loss) income of approximately $ 193 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.

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, 2023 and 2022 was as follows:

Gain/(loss) recognized in earnings on derivative instrument

Three months ended July 31 Nine months ended July 31

Three months ended January 31

Location 2023 2022

5 unchanged sentences

Notes Payable and Short-Term Borrowings

As of July 31, 2022 As of October 31, 2021

As of January 31, 2023 As of October 31, 2022

Outstanding Weighted-Average

2 unchanged sentences

Interest Rate

Commercial paper $ — — % $ 400 0.2 %

Current portion of long-term debt $ 171 5.5 % $ 165 5.4 %

Notes payable to banks, lines of credit and other 251 4.2 % 53 0.6 %

$ 705 $ 1,106

Long-Term Debt

July 31, 2022 October 31, 2021

January 31, 2023 October 31, 2022

Dollar Global Notes (1)

$ 1,200 issued at discount to par at a price of 99.863 % at 6.00 %, due September 2041

$ 1,199 $ 1,199

$ 1,150 issued at discount to par at a price of 99.769 % at 2.2 %, due June 2025

5 unchanged sentences

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

$ 900 issued at discount to par at a price of 99.841 % in June 2022 at 4.75 %, due January 2028

$ 1,100 issued at discount to par at a price of 99.725 % in June 2022 at 5.50 %, due January 2033

$ 900 issued at discount to par at a price of 99.841 % at 4.75 %, due January 2028

$ 1,100 issued at discount to par at a price of 99.725 % at 5.50 %, due January 2033

$ 500 issued at par at a price of 100 % at 4.75 %, due March 2029 (3)

10,188 10,683

Other borrowings at 0.51 %- 8.30 %, due in calendar years 2023-2029

6 unchanged sentences

Dollar Global Notes are senior unsecured debt.

(2) HP intends to allocate an amount equal to the net proceeds to finance or refinance, in whole or in part, environmentally and socially responsible eligible projects in the following eight areas:

(2) HP allocated an amount equal to the net proceeds to finance or refinance, in whole or in part, environmentally and socially responsible eligible projects in the following eight areas:

renewable energy;

6 unchanged sentences

and socioeconomic advancement and empowerment.

In June 2022, HP completed its offering of $ 2.0 billion aggregate principal amount of senior unsecured notes, consisting of $ 0.9 billion of 4.75 % notes due January 2028 and $ 1.1 billion of 5.50 % notes due January 2033.

HP incurred issuance costs of $ 17 million.

HP will pay interest semi-annually on each series of the notes on January 15 and July 15, beginning January 15, 2023.

In June 2022, HP terminated a series of forward starting swap agreements with notional amounts totaling $ 1.75 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, together with other available funds, to fund the purchase price of the acquisition of Plantronics, Inc.

(“Poly”), repay Poly’s existing term loan, and pay any related fees and expenses.

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

AND SUBSIDIARIES

Notes to Consolidated Condensed Financial Statements (Continued)

Borrowings (Continued)

$ 17 million.

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

(3) During the quarter ended January 31, 2023, HP repurchased or redeemed and settled $ 495 million of the March 2029 Notes related to the August 2022 Poly acquisition.

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.

1 unchanged sentence

Commercial Paper

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

As of January 31, 2023, HP maintained two commercial paper programs.

program provides for the issuance of U.S.

2 unchanged sentences

dollars, euros or British pounds up to a maximum aggregate principal amount of $ 6.0 billion or the equivalent in those alternative currencies.

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.

The combined aggregate principal amount of commercial paper outstanding under those programs and certain short term borrowings at any one time cannot exceed a $ 6.0 billion authorization by HP’s Board of Directors.

AND SUBSIDIARIES

Notes to Consolidated Condensed Financial Statements (Continued)

Borrowings (Continued)

Credit Facility

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

As of January 31, 2023, 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.

1 unchanged sentence

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

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

On August 23, 2022, HP entered into an amendment to the credit agreement governing the revolving credit facility, pursuant to which the credit agreement has been amended to provide for interest rates at Term SOFR instead of LIBOR.

As of January 31, 2023, HP was in compliance with the covenants in the credit agreement governing the revolving credit facility.

Available Borrowing Resources

As of July 31, 2022, HP had available borrowing resources of $ 539 million from uncommitted lines of credit in addition to the revolving credit facility.

As of January 31, 2023, HP had available borrowing resources of $ 975 million from uncommitted lines of credit in addition to the revolving credit facility.

Stockholders’ Deficit

1 unchanged sentence

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

During the three and nine months ended July 31, 2022, HP executed share repurchases of 29 million shares and 98 million shares and settled total shares for $ 1.0 billion and $ 3.5 billion respectively.

During the three and nine months ended July 31, 2021, HP executed share repurchases of 50 million shares and 163 million, respectively, and settled total shares for $ 1.5 billion and $ 4.5 billion respectively.

Share repurchases executed during the three and nine months ended July 31, 2021 included 1.8 million shares settled in August 2021.

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

As of July 31, 2022, HP had approximately $ 2.9 billion remaining under the share repurchase authorizations approved by HP’s Board of Directors.

Tax effects related to Other Comprehensive Income (Loss)

During the three months ended January 31, 2023, HP executed share repurchases of 3.6 million shares and settled total shares for $ 0.1 billion.

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

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

The shares repurchased during the three months ended January 31, 2023 and 2022 were all open market repurchase transactions.

As of January 31, 2023, HP had approximately $ 2.0 billion remaining under the share repurchase authorizations approved by HP’s Board of Directors.

AND SUBSIDIARIES

1 unchanged sentence

Stockholders' Deficit (Continued)

Three months ended July 31 Nine months ended July 31

2022 2021 2022 2021

Tax effects related to Other Comprehensive Income (Loss)

Three months ended January 31

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

Tax benefit (provision) on unrealized (losses) gains arising during the period $ 1 $ — $ 2 $ ( 1 )

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

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

Tax (provision) benefit on unrealized gains (losses) arising during the period ( 159 ) ( 22 ) ( 305 ) 18

Tax provision (benefit) on (gains) losses reclassified into earnings 99 ( 4 ) 135 ( 25 )

( 60 ) ( 26 ) ( 170 ) ( 7 )

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

Tax provision on gains arising during the period — — ( 6 ) ( 11 )

Tax benefit (provision) on unrealized (losses) gains arising during the period $ 106 $ ( 32 )

Tax provision on gains reclassified into earnings 78 12

Tax provision (benefit) on gains (losses) arising during the period 9 ( 6 )

Tax benefit on amortization of actuarial loss and prior service benefit — ( 1 )

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

( 3 ) ( 4 ) ( 12 ) ( 25 )

Tax effect on change in cumulative translation adjustment — 1

Tax provision on other comprehensive income $ ( 62 ) $ ( 32 ) $ ( 178 ) $ ( 41 )

Tax benefit (provision) on other comprehensive (loss) income $ 192 $ ( 26 )

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

Three months ended July 31 Nine months ended July 31

2022 2021 2022 2021

Other comprehensive income, net of taxes:

Three months ended January 31

Other comprehensive (loss) income, net of taxes:

Change in unrealized components of available-for-sale debt securities:

1 unchanged sentence

Change in unrealized components of cash flow hedges:

Unrealized gains (losses) arising during the period 121 111 877 ( 236 )

(Gains) losses reclassified into earnings ( 228 ) 60 ( 356 ) 237

( 107 ) 171 521 1

Unrealized (losses) gains arising during the period ( 517 ) 267

Gains reclassified into earnings ( 256 ) ( 32 )

Change in unrealized components of defined benefit plans:

Gains arising during the period 10 ( 1 ) 26 29

(Losses) gains arising during the period ( 29 ) 15

Amortization of actuarial loss and prior service benefit (1)

1 unchanged sentence

Change in cumulative translation adjustment 29 ( 9 )

Other comprehensive (losses) income, net of taxes $ ( 110 ) $ 187 $ 497 $ 110

Other comprehensive (loss) income, net of taxes $ ( 769 ) $ 244

(1) These components are included in the computation of net pension and post-retirement benefit (credit) charges in Note 4, “Retirement and Post-Retirement Benefit Plans”.

2 unchanged sentences

Stockholders' Deficit (Continued)

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

Nine months ended July 31, 2022

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

Three months ended January 31, 2023

Net unrealized

gains (losses) on

available-for-sale debt

securities Net unrealized gains (losses) on cash

securities Net unrealized (losses) gains on cash

flow hedges Unrealized

2 unchanged sentences

comprehensive

income (loss)

(loss) income

Balance at beginning of period $ 6 $ 648 $ ( 295 ) $ ( 46 ) $ 313

Other comprehensive (loss) gain before reclassifications ( 5 ) 877 26 ( 54 ) 844

Reclassifications of (gain) loss into earnings — ( 356 ) 11 — ( 345 )

Other comprehensive income (loss) before reclassifications 3 ( 517 ) ( 29 ) 29 ( 514 )

Reclassifications of gains into earnings — ( 256 ) — — ( 256 )

Reclassifications of settlements into earnings — — 1 — 1

6 unchanged sentences

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

Three months ended July 31 Nine months ended July 31

2022 2021 2022 2021

Three months ended January 31

In millions, except per share amounts

13 unchanged sentences

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 July 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 January 31, 2023, 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.

9 unchanged sentences

Some European countries are expected to implement legislation to introduce or extend existing levy schemes to digital devices.

HP, other companies and various industry associations have opposed the extension of levies to the digital environment and certain requirements for

HP, other companies and various industry associations have opposed the extension of levies to the digital environment and certain requirements for business sales exemptions, and have advocated alternative models of compensation to rights holders.

Based on industry opposition to the extension of levies to digital products, HP’s assessments of the merits of various proceedings and HP’s

AND SUBSIDIARIES

1 unchanged sentence

Litigation and Contingencies (Continued)

business sales exemptions, and have advocated alternative models of compensation to rights holders.

Based on industry opposition to the extension of levies to digital products, HP’s assessments of the merits of various proceedings and HP’s estimates of the number of units impacted and the amounts of the levies, HP has accrued amounts that it believes are adequate to address the ongoing disputes.

Hewlett-Packard Company v.

Oracle Corporation .

On June 15, 2011, HP filed suit against Oracle Corporation (“Oracle”) in California Superior Court in Santa Clara County in connection with Oracle’s March 2011 announcement that it was discontinuing software support for HP’s Itanium-based line of mission critical servers.

HP asserted, among other things, that Oracle’s actions breached the contract that was signed by the parties as part of the settlement of the litigation relating to Oracle’s hiring of Mark Hurd.

In the first phase of the bifurcated trial, the court ruled that the contract at issue required Oracle to continue to offer its software products on HP’s Itanium-based servers for as long as HP decided to sell such servers.

In the second phase, the jury returned a verdict in favor of HP, awarding HP approximately $ 3.0 billion in damages, which included approximately $ 1.7 billion for past lost profits and $ 1.3 billion for future lost profits.

The court entered judgment for HP for this amount with interest accruing until the judgment was paid.

Oracle appealed the trial court’s judgment and HP filed a cross appeal challenging the trial court’s denial of prejudgment interest.

The Court of Appeals affirmed both the trial court’s judgment and its denial of prejudgment interest to HP.

Oracle filed a petition with the California Supreme Court for review, which was denied on September 29, 2021.

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 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.

The petition was denied on May 16, 2022.

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

estimates of the number of units impacted and the amounts of the levies, HP has accrued amounts that it believes are adequate to address the ongoing disputes.

Forsyth, et al.

8 unchanged sentences

Because the court granted plaintiffs’ motion for preliminary certification of the putative nationwide ADEA collectives, a third-party administrator notified eligible former employees of their right to opt into the ADEA collective.

This opt-in period closed on February 15, 2022, and the next case management conference is anticipated to set discovery timelines for the remainder of 2022.

This opt-in period closed on February 15, 2022.

Plaintiffs seek monetary damages, punitive damages, and other relief.

9 unchanged sentences

The Customs Department has also filed cross-appeals before the Customs Tribunal.

On January 24, 2013,

AND SUBSIDIARIES

Notes to Consolidated Condensed Financial Statements (Continued)

Litigation and Contingencies (Continued)

the Customs Tribunal ordered HP India to deposit an additional $ 24 million against the products order, which HP India deposited in March 2013.

On January 24, 2013, the Customs Tribunal ordered HP India to deposit an additional $ 24 million against the products order, which HP India deposited in March 2013.

On February 7, 2014, the Customs Tribunal granted HP India’s application for extension of the stay of deposit until disposal of the appeals.

17 unchanged sentences

and 8,284,833.

The accused products are HP commercial and consumer PCs as well as wireless printers that comply with the IEEE 802.11n, 802.11ac, and/or 802.11ax standards.

The accused products are HP commercial and consumer PCs

AND SUBSIDIARIES

Notes to Consolidated Condensed Financial Statements (Continued)

Litigation and Contingencies (Continued)

as well as wireless printers that comply with the IEEE 802.11n, 802.11ac, and/or 802.11ax standards.

Caltech seeks unspecified damages and other relief.

19 unchanged sentences

On September 15, 2021, the court granted HP’s motion.

Plaintiffs are appealing the decision.

Plaintiffs appealed the decision.

An appellate hearing scheduled for December 5, 2022 was cancelled as the parties have reached a settlement in principle.

York County on behalf of the County of York Retirement Fund v.

8 unchanged sentences

Plaintiffs are appealing the decision.

The appellate hearing was held on February 6, 2023.

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 he makes substantially the same factual allegations as in the York County securities complaint,

AND SUBSIDIARIES

Notes to Consolidated Condensed Financial Statements (Continued)

Litigation and Contingencies (Continued)

bringing claims for breach of fiduciary duty and violations of securities laws.

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

4 unchanged sentences

Both derivative actions will remain stayed until any appeal related to the York decision has been exhausted.

AND SUBSIDIARIES

Notes to Consolidated Condensed Financial Statements (Continued)

Litigation and Contingencies (Continued)

Legal Proceedings re Authentication of Supplies .

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.

11 unchanged sentences

The cases are in their early stages.

In late 2022, the New Zealand competition authority opened an investigation regarding whether firmware updates and security measures allegedly restrict competition for cartridges for HP and non-HP branded printers and whether these practices constitute an alleged misuse of market power.

HP has responded to requests for information, and there is no schedule for anticipated next steps.

Autonomy-Related Legal Matters

32 unchanged sentences

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

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Notes to Consolidated Condensed Financial Statements (Continued)

Litigation and Contingencies (Continued)

recover damages or as to how any award of damages will compare with the amount 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.

The amount ultimately awarded, if any, would be recorded in the period received.

2 unchanged sentences

Environmental

HP is, and may become a party to, proceedings brought by U.S.

or state agencies or private third parties under the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”), known as “Superfund,” or state laws similar to CERCLA.

HP is also conducting environmental investigations or remediation at several current or former operating sites and former disposal sites pursuant to administrative orders or consent agreements with environmental agencies.

HP is, and may become a party to, proceedings brought by U.S., state, or other governmental entities or private third parties under federal, state, local, or foreign environmental laws, including the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”), known as “Superfund,” or state laws similar to CERCLA.

HP is also conducting

AND SUBSIDIARIES

Notes to Consolidated Condensed Financial Statements (Continued)

Litigation and Contingencies (Continued)

environmental investigations or remediation at several current or former operating sites and former disposal sites pursuant to administrative orders or consent agreements with environmental agencies.

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Notes to Consolidated Condensed Financial Statements (Continued)

Guarantees, Indemnifications and Warranties

19 unchanged sentences

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

Nine months ended July 31, 2022

Three months ended January 31, 2023

Balance at beginning of period $ 876

3 unchanged sentences

Balance at end of period $ 840

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Notes to Consolidated Condensed Financial Statements (Continued)

Unconditional Purchase Obligations

As of July 31, 2022, HP had unconditional purchase obligations of $ 4.3 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 July 31, 2022, unconditional purchase obligations were as follows:

Fiscal year In millions

Thereafter 13

Total $ 4,336

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

Subsequent Events

On August 29, 2022, we completed the acquisition of 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.

The financial results of Poly will be included in our Consolidated Financial Statements for the year ended October 31, 2022, from the date of the acquisition.

On September 1, 2022, we consummated our offer (the “Exchange Offer”) to exchange approximately $ 0.5 billion of outstanding notes issued by Poly (the “Poly Notes”) for new notes issued by us with the same interest rate, interest payment dates, maturity date and redemption terms as the exchanged Poly Notes.

In conjunction with the Exchange Offer, certain proposed amendments that would eliminate substantially all restrictive covenants and certain events of default and other provisions in the indenture governing Poly Notes were adopted, pursuant to a consent solicitation conducted concurrently with the Exchange Offer.

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