What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2024-12-13 compared with 2023-12-18 · 328 added, 429 removed, 1572 unchanged (33% of the section changed)

18 unchanged sentences

Stockholders’ Deficit

Net Earnings Per Share

Earnings Per Share

Litigation and Contingencies

28 unchanged sentences

Estimated variable consideration is presented within other current liabilities on the consolidated balance sheet and totaled $3.1 billion at October 31, 2024.

Auditing the Company’s measurement of variable consideration is especially challenging because the calculation reflects management’s assumptions about expected future claims activity and changes in those assumptions can have a material effect on the amount of variable consideration recognized.

How We Addressed the Matter in Our Audit Our audit procedures included, among others, evaluating the Company’s key assumptions and judgments, and testing the completeness and accuracy of the underlying data used to determine the estimated variable consideration.

We inspected the underlying agreements to understand the nature of variable consideration offered to customers.

We evaluated management’s estimate by comparing previous estimates of variable consideration to actual payments in subsequent periods.

We developed an expectation of the ending accrual and compared our expectation to the amount recorded by the Company.

Auditing the Company’s measurement of variable consideration is especially challenging because the calculation is complex and reflects management’s assumptions about expected future claims activity and changes in those assumptions can have a material effect on the amount of variable consideration recognized.

How We Addressed the Matter in Our Audit Our audit procedures included, among others, developing an independent estimate of the variable consideration and comparing our estimate to the recorded balance.

We performed this predictive analysis at both an aggregated and disaggregated level.

We also inspected the terms and conditions of the incentive offerings.

In addition, we compared previous estimates of variable consideration to actual payments.

/s/ Ernst & Young LLP

We have served as the Company’s auditor since 2000.

San Jose, California

Houston, Texas

December 12, 2024

8 unchanged sentences

The following material weakness has been identified and included in management’s assessment.

The material weakness resulted from undue reliance on certain software solutions affecting net revenue without effectively designed information technology general controls, specifically around user access and change management.

Information generated from these software solutions is used by management in accounting for net revenue, including estimating variable consideration, and certain of these software solutions are used in the processing of revenue related transactions.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of October 31, 2023 and 2022, the related consolidated statements of earnings, comprehensive income, stockholders' deficit and cash flows for each of the three years in the period ended October 31, 2023, and the related notes and our report dated December 15, 2023 expressed an unqualified opinion thereon.

Management has identified a material weakness related to ineffective design and operation of information technology (“IT”) general controls in the areas of user access, change management and job schedule monitoring IT operations for certain IT applications supporting the company’s internal control over financial reporting.

As a result, the application controls and IT dependent manual controls that rely upon information from the impacted IT applications were also deemed ineffective.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of October 31, 2024 and 2023, the related consolidated statements of earnings, comprehensive income, stockholders’ deficit and cash flows for each of the three years in the period ended October 31, 2024, and the related notes.

This material weakness was considered in determining the nature, timing and extent of audit tests applied in our audit of the 2024 consolidated financial statements, and this report does not affect our report dated December 12, 2024, which expressed an unqualified opinion thereon.

Basis for Opinion

15 unchanged sentences

/s/ Ernst & Young LLP

San Jose, California

Houston, Texas

December 12, 2024

10 unchanged sentences

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.

During the fourth quarter of fiscal year 2023, management identified a material weakness in internal control over financial reporting.

The material weakness resulted from undue reliance on information generated from certain software solutions affecting net revenue without effectively designed information technology general controls, specifically around user access and change management.

This material weakness did not result in any errors.

As previously reported in the Company’s Annual Report on Form 10-K for the fiscal year ended October 31, 2023, we identified a material weakness in internal control over financial reporting.

The material weakness resulted from undue reliance on information generated from certain software solutions affecting net revenue without effectively designed and operating information technology (“IT”) general controls, specifically around user access and change management.

As of October 31, 2024, the Company has concluded that the previously identified material weakness was not remediated and that IT general control deficiencies exist in the areas of user access, change management and job schedule monitoring IT operations for certain IT applications affecting various financial statement line items as well as net revenue.

As a result of the material weakness, the application controls and IT dependent manual controls that rely upon information from affected IT applications were also deemed ineffective.

This material weakness did not result in any material misstatement of our financial statements.

While this material weakness did not result in a material misstatement of our financial statements, this control deficiency was not remediated as of October 31, 2024 and there is a reasonable possibility that it could have resulted in a material misstatement in the Company's annual or interim consolidated financial statements that would not be detected.

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The effectiveness of HP’s internal control over financial reporting as of October 31, 2024 has been audited by Ernst & Young LLP, HP’s independent registered public accounting firm, as stated in their report which appears in Part II, Item 8 of this Annual Report on Form 10-K.

/s/ ENRIQUE LORES /s/ MARIE MYERS

/s/ ENRIQUE LORES /s/ KAREN L.

Enrique Lores

8 unchanged sentences

In millions, except per share amounts

Net revenue $ 53,718 $ 62,910 $ 63,460

Costs and expenses:

Cost of revenue 42,210 50,647 50,053

$ 50,453 $ 50,660 $ 60,041

Services 3,106 3,058 2,869

Total net revenue 53,559 53,718 62,910

Cost of net revenue:

39,952 40,484 48,881

Services 1,789 1,726 1,766

Total cost of net revenue 41,741 42,210 50,647

Gross margin 11,818 11,508 12,263

Research and development 1,640 1,578 1,653

8 unchanged sentences

Earnings before taxes 3,279 2,937 4,324

Benefit from (provision for) taxes

(Provision for) benefit from taxes

( 504 ) 326 ( 1,192 )

12 unchanged sentences

Net earnings $ 2,775 $ 3,263 $ 3,132

Other comprehensive income (loss) before taxes:

Other comprehensive (loss) income before taxes:

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

1 unchanged sentence

Change in unrealized components of cash flow hedges:

Unrealized (losses) gains arising during the period

Unrealized gains (losses) arising during the period

51 ( 427 ) 1,541

(Gains) losses reclassified into earnings ( 84 ) ( 779 ) 243

Gains reclassified into earnings

( 274 ) ( 84 ) ( 779 )

( 223 ) ( 511 ) 762

Change in unrealized components of defined benefit plans:

(Losses) gains arising during the period

Losses arising during the period

( 76 ) ( 141 ) ( 54 )

5 unchanged sentences

( 257 ) ( 627 ) 639

Benefit (provision for) from taxes

Benefit from (provision for) taxes

46 119 ( 109 )

29 unchanged sentences

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

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

939 and 989 shares issued and outstanding as of October 31, 2024, and 2023, respectively)

Additional paid-in capital 1,778 1,505

Accumulated deficit ( 2,676 ) ( 2,361 )

Accumulated other comprehensive (loss) income ( 223 ) 285

Accumulated other comprehensive loss ( 434 ) ( 223 )

Total stockholders’ deficit ( 1,323 ) ( 1,069 )

12 unchanged sentences

Deferred taxes on earnings ( 122 ) ( 923 ) 577

Defined benefit plan settlement gains

Other, net ( 38 ) ( 10 ) 475

3 unchanged sentences

Accounts payable 2,840 ( 1,240 ) ( 909 )

Net investment in leases ( 110 ) ( 155 ) ( 111 )

Net investment in leases from integrated financing

( 165 ) ( 110 ) ( 155 )

Taxes on earnings ( 24 ) 198 ( 134 )

3 unchanged sentences

Cash flows from investing activities:

Investment in property, plant and equipment ( 609 ) ( 791 ) ( 582 )

Proceeds from sale of property, plant and equipment 16 26 —

Investment in property, plant and equipment, net

( 592 ) ( 593 ) ( 765 )

Purchases of available-for-sale securities and other investments ( 4 ) ( 11 ) ( 52 )

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Cash flows from financing activities:

(Payments of) Proceeds from short-term borrowings with original maturities less than 90 days, net ( 10 ) ( 400 ) 400

Payments of short-term borrowings with original maturities less than 90 days, net

— ( 10 ) ( 400 )

Proceeds from debt, net of issuance costs 380 255 4,175

Payment of debt ( 1,700 ) ( 693 ) ( 1,245 )

Payment of debt and other associated costs

( 213 ) ( 1,700 ) ( 693 )

Stock-based award activities and others ( 74 ) ( 99 ) ( 95 )

1 unchanged sentence

Cash dividends paid ( 1,075 ) ( 1,037 ) ( 1,037 )

Collateral withdrawn for derivative instruments ( 200 ) 200 —

Collateral (returned) withdrawn for derivative instruments

— ( 200 ) 200

Settlement of cash flow hedges — ( 3 ) 79

16 unchanged sentences

In millions, except number of shares in thousands

Balance October 31, 2020

Balance as of October 31, 2021

1,092,205 $ 11 $ 1,060 $ ( 2,470 ) $ ( 245 ) $ ( 1,644 )

7 unchanged sentences

Stock-based compensation expense 343 343

Balance October 31, 2021

Business acquisitions 9 9

Balance as of October 31, 2022

979,869 10 1,172 ( 4,492 ) 285 ( 3,025 )

Net earnings 3,263 3,263

Other comprehensive income, net of taxes 530 530

Other comprehensive loss, net of taxes

( 508 ) ( 508 )

Comprehensive income 2,755

4 unchanged sentences

Stock-based compensation expense 438 438

Business acquisitions 9 9

Balance October 31, 2022

Balance as of October 31, 2023

988,782 10 1,505 ( 2,361 ) ( 223 ) ( 1,069 )

8 unchanged sentences

Stock-based compensation expense 452 452

Balance October 31, 2023

Balance as of October 31, 2024

938,989 $ 9 $ 1,778 $ ( 2,676 ) $ ( 434 ) $ ( 1,323 )

8 unchanged sentences

All intercompany balances and transactions have been eliminated.

Reclassifications

HP has reclassified certain prior-year amounts to conform to the current-year presentation.

Use of Estimates

12 unchanged sentences

HP includes gains or losses from foreign currency remeasurement in Interest and other, net in the Consolidated Statements of Earnings.

Certain foreign subsidiaries designate the local currency as their functional currency, and HP records the translation of their assets and liabilities into U.S.

Certain foreign subsidiaries designate the local currency as the functional currency, and HP records the translation of their assets and liabilities into U.S.

dollars at the balance sheet dates as translation adjustments and includes them as a component of Accumulated other comprehensive loss.

Recently Adopted Accounting Pronouncements

In November 2021, the Financial Accounting Standards Board (“FASB”) issued guidance that enhances the transparency of government assistance received and accounted for by applying a grant or contribution model by analogy.

This guidance requires annual disclosure of government assistance including the types of assistance received, an entity’s accounting for the assistance, the effect of the assistance on the entity’s financial statements and significant terms and conditions of such assistance.

HP adopted this guidance as of and for the fiscal year ended October 31, 2023 using a prospective approach.

Adoption of this guidance did not have a material impact on our consolidated financial statement disclosures.

In September 2022, the Financial Accounting Standards Board (“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 are required to disclose information about those programs to allow users of financial statements to understand the nature, activity during the period, changes from period to period, and potential magnitude.

HP adopted this guidance in the first quarter of fiscal year 2024, except for the disclosure on roll forward information which will be adopted in fiscal year 2025, in line with the effective adoption dates prescribed by the FASB.

See Note 7, “Supplementary Financial Information,” for additional disclosure related to HP’s supplier finance programs.

Recently Issued 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 will adopt this guidance in the first quarter of fiscal year 2024, except for the disclosure on roll forward information which will be adopted in the fiscal year 2025, in line with the effective adoption dates prescribed by the FASB.

The adoption of this new guidance will result in increased disclosures in the notes to our Consolidated Financial Statements.

In November 2024, the FASB issued guidance that requires disaggregation of specific expense categories in disclosures within the footnotes to the financial statements on an annual and interim basis.

HP is required to adopt this guidance for its annual period ending October 31, 2028 and all interim periods thereafter on a prospective basis.

Early adoption is permitted.

HP is currently evaluating the impact of this guidance on its disclosures.

In December 2023, the FASB issued guidance that enhances the transparency of income tax disclosures by expanding annual disclosure requirements related to the rate reconciliation and income taxes paid.

HP is required to adopt this guidance for its annual period ending October 31, 2026.

Early adoption is permitted.

HP is currently evaluating the impact of this guidance on its disclosures.

In November 2023, the FASB issued guidance that updates reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses and information used to assess segment performance on an annual and interim basis.

HP is required to adopt this guidance for its annual period ending October 31, 2025 and all interim periods thereafter.

Early adoption is permitted.

HP is currently evaluating the impact of this guidance on its disclosures.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Revenue Recognition

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HP follows the five-step model for revenue recognition as summarized below:

Identify the contract with a customer - A contract with customer exists when (i) it is approved and signed by all parties,

(ii) each party’s rights and obligations can be identified, (iii) payment terms are defined, (iv) it has commercial substance and (v) the customer has the ability and intent to pay.

Identify the contract with a customer - A contract with customer exists when (i) it is approved and signed by all parties, (ii) each party’s rights and obligations can be identified, (iii) payment terms are defined, (iv) it has commercial substance and (v) the customer has the ability and intent to pay.

HP evaluates customers’ ability to pay based on various factors like historical payment experience, financial metrics and customer credit scores.

While the majority of our sales contracts contain standard terms and conditions, there are certain contracts with non-standard terms and conditions.

Identify the performance obligations in the contract - HP evaluates each performance obligation in an arrangement to

determine whether it is distinct, such as hardware and/or service.

Identify the performance obligations in the contract - HP evaluates each performance obligation in an arrangement to determine whether it is distinct, such as hardware and/or service.

A performance obligation constitutes distinct goods or services when the customer can benefit from such goods or services either on its own or together with other resources that are readily available to the customer and the performance obligation is distinct within the context of the contract.

Determine the transaction price - Transaction price is the amount of consideration to which HP expects to be entitled in

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Notes to Consolidated Financial Statements

exchange for transferring goods or services to the customer.

Determine the transaction price - Transaction price is the amount of consideration to which HP expects to be entitled in exchange for transferring goods or services to the customer.

If the transaction price includes a variable amount, HP estimates the amount it expects to be entitled to using either the expected value or the most likely amount method.

HP reduces the transaction price at the time of revenue recognition for customer and distributor programs and incentive

offerings, rebates, promotions, other volume-based incentives and expected returns.

HP reduces the transaction price at the time of revenue recognition for customer and distributor programs and incentive offerings, rebates, promotions, other volume-based incentives and expected returns.

HP uses estimates to determine the expected variable consideration for such programs based on factors like historical experience, expected consumer behavior and market conditions.

HP has elected the practical expedient of not accounting for significant financing components if the period between

revenue recognition and when the customer pays for the product or service is one year or less.

Allocate the transaction price to performance obligations in the contract - When a sales arrangement contains multiple

performance obligations, such as hardware and/or services, HP allocates revenue to each performance obligation in proportion to their selling price.

HP has elected the practical expedient of not accounting for significant financing components if the period between revenue recognition and when the customer pays for the product or service is one year or less.

Allocate the transaction price to performance obligations in the contract - When a sales arrangement contains multiple performance obligations, such as hardware and/or services, HP allocates revenue to each performance obligation in proportion to their selling price.

The selling price for each performance obligation is based on its Standalone Selling Price (“SSP”).

1 unchanged sentence

When observable price is not available, HP establishes SSP maximizing the use of observable inputs based on management judgment while considering internal factors such as historical discounting trends for products and services, pricing practices and other observable factors.

Recognize revenue when (or as) the performance obligation is satisfied - Revenue is recognized when, or as, a

performance obligation is satisfied by transferring control of a promised good or service to a customer.

Recognize revenue when (or as) the performance obligation is satisfied - Revenue is recognized when, or as, a performance obligation is satisfied by transferring control of a promised good or service to a customer.

HP generally invoices the customer upon delivery of the goods or services and the payments are due as per contract terms.

1 unchanged sentence

HP reports revenue net of any taxes collected from customers and remitted to government authorities, and the collected taxes are recorded as other current liabilities until remitted to the relevant government authority.

HP includes costs related to shipping and handling in Cost of revenue.

HP includes costs related to shipping and handling in Cost of net revenue.

HP records revenue on a gross basis when HP is a principal in the transaction and on a net basis when HP is acting as an agent between the customer and the vendor.

3 unchanged sentences

HP recognizes revenue from fixed-price support, maintenance and other service contracts over time depicting the pattern of service delivery and recognizes the costs associated with these contracts as incurred.

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Notes to Consolidated Financial Statements

Contract Assets and Liabilities

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See Note 7, “Supplementary Financial Information” for details on net revenue by region, cost to obtain a contract and fulfillment cost, contract liabilities and value of remaining performance obligations.

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Notes to Consolidated Financial Statements

At the inception of a contract, HP assesses whether the contract is, or contains, a lease.

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See Note 4, “Retirement and Post-Retirement Benefit Plans” for a full description of these plans and the accounting and funding policies.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Advertising Cost

16 unchanged sentences

The provision for income taxes includes the effects of adjustments for uncertain tax positions, as well as any related interest and penalties.

HP is subject to the Global Intangible Low-Taxed Income (“GILTI”) tax in the U.S.

and elects to recognize these taxes as a current expense in the period incurred.

Accounts Receivable

4 unchanged sentences

HP assesses collectability by pooling receivables where similar risk characteristics exist.

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Notes to Consolidated Financial Statements

customers, length of time receivables are past due, trends in the weighted-average risk rating for the portfolio, macroeconomic conditions, information derived from competitive benchmarking, significant one-time events, and historical experience.

HP maintains an allowance for credit losses for all other customers based on a variety of factors, including the use of third-party credit risk models that generate quantitative measures of default probabilities based on market factors, financial condition of customers, length of time receivables are past due, trends in the weighted-average risk rating for the portfolio, macroeconomic conditions, information derived from competitive benchmarking, significant one-time events, and historical experience.

The past due or delinquency status of a receivable is based on the contractual payment terms of the receivable.

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.

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

These financing arrangements, which in certain cases provide for partial recourse, result in the transfer of HP’s trade receivables to a third-party.

3 unchanged sentences

Financial instruments that potentially subject HP to significant concentrations of credit risk consist principally of cash and cash equivalents, investments, receivables from trade customers and contract manufacturers and derivatives.

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Notes to Consolidated Financial Statements

HP maintains cash and cash equivalents, investments, derivatives and certain other financial instruments with various financial institutions.

8 unchanged sentences

The ten largest distributor and reseller receivable balances, which were concentrated primarily in North America and Europe, collectively represented approximately 38 % and 41 % of gross accounts receivable as of October 31, 2024 and 2023, respectively.

One customer TD Synnex Corp accounted for 13.2 % of gross accounts receivable as of October 31, 2023.

Two customers, TD Synnex Corp and Ingram Micro Inc., accounted for 13.8 % and 10.4 %, respectively, of gross accounts receivable as of October 31, 2022.

One customer, TD Synnex Corp, accounted for 9.7 % of gross accounts receivable as of October 31, 2024 and 13.2 % of gross accounts receivable as of October 31, 2023.

Credit risk with respect to other accounts receivable is generally diversified due to HP’s large customer base and their dispersion across many different industries and geographic markets.

2 unchanged sentences

HP may purchase product components from suppliers and sell those components to its outsourced manufacturers thereby creating receivable balances from the outsourced manufacturers.

The three largest outsourced manufacturer receivable balances collectively represented 58 % and 89 % of HP’s supplier receivables of $ 0.3 billion as of both October 31, 2023 and 2022, respectively.

The three largest outsourced manufacturer receivable balances collectively represented 89 % and 58 % of HP’s supplier receivables of $ 0.8 billion and $ 0.3 billion as of October 31, 2024 and 2023, respectively.

HP includes the supplier receivables in Other current assets in the Consolidated Balance Sheets on a gross basis.

HP’s credit risk associated with these receivables is mitigated wholly or in part, by the amount HP owes to these outsourced manufacturers, as HP generally has the legal right to offset its payables to the outsourced manufacturers against these receivables.

HP does not reflect the sale of these components in net revenue and does not recognize any profit on these component sales until the related products are sold by HP, at which time any profit is recognized as a reduction to cost of revenue.

HP obtains a significant number of components from single source suppliers like Canon, due to technology, availability, price, quality or other considerations.

10 unchanged sentences

HP depreciates equipment held for lease over the initial term of the lease to the equipment’s estimated residual value.

On retirement or disposition, the

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Notes to Consolidated Financial Statements

asset cost and related accumulated depreciation are removed from the Consolidated Balance Sheets with any gain or loss recognized in the Consolidated Statements of Earnings.

On retirement or disposition, the asset cost and related accumulated depreciation are removed from the Consolidated Balance Sheets with any gain or loss recognized in the Consolidated Statements of Earnings.

Internal Use Software and Cloud Computing Arrangements

3 unchanged sentences

Once the software is substantially complete and ready for its intended use, capitalized development costs are amortized straight-line over the estimated useful life of the software, generally not to exceed five years .

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

HP also enters into certain cloud-based software hosting arrangements that are accounted for as service contracts.

3 unchanged sentences

HP also applies the same impairment model to both internal-use software and capitalized implementation costs in a software hosting arrangement that is in the nature of a service contract.

Business Combinations

HP includes the results of operations of the acquired business in HP’s consolidated results prospectively from the acquisition date.

HP allocates the purchase consideration to the assets acquired, liabilities assumed, and non-controlling interests in the acquired entity generally based on their fair values at the acquisition date.

The excess of the fair value of purchase consideration over the fair value of these assets acquired, liabilities assumed and non-controlling interests in the acquired entity is recorded as goodwill.

The primary items that generate goodwill include the value of the synergies between the acquired company and HP, and the value of the acquired assembled workforce, neither of which qualify for recognition as an intangible asset.

Acquisition and divestiture charges are recognized separately from the business combination and are expensed as incurred.

These charges primarily include, direct third-party professional and legal fees, integration and divestiture-related costs, as well as non-cash adjustments to the fair value adjustments of certain acquired assets such as inventory and certain compensation charges related to cash settlement of restricted stock units and performance-based restricted stock units of acquired companies .

HP reviews goodwill for impairment annually during its fourth quarter and whenever events or changes in circumstances indicate the carrying amount of goodwill may not be recoverable.

1 unchanged sentence

Based on the qualitative assessment, if HP determines that the fair value of a reporting unit is more likely than not (i.e., a likelihood of more than 50 percent) to be less than its carrying amount, a quantitative impairment test will be performed.

In the quantitative impairment test, HP compares the fair value of each reporting unit to its carrying amount with the fair values derived most significantly from the income approach, and to a lesser extent, the market approach.

If a quantitative impairment test is performed, HP compares the fair value of each reporting unit to its carrying amount.

The fair values are derived most significantly from the income approach, with lesser weight attributed to the market approach.

Under the income approach, HP estimates the fair value of a reporting unit based on the present value of estimated future cash flows.

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When market comparables are not meaningful or not available, HP estimates the fair value of a reporting unit using only the income approach.

In order to assess the reasonableness of the estimated fair value of HP’s reporting units, HP compares the aggregate reporting unit fair value to HP’s market capitalization on an overall basis and calculates an implied control premium (the excess of the sum of the reporting units’ fair value over HP’s market capitalization on an overall basis).

HP evaluates the control premium by comparing it to observable control premiums from recent comparable transactions.

If the implied control premium is not reasonable compared to these recent transactions, HP re-evaluates its reporting unit fair values, which may result in an adjustment to the discount rate and/or other assumptions.

This re-evaluation could result in a change to the estimated fair value for certain or all reporting units.

If the fair value of a reporting unit exceeds the carrying amount of the net assets assigned to that reporting unit, goodwill is not impaired.

3 unchanged sentences

Debt and marketable equity securities are generally considered available-for-sale.

All highly liquid investments

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

with maturities of three months or less at the date of purchase are classified as cash equivalents.

All highly liquid investments with maturities of three months or less at the date of purchase are classified as cash equivalents.

Marketable debt securities with maturities of twelve months or less are classified as short-term investments and marketable debt securities with maturities greater than twelve months are classified based on their availability for use in current operations.

9 unchanged sentences

HP uses derivative instruments, primarily forward contracts, option contracts, interest rate swaps, total return swaps, treasury rate locks and forward starting swaps to hedge certain foreign currency, interest rate and, return on certain investment exposures.

HP also may use other derivative instruments not designated as hedges, such as forwards used to hedge foreign currency balance sheet exposures.

HP also may use other derivative instruments not designated as hedges, such as forwards used to hedge foreign currency balance sheet

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

HP does not use derivative instruments for speculative purposes.

See Note 10, “Financial Instruments” for a full description of HP’s derivative instrument activities and related accounting policies.

Loss Contingencies

Legal Contingencies

HP is involved in various lawsuits, claims, investigations and proceedings that arise in the ordinary course of business.

8 unchanged sentences

The segments are based on this organizational structure and information reviewed by HP’s CODM to evaluate segment results.

The CODM uses several metrics to evaluate the performance of the overall business, including earnings from operations, and uses these results to allocate resources to each of the segments.

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

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

• Commercial Printing consists of office printing solutions, graphics solutions and 3D printing and personalization, 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 certain business incubation and investment projects.

The CODM uses earnings from operations to evaluate the performance of the overall business and to allocate resources to each of the segments.

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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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, amortization of intangible assets and Russia exit charges.

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Notes to Consolidated Financial Statements (Continued)

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

25 unchanged sentences

Total earnings before taxes $ 3,279 $ 2,937 $ 4,324

Effective the 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 .

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Notes to Consolidated Financial Statements (Continued)

Effective at the beginning of its first quarter of fiscal year 2024, HP realigned its business unit financial reporting more closely with its customer market segmentation.

The realignment resulted in the transfer of LaserJet printers net revenues from Consumer Printing to Commercial Printing.

HP reflected this change to its business unit information in prior reporting periods on an as-if basis which resulted in the reclassification of net revenues from Consumer Printing to Commercial Printing.

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

Segment Assets

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Net revenue by country is based upon the sales location that predominately represents the customer location.

For each of the fiscal years of 2023, 2022 and 2021, other than the United States, no country represented more than 10% of HP net revenue.

Other than the United States, no country represented more than 10% of HP net revenue in any fiscal year presented.

Net revenue by country was as follows:

11 unchanged sentences

Total property, plant and equipment, net $ 2,914 $ 2,827

No single country other than those represented above exceeds 10% or more of HP’s total net property, plant and equipment in any fiscal year presented.

No single country other than those represented above exceeded 10% or more of HP’s total net property, plant and equipment in any fiscal year presented.

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

(2) Includes reclassification of liability related to the Enhanced Early Retirement (“EER”) plan of $ 139 for certain healthcare and medical savings account benefits to pension and post-retirement plans.

(2) Includes reclassification of liability related to the EER plan of $ 139 for certain healthcare and medical savings account benefits to pension and post-retirement plans.

See Note 4 “Retirement and Post-Retirement Benefit Plans” for further information .

Fiscal 2023 Plan

On November 18, 2022, HP’s Board of Directors approved the Future Ready Plan (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.

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

HP expects workforce reductions of approximately 7,000 employees.

HP estimates that it will incur pre-tax charges of approximately $ 1.0 billion of which approximately $ 0.7 billion primarily in labor costs related to workforce reductions and the remaining costs will relate to non-labor actions and other charges.

8 unchanged sentences

Pension Plan (“Pension Plan”) is a frozen plan in the United States.

HP reduces the benefit payable to certain U.S.

employees under the Pension Plan for service before 1993, if any, by any amounts due to the employee under HP’s frozen defined contribution Deferred Profit-Sharing Plan (“DPSP”).

At October 31, 2023 and 2022,

AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

the fair value of plan assets of the DPSP was $ 311 million and $ 366 million, respectively.

HP reduces the benefit payable to certain U.S.

employees under the Pension Plan for service before 1993, if any, by any amounts due to the employee under HP’s frozen defined contribution Deferred Profit-Sharing Plan (“DPSP”).

As of October 31, 2024 and 2023, the fair value of HP’s DPSP plan assets was $ 297 million and $ 311 million, respectively.

The DPSP obligations are equal to the plan assets and are recognized as an offset to the Pension Plan when HP calculates its defined benefit pension cost and obligations.

13 unchanged sentences

HP offers various defined contribution plans for U.S.

Total defined contribution expense was $ 131 million in fiscal year 2023, $ 119 million in fiscal year 2022 and $ 112 million in fiscal year 2021.

Total defined contribution expense was $ 133 million, $ 131 million, and $ 119 million in fiscal year 2024, 2023, and 2022, respectively.

employees are automatically enrolled in the HP Inc.

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Prior service cost (credit) — — — 6 5 5 ( 10 ) ( 11 ) ( 11 )

Net periodic benefit (credit) cost ( 23 ) ( 132 ) ( 144 ) 36 71 93 ( 25 ) ( 26 ) ( 41 )

Settlement (gain) loss — — ( 37 ) — — 1 — — —

Net periodic benefit cost (credit)

10 ( 23 ) ( 132 ) 37 36 71 ( 24 ) ( 25 ) ( 26 )

Settlement loss

— — — 2 — — — — —

Special termination benefit cost — 105 — — — — — 34 —

Total periodic benefit (credit) cost $ 82 $ ( 132 ) $ ( 181 ) $ 36 $ 71 $ 94 $ 9 $ ( 26 ) $ ( 41 )

The components of net periodic benefit (credit) cost other than the service cost component are included in Interest and other, net in our Consolidated Statements of Earnings.

Total periodic benefit cost (credit)

$ 10 $ 82 $ ( 132 ) $ 39 $ 36 $ 71 $ ( 24 ) $ 9 $ ( 26 )

The components of net periodic benefit (credit) cost other than the service cost component are included in Interest and other, net in the Consolidated Statements of Earnings.

The weighted-average assumptions used to calculate the total periodic benefit (credit) cost were as follows:

9 unchanged sentences

Expected long-term return on plan assets 6.6 % 6.4 % 5.1 % 5.3 % 5.4 % 4.3 % 5.2 % 3.3 % 2.0 %

Guaranteed interest crediting rate

Interest crediting rate

5.5 % 5.0 % 5.0 % 2.6 % 2.6 % 2.6 % 5.4 % 4.2 % 2.9 %

13 unchanged sentences

Settlement ( 1 ) ( 3 ) ( 28 ) ( 33 ) — —

— — — — ( 82 ) —

Currency impact — — 27 62 — —

2 unchanged sentences

Projected benefit obligation — beginning of year $ 3,854 $ 3,969 $ 1,185 $ 1,145 $ 299 $ 274

Acquisition of plan — — — 11 — —

Service cost — — 37 39 1 1

1 unchanged sentence

Participant contributions — — 17 17 28 32

Actuarial gain ( 160 ) ( 1,724 ) ( 71 ) ( 420 ) ( 3 ) ( 61 )

Actuarial loss (gain)

395 ( 160 ) 116 ( 71 ) ( 8 ) ( 3 )

Benefits paid ( 258 ) ( 274 ) ( 54 ) ( 38 ) ( 48 ) ( 54 )

Plan amendments — — — 4 — —

Curtailment — — — — — —

Settlement ( 1 ) ( 3 ) ( 28 ) ( 33 ) — —

7 unchanged sentences

The cumulative net actuarial losses for our defined pension plans and retiree welfare plans increased year over year.

The increase in losses is primarily due to lower than expected returns on assets and plan experience.

These loss increases were partially offset by gains due to increases in discount rates and lump sum interest rates and other assumption changes.

The weighted-average assumptions used to calculate the projected benefit obligations for the fiscal years ended October 31, 2023 and 2022 were as follows:

These loss increases were primarily due to decreases in discount rates and other assumption changes.

The increase in losses was partially offset due to higher than expected return on assets.

The weighted-average assumptions used to calculate the projected benefit obligations were as follows:

For the fiscal years ended October 31

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Expected increase in compensation levels 2.0 % 2.0 % 2.7 % 3.0 % — % — %

Guaranteed interest crediting rate 5.5 % 5.0 % 2.6 % 2.6 % 5.4 % 4.2 %

The net amounts of non-current assets and current and non-current liabilities for HP’s defined benefit and post-retirement benefit plans recognized on HP’s Consolidated Balance Sheet were as follows:

Interest crediting rate

5.2 % 5.5 % 2.6 % 2.6 % 4.7 % 5.4 %

The net assets and liabilities for HP’s defined benefit and post-retirement benefit plans recognized on HP’s Consolidated Balance Sheet were as follows:

As of October 31

140 unchanged sentences

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

defined benefit pension plan was amended to provide that the EER benefit will be paid from the plan for eligible electing EER participants.

The retirement incentive benefit is 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.

defined benefit pension plan was amended to provide that the EER benefit was to be paid from the plan for eligible electing EER participants.

The retirement incentive benefit was 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.

As a result of this retirement incentive, HP recognized a special termination benefit (“STB”) expense of $ 105 million for the year ended October 31, 2023 as a restructuring charge.

1 unchanged sentence

All employees participating in the EER program were offered the opportunity to continue health care coverage at the active employee contribution rates for up to 36 months following retirement, but not beyond age 65 when Medicare is available.

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

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

HP recognized an additional STB expense of $ 34 million as restructuring and other charges for the year ended October 31, 2023 for the health care incentives.

Future Contributions and Funding Policy

In fiscal year 2024, HP expects to contribute approximately $ 45 million to its non-U.S.

pension plans, $ 31 million to cover benefit payments to U.S.

non-qualified plan participants and $ 3 million to cover benefit claims for HP’s post-retirement benefit plans.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

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.

Future Contributions and Funding Policy

Our policy is to fund our pension plans so that we meet at least the minimum contribution required by local government, funding and taxing authorities.

In fiscal year 2025, we expect to contribute approximately $ 36 million to non-U.S.

pension plans, $ 30 million to cover benefit payments to U.S.

non-qualified plan participants and $ 4 million to cover benefit claims for our post-retirement benefit plans.

Estimated Future Benefits Payments

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Stock-based compensation expense, net of tax $ 375 $ 366 $ 284

Cash received from option exercises under the HP Inc 2004 Stock Incentive Plan, as amended and restated, and ESPP purchases under the HP Inc.

2011 Employee Stock Purchase Plan (the “2011 ESPP”) and HP Inc.

2021 Employee Stock Purchase Plan (the “2021 ESPP”) was $ 51 million in fiscal year 2023, $ 53 million in fiscal year 2022 and $ 55 million in fiscal year 2021.

Cash received from option exercises under the HP Inc 2004 Stock Incentive Plan (the “2004 SIP”) and the HP Inc.

2021 Employee Stock Purchase Plan (the “2021 ESPP”) was $ 72 million, $ 51 million, and $ 53 million in fiscal year 2024, 2023, and 2022, respectively.

The benefit realized for the tax deduction from option exercises in fiscal years 2024, 2023 and 2022 was $ 1 million, $ 2 million and $ 4 million, respectively.

4 unchanged sentences

The aggregate number of shares of HP’s stock authorized for issuance under the principal equity plan is 668.8 million.

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Notes to Consolidated Financial Statements (Continued)

Restricted stock awards are non-vested stock awards that may include grants of restricted stock or restricted stock units.

13 unchanged sentences

Stock options generally vest over three to four years from the date of grant.

The exercise price of a stock option is equal to the closing price of HP’s stock on the

AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

option grant date.

The exercise price of a stock option is equal to the closing price of HP’s stock on the option grant date.

The majority of stock options issued by HP contain only service vesting conditions.

HP grants performance-contingent stock options that vest only on the satisfaction of both service and market conditions prior to the expiration of the awards.

No stock option awards were granted during the fiscal year 2024.

The expenses associated with stock options were not material for any of the periods presented.

As of October 31, 2024, the total unrecognized pre-tax stock-based compensation expense related to stock options was $ 2 million, which is expected to be recognized over a weighted-average vesting period of 0.9 years.

RSU and stock option grants provide for accelerated vesting in certain circumstances as defined in the plans and related grant agreements, including termination in connection with a change in control.

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The total grant date fair value of restricted stock units vested in fiscal years 2024, 2023 and 2022 was $ 471 million, $ 442 million and $ 314 million, respectively.

As of October 31, 2023, total unrecognized pre-tax stock-based compensation expense related to non-vested restricted stock units was $ 403 million, which is expected to be recognized over the remaining weighted-average vesting period of 1.4 years .

Stock Options

HP utilizes the Black-Scholes-Merton option pricing formula to estimate the fair value of stock options subject to service-based vesting conditions.

HP estimates the fair value of stock options subject to performance-contingent vesting conditions using a combination of a Monte Carlo simulation model and a lattice model as these awards contain market conditions.

The weighted-average fair value and the assumptions used to measure fair value were as follows:

As of October 31,2024, total unrecognized pre-tax stock-based compensation expense related to non-

AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

For the fiscal years ended October 31

2023 2022 2021

Weighted-average fair value (1)

Expected volatility (2)

36.9 % 34.7 % 35.9 %

Risk-free interest rate (3)

3.4 % 1.5 % 1.0 %

Expected dividend yield (4)

3.5 % 2.7 % 3.2 %

Expected term in years (5)

(1) The weighted-average fair value was based on stock options granted during the period.

(2) Expected volatility was estimated based on a blended volatility ( 50 % historical volatility and 50 % implied volatility from traded options on HP’s common stock).

(3) The risk-free interest rate was estimated based on the yield on U.S.

Treasury zero-coupon issues.

(4) The expected dividend yield represents a constant dividend yield applied for the duration of the expected term of the award.

(5) For awards subject to service-based vesting, the expected term was estimated using a simplified method;

and for performance-contingent awards, the expected term represents an output from the lattice model .

A summary of stock options activity is as follows:

As of October 31

2023 2022 2021

Shares Weighted-

Price Weighted-

Term Aggregate

Value Shares Weighted-

Price Weighted-

Term Aggregate

Value Shares Weighted-

Price Weighted-

Term Aggregate

thousands In years In

Outstanding at beginning of year 6,095 $ 26 6,367 $ 21 5,637 $ 17

Granted 2,180 $ 28 1,867 $ 37 2,691 $ 24

Exercised ( 1,071 ) $ 17 ( 1,364 ) $ 18 ( 1,843 ) $ 15

Forfeited/cancelled/expired ( 325 ) $ 33 ( 775 ) $ 26 ( 118 ) $ 18

Outstanding at end of year 6,879 $ 27 7.4 $ 19 6,095 $ 26 7.2 $ 34 6,367 $ 21 7.4 $ 68

Vested and expected to vest 6,527 $ 27 7.4 $ 19 5,903 $ 25 7.2 $ 34 6,367 $ 21 7.4 $ 68

Exercisable 2,636 $ 20 5.8 $ 17 2,749 $ 18 6.0 $ 26 2,392 $ 16 5.3 $ 34

The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value that option holders would have realized had all option holders exercised their options on the last trading day of fiscal years 2023, 2022 and 2021.

The aggregate intrinsic value is the difference between HP’s closing stock price on the last trading day of the fiscal year and the exercise price, multiplied by the number of in-the-money options.

The total intrinsic value of options exercised in fiscal years 2023, 2022 and 2021 was $ 13 millions, $ 25 million and $ 18 million, respectively.

The total grant date fair value of options vested in fiscal years 2023, 2022 and 2021 was $ 10 million, $ 9 million and $ 3 million, respectively.

As of October 31, 2023, total unrecognized pre-tax stock-based compensation expense related to stock options was $ 10 million, which is expected to be recognized over a weighted-average vesting period of 1.4 years.

vested restricted stock units was $ 414 million, which is expected to be recognized over the remaining weighted-average vesting period of 1.4 years .

Employee Stock Purchase Plan

3 unchanged sentences

The aggregate number of shares of HP’s stock authorized for issuance under the 2021 ESPP was 50 million.

The 2021 ESPP came into effect on May 1, 2021 upon expiry of the 2011 ESPP.

The 2021 ESPP terms are similar to the previous ESPP.

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Notes to Consolidated Financial Statements (Continued)

Shares Reserved

37 unchanged sentences

15.4 % ( 11.1 ) % 27.6 %

The jurisdictions with favorable tax rates that have the most significant effective tax rate impact in the periods presented include Singapore, Malaysia, and Puerto Rico.

HP has elected to treat GILTI inclusions as period costs.

In fiscal year 2023, HP recorded $ 1.1 billion of net income tax benefits related to discrete items in the provision for taxes.

This amount included $ 726 million of tax effects related to internal reorganization, $ 255 million related to changes in valuation allowances, $ 101 million related to restructuring charges, $ 58 million related to the filing of tax returns in various jurisdictions, and $ 42 million related to acquisition charges.

These benefits were partially offset by income tax charges of $ 60 million related to audit settlements in various jurisdictions, $ 27 million of uncertain tax position charges, and $ 25 million related to extinguishment of debt.

In fiscal year 2023, excess tax benefits associated with stock options, restricted stock units and performance-adjusted restricted stock units were immaterial.

In fiscal year 2022, HP recorded $ 456 million of net income tax charges related to discrete items in the provision for taxes.

This amount included $ 649 million of tax effects related to internal reorganization, $ 107 million of uncertain tax position charges,

The effective tax rate differs from the U.S.

federal statutory rate of 21% for fiscal year 2024 primarily due to impacts of changes in valuation allowances and favorable tax rates associated with certain earnings from HP's operations in lower-tax jurisdictions throughout the world.

In fiscal year 2024, HP recorded $ 214 million of net income tax benefits related to non-recurring items in the provision for taxes.

This amount included $ 198 million related to changes in valuation allowances, $ 60 million related to restructuring charges, $ 14 million related to the filing of tax returns in various jurisdictions, and $ 11 million related to acquisition charges.

These benefits were partially offset by $ 39 million of uncertain tax position charges and $ 25 million related to changes in tax rates.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

$ 55 million related to withholding taxes on undistributed foreign earnings, $ 51 million related to audit settlements in various jurisdictions and $ 26 million of other net tax charges.

In fiscal year 2023, HP recorded $ 1.1 billion of net income tax benefits related to non-recurring items in the provision for taxes.

In fiscal year 2022, HP recorded $ 456 million of net income tax charges related to non-recurring items in the provision for taxes.

This amount included $ 649 million of tax effects related to internal reorganization, $ 107 million of uncertain tax position charges, $ 55 million related to withholding taxes on undistributed foreign earnings, $ 51 million related to audit settlements in various jurisdictions and $ 26 million of other net tax charges.

These charges were partially offset by income tax benefits of $ 189 million related to the filing of tax returns in various jurisdictions, $ 156 million related to changes in valuation allowances, $ 44 million related to restructuring charges, and $ 43 million related to Poly acquisition charges.

In fiscal year 2022, HP recorded excess tax benefits of $ 33 million associated with stock options, restricted stock units and performance-adjusted restricted stock.

In fiscal year 2021, HP recorded $ 4 million of net income tax charges related to discrete items in the provision for taxes.

This amount included income tax charges of $ 533 million related to the Oracle litigation proceeds and $ 15 million of uncertain tax position charges.

These charges were offset by income tax benefits of $ 368 million related to changes in valuation allowances, $ 89 million of tax effects related to internal reorganization, $ 51 million related to restructuring charges, $ 16 million related to the filing of tax returns in various jurisdictions, $ 11 million related to acquisition charges, and $ 9 million of other net tax benefits.

In fiscal year 2021, excess tax benefits associated with stock options, restricted stock units and performance-adjusted restricted stock units were immaterial.

As a result of certain employment actions and capital investments HP has undertaken, income from manufacturing and services in certain countries is subject to reduced tax rates, and in some cases is wholly exempt from taxes, through 2029.

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HP believes it has provided adequate reserves for all tax deficiencies or reductions in tax benefits that could result from federal, state and foreign tax audits.

HP regularly assesses the likely outcomes of these audits in order to determine the appropriateness of HP’s tax provision.

HP regularly assesses the likely outcomes of these audits in order to determine the appropriateness of HP’s

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Notes to Consolidated Financial Statements (Continued)

tax provision.

HP adjusts its uncertain tax positions to reflect the impact of negotiations, settlements, rulings, advice of legal counsel, and other information and events pertaining to a particular audit.

1 unchanged sentence

The amounts ultimately paid on resolution of an audit could be materially different from the amounts previously included in the Provision for taxes and therefore the resolution of one or more of these uncertainties in any particular period could have a material impact on net income or cash flows.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

HP has not provided for U.S.

53 unchanged sentences

Gross deferred tax assets as of October 31, 2024, 2023, and 2022 were reduced by valuation allowances of $ 6.7 billion, $ 7.0 billion and $ 7.6 billion, respectively.

In fiscal year 2024, the deferred tax asset valuation allowance decreased by $ 306 million primarily due to an increase in the expected utilization of foreign net operating losses.

In fiscal year 2023, the deferred tax asset valuation allowance decreased by $ 598 million primarily due to internal reorganization impacting foreign net operating losses and U.S.

deferred tax assets that are anticipated to be realized at a lower effective rate than the federal statutory rate.

In fiscal year 2022, the deferred tax asset valuation allowance decreased by $ 157 million primarily due to foreign net operating losses, U.S.

In fiscal year 2022, the deferred tax asset valuation allowance decreased by $ 157 million primarily due to a reduction in the expected utilization of foreign net operating losses, U.S.

deferred tax assets that are anticipated to be realized at a lower effective tax rate than the federal statutory tax rate, and the impact of the acquisition of Poly on the company’s deferred tax assets.

In fiscal year 2021, the deferred tax asset valuation allowance decreased by $ 202 million primarily due to foreign net operating losses and U.S.

deferred tax assets that are anticipated to be realized at a lower effective rate due to certain future U.S.

international tax reform implications.

AND SUBSIDIARIES

17 unchanged sentences

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.

As these transfers qualify as true sales under the applicable accounting guidance, the receivables are derecognized from the Consolidated Balance Sheets upon transfer, and HP receives a payment for the receivables from the third-party within a mutually agreed upon time period.

As these transfers qualify as true sales under the applicable accounting guidance, the receivables are de-recognized from the Consolidated Balance Sheets upon transfer, and HP receives a payment for the receivables from the third-party within a mutually agreed upon time period.

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

19 unchanged sentences

As of October 31

Prepaid and other current assets $ 1,445 $ 2,086

Supplier and other receivables

$ 2,180 $ 1,349

Prepaid and other current assets

Value-added taxes receivable 1,028 852

13 unchanged sentences

Right-of-use assets

Deposits and prepaid 427 474

Prepaid pension and post-retirement benefit assets

Deposits and prepaid

Other 1,129 853

$ 7,608 $ 7,609

(1) See Note 6, “Taxes on Earnings” for detailed information.

(2) See Note 8, “Goodwill and Intangible Assets” for detailed information.

(3) See Note 17, “Leases” for detailed information.

(4) See Note 4, “Retirement and Post-Retirement Benefit Plans” for detailed information.

AND SUBSIDIARIES

4 unchanged sentences

Deferred revenue 1,446 1,424

Employee compensation and benefit 1,046 954

Other accrued taxes

Employee compensation and benefit

Warranty 486 569

3 unchanged sentences

$ 10,378 $ 10,212

(1) See Note 17, “Leases” for detailed information.

Other Non-Current Liabilities

7 unchanged sentences

$ 4,282 $ 4,331

(1) See Note 17, “Leases” for detailed information.

(2) See Note 4, “Retirement and Post-Retirement Benefit Plans” for detailed information.

Interest and Other, Net

3 unchanged sentences

Factoring costs (1)

Net gain (loss) on debt extinguishment 107 — ( 16 )

( 155 ) ( 136 ) —

Net (loss) gain on debt extinguishment

Non-operating retirement-related credits 14 51 144

Oracle litigation proceeds

Defined benefit plan settlement gains (charges) — — 37

Tax indemnifications — — ( 1 )

1 unchanged sentence

$ ( 539 ) $ ( 519 ) $ ( 235 )

(1) Factoring costs for fiscal year 2022 and 2021 were included in Selling, general and administrative and were not material.

(1) Factoring costs for fiscal year 2022 were included in Selling, general and administrative and were not material.

AND SUBSIDIARIES

24 unchanged sentences

As of October 31, 2023 and 2022, HP’s contract liabilities balances were $ 2.7 billion and $ 2.5 billion, respectively, included in Other current liabilities and Other non-current liabilities in the Consolidated Balance Sheets.

The increase in the contract liabilities balance for the fiscal year 2022 was primarily driven by sales of fixed-price support and maintenance services and Poly acquisition, partially offset by $ 1.1 billion of revenue recognized that were included in the contract liabilities balance as of October 31, 2021.

The increase in the contract liabilities balance for the fiscal year 2023 was primarily driven by sales of fixed-price support and maintenance services, partially offset by $ 1.3 billion of revenue recognized that were included in the contract liabilities balance as of October 31, 2022.

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Notes to Consolidated Financial Statements (Continued)

Supplier Finance Program s

HP facilitates voluntary supplier finance programs to provide certain suppliers the opportunity to sell their right to HP’s payment obligations to participating financial institutions.

Under this program, HP agrees to pay the participating financial institutions the stated amount of confirmed invoices from its designated suppliers on the original maturity dates of the invoices.

Participation by suppliers in these programs have no impact on the payment terms and amounts due from HP.

HP does not have an economic interest in a supplier's participation in the program and is not a party to the agreement between the supplier and the financial institutions.

In connection with these programs, HP does not pledge assets or other forms of guarantees as security for the committed payment to the participating financial institutions.

For certain programs, HP pays a monthly service fee to a third-party administrato r that provides the supplier finance platform and related support.

HP and the participating financial institutions may terminate the agreement upon at least 30 days notice.

As of October 31, 2024 and October 31, 2023, HP had $ 7.8 billion and $ 6.6 billion, respectively, in obligations outstanding (i.e., unpaid invoices) that were confirmed as valid under the supplier finance programs.

Of the amounts confirmed as valid under the program and outstanding, the amounts owed to participating financial institutions were $ 0.9 billion as of both October 31, 2024 and October 31, 2023, respectively.

These obligations are included within the Accounts payable line item of HP’s Consolidated Balance Sheet .

AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

Goodwill and Intangible Assets

1 unchanged sentence

Personal Systems Printing Corporate Investments Total

Balance at October 31, 2021 (1)

Balance as of October 31, 2022 (1)

$ 4,695 $ 3,728 $ 118 $ 8,541

Acquisitions/adjustments 1,790 — 16 1,806

Foreign currency translation — ( 68 ) — ( 68 )

Balance at October 31, 2022 (1)

Foreign currency translation and other

Balance as of October 31, 2023 (1)

4,722 3,751 118 8,591

Acquisitions/adjustments 27 4 — 31

Foreign currency translation — 19 — 19

Balance at October 31, 2023 (1)

Foreign currency translation and other

Balance as of October 31, 2024 (1)

$ 4,748 $ 3,761 $ 118 $ 8,627

2 unchanged sentences

As of October 31, 2024, our reporting units are consistent with the reportable segments identified in Note 2, “Segment Information”.

In the fourth quarter of fiscal 2023, HP performed a quantitative test as of August 1, 2023 and concluded that there was no goodwill impairment.

There were no goodwill impairments in fiscal years 2022 and 2021.

Personal Systems had a negative carrying amount of net assets as of October 31, 2024, 2023 and 2022 primarily as a result of a favorable cash conversion cycle.

11 unchanged sentences

Total $ 1,319

AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

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

1 unchanged sentence

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

Observable inputs are developed using market data such as publicly available information and reflect the assumptions market participants would use, while unobservable

AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

inputs are developed using the best information available about the assumptions market participants would use.

Observable inputs are developed using market data such as publicly available information and reflect the assumptions market participants would use, while unobservable inputs are developed using the best information available about the assumptions market participants would use.

Assets and liabilities are classified in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement:

14 unchanged sentences

Marketable securities and mutual funds (2)

54 130 — 184 33 45 — 78

Derivative Instruments

Interest rate contracts — 4 — 4 — — — —

Foreign currency contracts — 225 — 225 — 489 — 489

Other derivatives — — — — — 2 — 2

Total assets $ 1,386 $ 1,374 $ — $ 2,760 $ 1,933 $ 1,126 $ — $ 3,059

9 unchanged sentences

Money market funds invested in government debt and traded in active markets are included in Level 1.

(2) As of October 31, 2024, $ 78 million of debt securities were restricted to fund benefits received by qualifying employees under a sponsored defined benefit plan.

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Notes to Consolidated Financial Statements (Continued)

Valuation Techniques

10 unchanged sentences

HP estimates the fair value of its debt primarily using an expected present value technique, which is based on observable market inputs using interest rates currently available to companies of similar credit standing for similar terms and remaining maturities and considering its own credit risk.

The portion of HP’s debt that is hedged is reflected in the Consolidated

AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

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 $ 8.5 billion as compared to its carrying amount of $ 9.5 billion at October 31, 2023.

The portion of HP’s debt that is hedged is reflected in the Consolidated 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 $ 9.4 billion as compared to its carrying amount of $ 9.7 billion as of October 31, 2024.

The fair value of HP’s short- and long-term debt was $ 8.5 billion as compared to its carrying value of $ 9.5 billion at October 31, 2023.

1 unchanged sentence

Other Financial Instruments:

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

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

16 unchanged sentences

Marketable securities and mutual funds (1)

115 69 — 184 40 38 — 78

Total available-for-sale investments 118 69 — 187 43 38 — 81

Total cash equivalents and available-for-sale investments $ 2,462 $ 69 $ — $ 2,531 $ 2,532 $ 38 $ — $ 2,570

(1) As of October 31, 2024, $ 78 million of debt securities were restricted to fund benefits received by qualifying employees under a sponsored defined benefit plan.

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

5 unchanged sentences

Cost Fair Value

Due in one year $ 3 $ 3

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

Due in less than one year

Due in one to five years 62 62

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

These amounted to $ 107 million and $ 111 million as of October 31, 2024 and 2023, respectively.

1 unchanged sentence

All instruments are considered investment grade.

No credit-related or noncredit-related impairment losses were recorded in the fiscal year 2023.

No credit-related or noncredit-related impairment losses were recorded in fiscal year 2024.

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Notes to Consolidated Financial Statements (Continued)

Derivative Instruments

5 unchanged sentences

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 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 Company includes gross collateral posted and received in

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Notes to Consolidated Financial Statements (Continued)

other current assets and other current liabilities in the Consolidated Balance Sheets, respectively.

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 the net fair value of financial instruments fluctuates.

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

The fair value of derivatives with credit contingent features in a net liability position was $ 59 million and $ 91 million as of October 31, 2024 and 2023, respectively, all of which were fully collateralized within two business days.

5 unchanged sentences

Cash Flow Hedges

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 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 products net revenue, cost of products net 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.

however, hedges related to long-term procurement arrangements, contractual pricing and/or business unit specific exposures may 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 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.

During fiscal 2024, HP entered into a series of forward starting swap agreements with notional amounts totaling $ 500 million 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.

These agreements were designated as cash flow hedges.

Other Derivatives

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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 fiscal 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.

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Notes to Consolidated Financial Statements (Continued)

During fiscal year 2024 and 2023, 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 Balance Sheets

11 unchanged sentences

Foreign currency contracts 14,563 169 36 117 34 15,278 410 70 147 52

Interest rate contracts 500 — 4 — 1 — — — — —

Total derivatives designated as hedging instruments 15,813 169 40 128 45 16,028 410 70 147 110

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

Effect of Derivative Instruments in the Consolidated Statements of Earnings

The pre-tax effect of derivative instruments and related hedged items in a fair value hedging relationship were as follows:

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Notes to Consolidated Financial Statements (Continued)

Derivative Instrument Hedged Item Location For the fiscal years ended October 31 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

Effect of Derivative Instruments in the Consolidated Statements of Earnings

The pre-tax effect of derivative instruments and related hedged items in a fair value hedging relationship were as follows:

Derivative Instrument Hedged Item Location For the fiscal years ended October 31 Gain/(loss) recognized in earnings on derivative instruments Gain/(loss) recognized in earnings on hedged item

Interest rate contracts Fixed-rate debt Interest and other, net 2024 $ 36 $ ( 36 )

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The pre-tax effect of derivative instruments in cash flow hedging relationships included in earnings were as follows:

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

For the fiscal years ended October 31 For the fiscal years ended October 31

Gain/ (loss) reclassified from Accumulated other comprehensive loss into earnings

For the fiscal years ended October 31

2024 2023 2022

In millions In millions

Net revenue $ 53,718 $ 62,910 $ 63,460 $ 243 $ 877 $ ( 214 )

Cost of revenue ( 42,210 ) ( 50,647 ) ( 50,053 ) ( 167 ) ( 101 ) ( 30 )

Products net revenue

$ 408 $ 243 $ 877

Cost of products net revenue

( 142 ) ( 167 ) ( 101 )

Operating expenses ( 4 ) ( 4 ) ( 1 )

Interest and other, net 12 12 4

Total $ 84 $ 779 $ ( 243 )

$ 274 $ 84 $ 779

As of October 31, 2024, HP expects to reclassify an estimated accumulated other comprehensive gain of approximately $ 21 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 Statements of Earnings for fiscal years 2023, 2022 and 2021 was as follows:

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.

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Notes to Consolidated Financial Statements (Continued)

The pre-tax effect of derivative instruments not designated as hedging instruments recognized in Interest and other, net in the Consolidated Statements of Earnings was as follows:

Gain/(loss) recognized in earnings on derivative instrument

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Notes payable to banks, lines of credit and other 48 — % 51 — %

Total notes payable and short-term borrowings

$ 1,406 $ 230

Long-Term Debt

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$ 1,200 issued at discount to par at a price of 99.863 % at 6.0 %, 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

16 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.

(3) During the twelve months ended October 31, 2023, HP repurchased or redeemed and settled $ 497 million of the March 2029 Notes related to the August 2022 Poly acquisition.

(4) During the twelve months ended October 31, 2023, HP repurchased and settled $ 1.15 billion in aggregate principal amount of various Global Notes.

As disclosed in Note 10, “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.

6 unchanged sentences

Total $ 9,748

Extinguishment of Debt

In July 2023, HP commenced and completed a tender offer to purchase approximately $ 1.15 billion in aggregate principal amount of its outstanding US Dollar 1.45 % Global Notes due June 17, 2026, 3.40 % Global Notes due June 17, 2030 and 4.20 % Global Notes due April 15, 2032.

This extinguishment of debt resulted in a net gain of $ 115 million, which was recorded within Interest and other, net on the Consolidated Statements of Earnings.

Additionally during fiscal year 2023, HP repurchased or redeemed and settled $ 497 million of the March 2029 Notes related to the August 2022 Poly acquisition.

This extinguishment of debt resulted in a net loss of $ 8 million, which was also recorded within Interest and other, net on the Consolidated Statement of Earnings.

Commercial Paper

3 unchanged sentences

The principal amount outstanding under this program and certain short-term borrowings at any time cannot exceed a $ 6.0 billion authorization by HP’s Board of Directors.

As of October 31, 2023 and October 31, 2022, no commercial paper were outstanding under the program.

Credit Facilities

As of October 31, 2023, HP maintained a $ 5.0 billion sustainability-linked senior unsecured committed revolving credit facility, which HP entered into on May 26, 2021, and a $ 1.0 billion senior unsecured committed 364 -day revolving credit facility, which HP entered into in March 2023.

Commitments under the $ 5.0 billion revolving credit facility will be available until May 26, 2026 and commitments under the $ 1.0 billion 364 -day revolving credit facility will be available until March 19, 2024.

Commitment fees, interest rates and other terms of borrowing under the revolving credit facilities vary based on HP’s external credit ratings and, for the $ 5.0 billion facility, certain sustainability metrics.

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

As of October 31, 2023, HP was in compliance with the covenants in the credit agreements governing the revolving credit facilities.

As of October 31, 2024, HP maintained a $ 5.0 billion 5-year sustainability-linked senior unsecured committed revolving credit facility (the “New Revolving Facility”), which HP entered into on August 1, 2024.

Commitments under the New Revolving Facility will be available until August 1, 2029.

Commitment fees, interest rates and other terms of borrowing under the New Revolving Facility vary based on HP’s external credit ratings and certain sustainability metrics.

Funds borrowed under the New Revolving Facility may be used for general corporate purposes.

As of October 31, 2023, HP had maintained a $ 5.0 billion sustainability-linked senior unsecured committed revolving credit facility for general corporate purposes.

I n March 2024, the $ 1.0 billion senior unsecured committed 364 -day revolving credit facility matured in accordance with its terms.

Additionally, commitments under the previous $ 5.0 billion sustainability-linked senior unsecured committed revolving credit facility were terminated concurrently with the execution of the New Revolving Facility.

As of October 31, 2024, HP was in compliance with the covenants in the credit agreement governing the revolving credit facility.

Available Borrowing Resources

As of October 31, 2023, HP had available borrowing resources of $ 1.2 billion from uncommitted lines of credit in addition to the full capacity of the revolving credit facilities.

As of October 31, 2024, HP had available borrowing resources of $ 0.9 billion from uncommitted lines of credit in addition to funds available under the revolving credit facility.

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

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

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

( 13 ) 75 ( 328 )

Tax provision (benefit) on (gains) losses reclassified into earnings 18 195 ( 17 )

Tax provision on (gains) losses reclassified into earnings

40 93 ( 133 )

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

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

26 26 ( 183 )

Tax benefit on amortization of actuarial loss and prior service benefit 1 ( 6 ) ( 17 )

Tax (provision) benefit on curtailments, settlements and other — ( 1 ) 9

Tax benefit on unrealized gains (losses) arising during the period

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

Tax provision on curtailments, settlements and other

( 1 ) — ( 1 )

5 unchanged sentences

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

For the year ended October 31

For the years ended October 31

2024 2023 2022

4 unchanged sentences

Change in unrealized components of cash flow hedges:

Unrealized (losses) gains arising during the period

Unrealized gains (losses) arising during the period

38 ( 352 ) 1,213

(Gains) losses reclassified into earnings ( 66 ) ( 584 ) 226

Gains reclassified into earnings

( 221 ) ( 66 ) ( 584 )

( 183 ) ( 418 ) 629

Change in unrealized components of defined benefit plans:

(Losses) gains arising during the period

Unrealized losses arising during the period

( 68 ) ( 115 ) ( 28 )

13 unchanged sentences

— ( 221 ) 8 — ( 213 )

Reclassifications of curtailments, settlements and other into earnings — — 1 — 1

Balance at end of period $ 14 $ 47 $ ( 496 ) $ 1 $ ( 434 )

38 unchanged sentences

Based on the exemption of levies on business sales and industry opposition to increasing 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.

Forsyth, et al.

and Hewlett Packard Enterprise .

This is a purported class and collective action filed on August 18, 2016 in the United States District Court, Northern District of California, against HP and Hewlett Packard Enterprise (“HPE”) alleging the defendants violated federal and state law by terminating older workers and replacing them with younger workers.

In their most recent complaint, plaintiffs seek to represent (1) a putative nationwide federal Age Discrimination in Employment Act (ADEA) collective comprised of all former HP Inc.

employees 40 years of age and older who had their employment terminated under a WFR plan in or after 2014 or 2015, depending on state law;

and (2) a putative Rule 23 class under California law comprised of all former HP Inc.

employees 40 years of age and older who had their employment terminated in California under a WFR plan in or after 2012.

Excluded from the putative collective and class are employees who (a) signed a Waiver and General Release Agreement at termination, or (b) signed an Agreement to Arbitrate Claims.

Similar claims are pending against HPE.

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.

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

In June 2023, the parties reached an agreement in principle to resolve this matter.

The parties have finalized a settlement agreement, and the court preliminarily approved it on October 26, 2023.

The Court has set the Final Approval Hearing for March 28, 2024.

India Directorate of Revenue Intelligence Proceedings .

6 unchanged sentences

After the order, HP India deposited an additional $ 3 million in connection with the parts-related notice so as to avoid certain penalties.

HP India filed appeals of the Commissioner’s orders before the Customs, Excise and Service Tax Appellate Tribunal (the “Customs Tribunal”) along with applications for waiver of the pre-deposit of remaining demand amounts as a condition for hearing

AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

The Customs Department has also filed crossappeals before the Customs Tribunal.

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

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

4 unchanged sentences

Pursuant to the separation and distribution agreement, Hewlett Packard Enterprise has agreed to indemnify HP in part, base d on the extent to which any liability arises from the products and spare parts of Hewlett Packard Enterprise’s businesses.

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Notes to Consolidated Financial Statements (Continued)

Philips Patent Litigation .

8 unchanged sentences

On August 10, 2023, HP filed a motion for summary judgment of indefiniteness for all asserted claims.

Caltech Patent Litigation .

On November 11, 2020, the California Institute of Technology (“Caltech”) filed a complaint against HP for patent infringement in the federal court for the Western District of Texas.

On March 19, 2021, Caltech filed an amendment to this same complaint.

The complaint as amended alleges infringement of five of Caltech’s patents, U.S.

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.

Caltech seeks unspecified damages and other relief.

In August 2021, the court stayed the case pending the decision by the U.S.

Court of Appeals for the Federal Circuit in The California Inst.

Broadcom Ltd et al., Case No.

2020-2222 , which was issued on February 4, 2022, and a request for further review of that decision by the Supreme Court was denied.

On August 16, 2023, the parties informed the court that the stay should be lifted.

On November 6, 2023, the court issued an order staying all discovery and deadlines pending discovery relating to whether Caltech has standing to bring suit with respect to the asserted patents and the court’s resolution of that issue.

In re HP Inc.

Securities Litigation (Electrical Workers Pension Fund, Local 103, I.B.E.W.

HP Inc., et al.) .

On February 19, 2020, Electrical Workers Pension Fund, Local 103, I.B.E.W.

filed a putative class action complaint against HP, Dion Weisler, Catherine Lesjak, and Steven Fieler in U.S.

District Court in the Northern District of California.

The court appointed the State of Rhode Island, Office of the General Treasurer, on behalf of the Employees’ Retirement System of Rhode Island and Iron Workers Local 580 Joint Funds as Lead Plaintiffs.

Lead Plaintiffs filed an amended complaint, which additionally named as defendants Enrique Lores and Christoph Schell.

HP and the named officers filed a motion to dismiss the complaint for failure to state a claim upon which relief can be granted.

The court granted HP’s motion to dismiss and granted plaintiffs leave to amend the complaint.

Plaintiffs’ second amended complaint, which no longer names Christoph Schell as a defendant, alleges, among other things, that from February 23, 2017 to October 3, 2019, HP and the named officers violated Sections 10(b) and 20(a) of the Exchange Act by making false or misleading statements about HP’s printing supplies business.

It further alleges that Dion Weisler and Enrique Lores violated Sections 10(b) and 20A of the Exchange Act by allegedly selling shares of HP common stock during this period while in possession of material, non-public adverse information about HP’s printing supplies business.

Plaintiffs seek compensatory damages and other relief.

HP and the named officers filed a motion to dismiss the second amended complaint for failure to state a claim upon which relief can be granted.

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

Plaintiffs appealed the decision.

The parties settled and the motion for preliminary approval of settlement was filed on March 3, 2023.

Under the terms of the settlement, HP agreed to pay an amount that is immaterial to HP.

The district court granted preliminary approval of the settlement on April 7, 2023.

On September 6, 2023, the court issued an order approving the settlement and directing entry of final judgment.

On October 20, 2023, the Court of Appeals for the Ninth Circuit issued an order dismissing plaintiffs’ appeal.

On July 1, 2024, the district court denied the motion without prejudice to renew.

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

3 unchanged sentences

Lead Plaintiff filed a consolidated complaint, which additionally names as defendants Enrique Lores and Richard Bailey.

The complaint alleges, among other things, that from November 5, 2015 to June 21, 2016, HP and the named current and former officers violated Sections 10(b) and 20(a) of the Exchange Act by concealing material information and making false statements about HP’s printing supplies business.

Plaintiffs seek compensatory damages and other relief.

2 unchanged sentences

Plaintiffs appealed the decision.

On April 11, 2023, the appellate court reversed the

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Notes to Consolidated Financial Statements (Continued)

district court’s decision and remanded the case to the district court for further proceedings consistent with the appellate opinion, including consideration of HP’s other arguments for dismissal.

On June 27, 2023, the district court issued an order setting the briefing schedule for a renewed motion to dismiss.

On April 11, 2023, the appellate court reversed the district court’s decision and remanded the case to the district court for further proceedings consistent with the appellate opinion, including consideration of HP’s other arguments for dismissal.

On July 21, 2023, HP and the named officers filed a renewed motion to dismiss.

On March 27, 2024, the district court issued an order granting in part and denying in part the motion to dismiss.

On August 8, 2024, the Court of Appeals for the Ninth Circuit granted HP’s petition for permission to appeal.

On October 28, 2024, HP filed its appeal.

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.

5 unchanged sentences

By stipulation of the parties, the Lovoi action was stayed pending a ruling on the motion to dismiss in York County and exhaustion of all related appeals.

Both derivative actions will remain stayed while the district court considers on remand HP’s other arguments for dismissal .

On May 31, 2024, the court adopted a stipulation in which the derivative plaintiffs and defendants agreed to consolidate the derivative proceedings, close the Lovoi action, and extend the current stay through summary judgment in the Securities Class Action.

Legal Proceedings re Authentication of Supplies.

5 unchanged sentences

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, Israel, Australia and New Zealand have been resolved, have concluded, or have concluded subject only to HP’s pending appeal.

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

Civil litigation filed by Digital Revolution B.V.

1 unchanged sentence

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

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.

In the case directed to Laserjet printers, plaintiffs filed a motion for class certification, and, on December 8, 2023, the court entered an order denying in full plaintiffs’ request to certify a damages class and granting certification of a narrowed injunctive relief class composed of those who did not see HP’s disclosures.

In its order, the court declined at this juncture to resolve the merits of the sufficiency of HP’s disclosures.

The case involving Inkjet printers remains in its early stages.

Both parties appealed, and the court of appeal issued a judgment on November 19, 2024, rejecting competition claims against HP and providing that use of Dynamic Security by HP is not unlawful.

In addition, two putative class actions have been filed against HP in federal court in California, in December 2020, April 2022, and one in federal court in Illinois, in January 2024, arising out of the use of Dynamic Security firmware updates in HP Laserjet printers, in HP Inkjet printers, and in both, respectively.

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

In the April 2022 case, plaintiffs have filed a stipulation on October 30, 2024 to have the case dismissed with prejudice for their individual claims and without prejudice for the class claims.

In the December 2020 case, the parties have finalized a settlement agreement, which plaintiffs submitted to the court on October 31, 2024 along with a motion seeking preliminary approval.

The January 2024 case is in its early stages.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

Autonomy-Related Legal Proceedings.

As the result of an internal investigation, HP obtained information about certain accounting improprieties, disclosure failures and misrepresentations at Autonomy that occurred before and in connection with its 2011 acquisition of Autonomy.

On April 17, 2015, four former HP subsidiaries that became subsidiaries of Hewlett Packard Enterprise at the time of the Separation (Autonomy Corporation Limited, Hewlett Packard Vision BV, Autonomy Systems, Limited, and Autonomy, Inc.) initiated civil proceedings in the U.K.

High Court of Justice against two members of Autonomy’s former management, Michael Lynch and Sushovan Hussain, for breach of their fiduciary duties in causing Autonomy group companies to engage in improper transactions and accounting practices.

The claims seek more than $ 5 billion in damages.

Lynch and Hussain filed defenses and Mr.

Lynch filed a counterclaim seeking $ 160 million in damages for alleged misstatements regarding Lynch.

In 2015, four former Hewlett Packard Company subsidiaries that became subsidiaries of Hewlett Packard Enterprise at the time of the Separation (Autonomy Corporation Limited, Hewlett Packard Vision BV, Autonomy Systems Limited, and Autonomy, Inc., hereinafter the “Claimants”) initiated civil proceedings in the U.K.

Trial concluded in January 2020.

On May 17, 2022, the court issued its final judgment, finding that HP succeeded on substantially all claims and that Messrs.

Lynch and Hussein engaged in fraud, and dismissing Mr.

Lynch’s counterclaim.

The court deferred its damages ruling to a later, separate judgment to be issued after further proceedings, which are now set to begin on February 12, 2024, but 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.

In May 2022, the court issued its liability judgment, finding that the Claimants had succeeded on substantially all claims and that Messrs.

Lynch and Hussein engaged in fraud, and dismissing a counterclaim filed by Mr.

The court deferred the issue of damages to further proceedings, but indicated that damages awarded may be substantially less than was claimed.

In February 2024, the court held a two-week trial on damages, the Claimants sought recovery for $ 4 billion in losses, and the court took the issue under advisement.

Litigation is unpredictable, and there can be no assurance of a recovery of 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.

1 unchanged sentence

Pursuant to the terms of the separation and distribution agreement, HP and Hewlett Packard Enterprise will share equally in any recovery.

In addition, Messrs.

Hussein and Lynch, and Stephen Chamberlain, former VP of Finance of Autonomy, were each indicted on federal criminal charges in the Northern District of California.

On April 30, 2018, a jury found Mr.

Hussein guilty of conspiracy to commit wire fraud, securities fraud, and multiple counts of wire fraud, and that judgment was affirmed on appeal in August 2020.

Lynch and Chamberlain are set to face trial on charges of conspiracy to commit wire fraud, and multiple counts of wire fraud on March 18, 2024.

HP is continuing to cooperate with the ongoing enforcement actions .

AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

Nokia Patent Litigation .

4 unchanged sentences

On December 11, 2023, HP filed counterclaims against Nokia in the Delaware action, including claims that Nokia violated its commitments to license standard-essential patents on fair, reasonable, and non-discriminatory (“FRAND”) terms, and seeking a court determination of the proper FRAND rate.

Nokia’s patent litigation against HP also includes a lawsuit filed in November 2023 against HP and six of its subsidiaries in the European Unified Patent Court in Germany, and a lawsuit filed on December 1, 2023, against a subsidiary, HP Brasil Indústria e Comércio de Equipamentos Eletrônicos Ltda.

(“HP Brasil”), in the state court in Rio de Janeiro in Brazil.

Nokia’s patent litigation against HP also includes a lawsuit filed in November 2023 against HP and six of its subsidiaries in the European Unified Patent Court (“UPC”) in Germany, 2 lawsuits filed in November 2023 but served in January 2024 against HP and its German subsidiary in state court in Munich, Germany, and a lawsuit filed on December 1, 2023, against a subsidiary, HP Brasil Indústria e Comércio de Equipamentos Eletrônicos Ltda.

(“HP Brazil”), in the state court in Rio de Janeiro in Brazil.

In Brazil, Nokia alleged that HP’s products contain “skip mode” technology compatible with H.264 video standards that infringes one of Nokia’s Brazilian patents.

On December 4, 2023, before HP had received service of the lawsuit, the court granted Nokia an ex parte preliminary injunction against HP Brasil’s commercialization of such products in Brazil.

HP has appealed the injunction and asked the appellate court to suspend its enforcement.

If the court does not do so, the injunction in Brazil will take effect and remain in place unless overturned on appeal, until the state court revokes or modifies it, or the case is resolved.

If HP is not successful in its defenses, it may be subject to injunctions or licensing demands to avoid potential disruptions to its business.

Given the procedural posture and nature of these cases, including proceedings that are in their early stages and have significant factual and legal issues to be resolved, HP is unable to make a reasonable estimate of the potential loss or range of losses that may arise from these matters.

On December 4, 2023, before HP had received service of the lawsuit, the court granted Nokia an ex parte preliminary injunction against HP Brazil’s commercialization of such products in Brazil.

HP appealed the injunction and asked the appellate court to suspend its enforcement.

On August 14, 2024, the Brazilian appellate court denied HP’s interlocutory appeal of the preliminary injunction, leaving it unchanged because HP allegedly faces no immediate harm.

On January 31, 2024, HP Brazil filed its defense and separately filed a nullity action to invalidate the patent.

From July 24-31, 2024, the ITC held the hearing in the first investigation.

In the second ITC investigation, the hearing was held September 9-13, 2024.

In October, Nokia and HP reached agreement to resolve all patent litigation between the parties, and all pending proceedings are in the process of being dismissed.

R2 Semiconductor Patent Litigation.

3 unchanged sentences

R2 seeks an injunction prohibiting the sale of the alleged infringing products.

Intel is indemnifying HP.

The Dusseldorf Regional Court conducted a trial on December 7, 2023, and is set to issue a decision on January 25, 2024.

If the Court issues a decision on the merits in favor of R2 and against HP and the other defendants, it could impose an injunction prohibiting sales of the accused products in Germany which could take effect immediately and remain in place unless overturned on appeal or the parties reach an agreement.

Given the procedural posture and the nature of the case, HP is unable to make a reasonable estimate of the potential loss or range of losses that might arise from this lawsuit.

Intel has agreed to defend and indemnify HP and its affiliates against certain losses incurred by HP in connection with the alleged infringement.

The Dusseldorf Regional Court conducted a trial on December 7, 2023 and issued an adverse judgment on February 7, 2024.

The Court’s judgment imposes an injunction prohibiting sales of the accused products in Germany, an order to stop all other infringing actions, and an order to issue a communication to commercial customers recalling the relevant products sold since March 5, 2020, which could take effect upon notice of R2’s payment of the required sureties and remain in place unless stayed or overturned on appeal or the parties reach an agreement.

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

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

R2 asserts the same European patent is infringed.

In August 2024, Intel finalized agreements with R2 and related parties resolving all litigation.

All pending litigation against HP has been dismissed.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

Litigation with Access Advance Patent Pool regarding video codecs.

Access Advance LLC (“Access Advance”) is an independent licensing administrator formed to license allegedly essential patents for standards-based video codecs, which it licenses through various licensing pools.

In late 2023, three members of Access Advance’s HEVC Advance patent pool, Dolby, Mitsubishi Electric (“Mitsubishi”) and Konikijke Philips N.V.

(“Philips”), each filed patent infringement lawsuits against HP and various affiliates in Germany and Europe.

The complaints alleged that HP products that are compliant with the High Efficiency Video Coding (H.265) standard infringe the pool members' respective patents, sought an injunction, and alleged that HP has failed to act as a willing licensee of HEVC essential patents based on HP's negotiations with Access Advance.

In July 2024, HP filed a countersuit against Access Advance, Mitsubishi, Philips, and Dolby in Massachusetts state court alleging that they breached their obligations to license their patents on reasonable and nondiscriminatory terms and asked the court to order the defendants to offer a license to their patents on such terms.

In October 2024, Access Advance and HP reached agreement to resolve all pending litigation, which is in the process of being dismissed.

An immaterial issue with Access Advance will be decided by a third party.

Environmental

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Cross-Indemnifications with Hewlett Packard Enterprise

On November 1, 2015, Hewlett-Packard Company completed the separation (the “Separation”) of Hewlett Packard Enterprise Company (“Hewlett Packard Enterprise”), Hewlett-Packard Company’s former enterprise technology infrastructure, software, services and financing businesses.

On November 1, 2015, Hewlett-Packard Company completed the separation of Hewlett Packard Enterprise, Hewlett-Packard Company’s former enterprise technology infrastructure, software, services and financing businesses.

The separation and distribution agreement provides for cross-indemnities between HP and Hewlett Packard Enterprise for liabilities allocated to the respective party pursuant to the terms of such agreement.

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Historically, payments made related to these indemnifications have been immaterial.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

HP records tax indemnification receivables from various third parties for certain tax liabilities that HP is jointly and severally liable for, but for which it is indemnified by those same third parties under existing legal agreements.

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however, contractual warranty terms, repair costs, product call rates, average cost per call, current period product shipments and ongoing product failure rates, as well as specific product class failures outside of HP’s baseline experience, affect the estimated warranty obligation.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

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

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Fiscal year In millions

Thereafter 18

Total $ 1,366

HP determines, at lease inception, whether or not an arrangement contains a lease.

As a lessee, HP determines, at lease inception, whether or not an arrangement contains a lease.

A significant portion of the operating lease portfolio includes real estate leases.

Additionally, HP has identified embedded operating leases within certain outsourced supply chain contracts.

Leasing arrangements typically range in terms from 1 to 11 years with varying renewal and termination options.

Leasing arrangements have a remaining lease term ranging from 2 to approximately 11 years with varying renewal and termination options.

Substantially all of HP’s leases are considered operating leases.

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Finance leases are included in Property, plant and equipment, net, Notes payable and short-term borrowings and Long-term debt in the Consolidated Balance Sheets.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

As most of the leases do not provide an implicit interest rate, HP uses the incremental borrowing rate based on the information available at the commencement date of a lease in determining the present value of lease payments.

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HP uses the unsecured borrowing rate and risk-adjusts that rate to approximate a collateralized rate.

HP has elected the practical expedient to combine lease and non-lease components as a single lease element for its real estate leases and certain outsourced supply chain contracts in calculating the ROU assets and lease liabilities.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

HP has elected the practical expedient to combine lease and non-lease components as a single lease element for its real estate leases and certain outsourced warehousing contracts in calculating the ROU assets and lease liabilities.

Where HP chooses not to combine the lease and non-lease components, HP allocates contract consideration to the lease and non-lease components based on relative standalone prices.

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Total lease expense $ 336 $ 336

All lease expenses, including variable lease costs, are primarily included in Cost of revenue and Selling, general and administrative expenses in the Consolidated Statements of Earnings based on the use of the facilities.

All lease expenses, including variable lease costs, are primarily included in Cost of net revenue and Selling, general and administrative expenses in the Consolidated Statements of Earnings based on the use of the facilities.

Variable lease expense relates primarily to leased real estate utilized for office space and outsourced warehousing.

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There were no material operating leases that HP had entered into and that were yet to commence as of October 31, 2024.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

Acquisitions in fiscal 2022

In fiscal 2022, HP completed two acquisitions.

Goodwill, which represents the excess of the purchase price over the net tangible and intangible assets acquired, is not deductible for tax purposes.

The following table presents the aggregate estimated fair values of the assets acquired and liabilities assumed for the acquisitions in fiscal 2022:

Goodwill $ 1,793

Amortizable intangible assets 1,429

Net assets acquired ( 364 )

Total fair value of consideration $ 2,858

Acquisition of Poly

HP’s largest acquisition in fiscal 2022 was Poly, a leading global provider of workplace collaboration solutions, which was completed in August 2022 with a total fair value purchase consideration of $ 2.8 billion.

The acquisition supports HP’s strategy to drive growth in hybrid work solutions within the Personal Systems segment.

In connection with this acquisition, HP recorded approximately $ 1.8 billion of goodwill and $ 1.4 billion of amortizable purchased intangible assets.

As a lessor, HP records revenue under sales-type leases at the commencement of the lease.

Revenue recognized from sales-type leases constituted less than one percent of product net revenue for fiscal years 2024, 2023 and 2022 respectively.

As of October 31, 2024 and 2023, the net investment in leases balance were $ 705 million and $ 527 million, respectively.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

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-K

Item 8. Financial Statements and Supplementary Data