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Hewlett Packard Enterprise Co. – ‘8-K’ for 2/4/21 – ‘EX-99.1’

On: Thursday, 2/4/21, at 4:20pm ET · For: 2/4/21 · Accession #: 1645590-21-4 · File #: 1-37483

  As Of               Filer                 Filing    For·On·As Docs:Size

 2/04/21  Hewlett Packard Enterprise Co.    8-K:2,9     2/04/21   13:1.1M

Current Report — Form 8-K
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 8-K         Current Report                                      HTML     31K 
 2: EX-99.1     Miscellaneous Exhibit                               HTML    256K 
 9: R1          Cover Page                                          HTML     46K 
11: XML         IDEA XML File -- Filing Summary                      XML     12K 
 8: XML         XBRL Instance -- hpe-20210204_htm                    XML     22K 
10: EXCEL       IDEA Workbook of Financial Reports                  XLSX      6K 
 4: EX-101.CAL  XBRL Calculations -- hpe-20210204_cal                XML      7K 
 5: EX-101.DEF  XBRL Definitions -- hpe-20210204_def                 XML      9K 
 6: EX-101.LAB  XBRL Labels -- hpe-20210204_lab                      XML     68K 
 7: EX-101.PRE  XBRL Presentations -- hpe-20210204_pre               XML     33K 
 3: EX-101.SCH  XBRL Schema -- hpe-20210204                          XSD     11K 
12: JSON        XBRL Instance as JSON Data -- MetaLinks               12±    17K 
13: ZIP         XBRL Zipped Folder -- 0001645590-21-000004-xbrl      Zip     35K

‘EX-99.1’ — Miscellaneous Exhibit

This Exhibit is an HTML Document rendered as filed. [ Alternative Formats ]

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Document

Exhibit 99.1

HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES

FISCAL 2019 SEGMENT INFORMATION (Revised)

(Unaudited)

(In millions)


	REVISED AMOUNTS										AMOUNTS AS PREVIOUSLY REPORTED										VARIANCE
	Three months ended								Twelve months ended		Three months ended								Twelve months ended		Three months ended								Twelve months ended
	Jan. 31, 2019		Apr. 30, 2019		Jul. 31, 2019		Oct. 31, 2019		Oct. 31, 2019		Jan. 31, 2019		Apr. 30, 2019		Jul. 31, 2019		Oct. 31, 2019		Oct. 31, 2019		Jan. 31, 2019		Apr. 30, 2019		Jul. 31, 2019		Oct. 31, 2019		Oct. 31, 2019
Net revenue: (a)
Compute	$	3,601	$	3,338	$	3,415	$	3,376	$	13,730	$	3,575	$	3,318	$	3,400	$	3,349	$	13,642	$	26	$	20	$	15	$	27	$	88
HPC & MCS	791		740		650		802		2,983		779		721		633		777		2,910		12		19		17		25		73
Storage	1,372		1,340		1,277		1,266		5,255		1,356		1,318		1,255		1,256		5,185		16		22		22		10		70
A & PS	—		—		—		—		—		241		260		242		269		1,012		(241)		(260)		(242)		(269)		(1,012)
Intelligent Edge	705		685		781		742		2,913		705		685		781		742		2,913		—		—		—		—		—
Financial Services	919		896		888		878		3,581		919		896		888		878		3,581		—		—		—		—		—
Corporate Investments and Other	305		324		318		341		1,288		118		125		130		134		507		187		199		188		207		781
Total Segments	7,693		7,323		7,329		7,405		29,750		7,693		7,323		7,329		7,405		29,750		—		—		—		—		—
Elimination of intersegment net revenue	(140)		(173)		(112)		(190)		(615)		(140)		(173)		(112)		(190)		(615)		—		—		—		—		—
Total HPE consolidated net revenue	$	7,553	$	7,150	$	7,217	$	7,215	$	29,135	$	7,553	$	7,150	$	7,217	$	7,215	$	29,135	$	—	$	—	$	—	$	—	$	—
Earnings before taxes: (a)
Compute	$	387	$	350	$	475	$	507	$	1,719	$	340	$	307	$	439	$	464	$	1,550	$	47	$	43	$	36	$	43	$	169
HPC & MCS	108		104		60		93		365		98		92		51		79		320		10		12		9		14		45
Storage	270		270		227		242		1,009		254		244		207		219		924		16		26		20		23		85
A & PS	—		—		—		—		—		(32)		(14)		(9)		1		(54)		32		14		9		(1)		54
Intelligent Edge	38		51		67		60		216		24		36		53		46		159		14		15		14		14		57
Financial Services	79		79		77		75		310		77		77		77		74		305		2		2		—		1		5
Corporate Investments and Other	(88)		(82)		(68)		(76)		(314)		(28)		(29)		(25)		(26)		(108)		(60)		(53)		(43)		(50)		(206)
Total segment earnings from operations	794		772		838		901		3,305		733		713		793		857		3,096		61		59		45		44		209
Unallocated corporate costs and eliminations	(50)		(64)		(65)		(107)		(286)		(50)		(64)		(65)		(107)		(286)		—		—		—		—		—
Stock-based compensation expense(b)	(75)		(74)		(58)		(61)		(268)		(14)		(15)		(13)		(17)		(59)		(61)		(59)		(45)		(44)		(209)
Amortization of intangible assets	(72)		(69)		(58)		(68)		(267)		(72)		(69)		(58)		(68)		(267)		—		—		—		—		—
Transformation costs	(78)		(54)		(170)		(151)		(453)		(78)		(54)		(170)		(151)		(453)		—		—		—		—		—
Disaster recoveries	—		7		—		—		7		—		7		—		—		7		—		—		—		—		—
Acquisition, disposition and other related charges	(63)		(84)		(563)		(54)		(764)		(63)		(84)		(563)		(54)		(764)		—		—		—		—		—
Interest and other, net	(51)		(18)		(70)		(38)		(177)		(51)		(18)		(70)		(38)		(177)		—		—		—		—		—
Tax indemnification adjustments	219		4		(134)		288		377		219		4		(134)		288		377		—		—		—		—		—
Non-service net periodic benefit credit	16		17		12		14		59		16		17		12		14		59		—		—		—		—		—
Earnings from equity interests	15		3		3		(1)		20		15		3		3		(1)		20		—		—		—		—		—
Total HPE consolidated earnings before taxes	$	655	$	440	$	(265)	$	723	$	1,553	$	655	$	440	$	(265)	$	723	$	1,553	$	—	$	—	$	—	$	—	$	—

HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES

FISCAL 2019 SEGMENT INFORMATION (Revised)

(Unaudited)


	REVISED AMOUNTS										AMOUNTS AS PREVIOUSLY REPORTED										VARIANCE
	Three months ended								Twelve months ended		Three months ended								Twelve months ended		Three months ended								Twelve months ended
	Jan. 31, 2019		Apr. 30, 2019		Jul. 31, 2019		Oct. 31, 2019		Oct. 31, 2019		Jan. 31, 2019		Apr. 30, 2019		Jul. 31, 2019		Oct. 31, 2019		Oct. 31, 2019		Jan. 31, 2019		Apr. 30, 2019		Jul. 31, 2019		Oct. 31, 2019		Oct. 31, 2019
Segment operating margin:(a)
Compute	10.7	%	10.5	%	13.9	%	15.0	%	12.5	%	9.5	%	9.3	%	12.9	%	13.9	%	11.4	%	1.2	pts	1.2	pts	1.0	pts	1.1	pts	1.1	pts
HPC & MCS	13.7	%	14.1	%	9.2	%	11.6	%	12.2	%	12.6	%	12.8	%	8.1	%	10.2	%	11.0	%	1.1	pts	1.3	pts	1.1	pts	1.4	pts	1.2	pts
Storage	19.7	%	20.1	%	17.8	%	19.1	%	19.2	%	18.7	%	18.5	%	16.5	%	17.4	%	17.8	%	1.0	pts	1.6	pts	1.3	pts	1.7	pts	1.4	pts
A & PS	—	%	—	%	—	%	—	%	—	%	(13.3)	%	(5.4)	%	(3.7)	%	0.4	%	(5.3)	%	13.3	pts	5.4	pts	3.7	pts	(0.4	pts)	5.3	pts
Intelligent Edge	5.4	%	7.4	%	8.6	%	8.1	%	7.4	%	3.4	%	5.3	%	6.8	%	6.2	%	5.5	%	2.0	pts	2.1	pts	1.8	pts	1.9	pts	1.9	pts
Financial Services	8.6	%	8.8	%	8.7	%	8.5	%	8.7	%	8.4	%	8.6	%	8.7	%	8.4	%	8.5	%	0.2	pts	0.2	pts	—	pts	0.1	pts	0.2	pts
Corporate Investments and Other	(28.9)	%	(25.3)	%	(21.4)	%	(22.3)	%	(24.4)	%	(23.7)	%	(23.2)	%	(19.2)	%	(19.4)	%	(21.3)	%	(5.2	pts)	(2.1	pts)	(2.2	pts)	(2.9	pts)	(3.1	pts)
Total segment operating margin	10.3	%	10.5	%	11.4	%	12.2	%	11.1	%	9.5	%	9.7	%	10.8	%	11.6	%	10.4	%	0.8	pts	0.8	pts	0.6	pts	0.6	pts	0.7	pts

HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES

FISCAL 2020 SEGMENT INFORMATION (Revised)

(Unaudited)

(In millions)


	REVISED AMOUNTS										AMOUNTS AS PREVIOUSLY REPORTED										VARIANCE
	Three months ended								Twelve months ended		Three months ended								Twelve months ended		Three months ended								Twelve months ended
	Jan. 31, 2020		Apr. 30, 2020		Jul. 31, 2020		Oct. 31, 2020		Oct. 31, 2020		Jan. 31, 2020		Apr. 30, 2020		Jul. 31, 2020		Oct. 31, 2020		Oct. 31, 2020		Jan. 31, 2020		Apr. 30, 2020		Jul. 31, 2020		Oct. 31, 2020		Oct. 31, 2020
Net revenue: (a)
Compute	$	3,030	$	2,655	$	3,409	$	3,191	$	12,285	$	3,011	$	2,640	$	3,389	$	3,175	$	12,215	$	19	$	15	$	20	$	16	$	70
HPC & MCS	839		607		667		992		3,105		823		589		649		975		3,036		16		18		18		17		69
Storage	1,252		1,086		1,132		1,215		4,685		1,250		1,086		1,128		1,217		4,681		2		—		4		(2)		4
A & PS	—		—		—		—		—		243		237		226		245		951		(243)		(237)		(226)		(245)		(951)
Intelligent Edge	720		665		684		786		2,855		720		665		684		786		2,855		—		—		—		—		—
Financial Services	859		833		811		849		3,352		859		833		811		849		3,352		—		—		—		—		—
Corporate Investments and Other	327		328		303		340		1,298		121		124		119		126		490		206		204		184		214		808
Total segments	7,027		6,174		7,006		7,373		27,580		7,027		6,174		7,006		7,373		27,580		—		—		—		—		—
Elimination of intersegment net revenue	(78)		(165)		(190)		(165)		(598)		(78)		(165)		(190)		(165)		(598)		—		—		—		—		—
Total HPE consolidated net revenue	$	6,949	$	6,009	$	6,816	$	7,208	$	26,982	$	6,949	$	6,009	$	6,816	$	7,208	$	26,982	$	—	$	—	$	—	$	—	$	—
Earnings before taxes: (a)
Compute	$	324	$	155	$	318	$	210	$	1,007	$	286	$	125	$	288	$	194	$	893	$	38	$	30	$	30	$	16	$	114
HPC & MCS	63		46		47		129		285		49		33		36		119		237		14		13		11		10		48
Storage	251		171		170		221		813		226		145		145		203		719		25		26		25		18		94
A & PS	—		—		—		—		—		(2)		2		(4)		(1)		(5)		2		(2)		4		1		5
Intelligent Edge	87		82		71		97		337		70		73		59		79		281		17		9		12		18		56
Financial Services	75		77		66		66		284		73		75		65		65		278		2		2		1		1		6
Corporate Investments and Other	(53)		(51)		(68)		(34)		(206)		(27)		(28)		(27)		(18)		(100)		(26)		(23)		(41)		(16)		(106)
Total segment earnings from operations	747		480		604		689		2,520		675		425		562		641		2,303		72		55		42		48		217
Unallocated corporate costs and eliminations	(52)		(48)		(65)		(73)		(238)		(52)		(48)		(65)		(73)		(238)		—		—		—		—		—
Stock-based compensation expense(b)	(93)		(67)		(55)		(59)		(274)		(21)		(12)		(13)		(11)		(57)		(72)		(55)		(42)		(48)		(217)
Amortization of initial direct cost	(3)		(3)		(3)		(1)		(10)		(3)		(3)		(3)		(1)		(10)		—		—		—		—		—
Amortization of intangible assets	(120)		(84)		(95)		(80)		(379)		(120)		(84)		(95)		(80)		(379)		—		—		—		—		—
Transformation costs	(89)		(200)		(357)		(304)		(950)		(89)		(200)		(357)		(304)		(950)		—		—		—		—		—
Disaster charges	—		(22)		(2)		(2)		(26)		—		(22)		(2)		(2)		(26)		—		—		—		—		—
Acquisition, disposition and other related charges	(42)		(25)		(15)		(25)		(107)		(42)		(25)		(15)		(25)		(107)		—		—		—		—		—
Impairment of goodwill	—		(865)		—		—		(865)		—		(865)		—		—		(865)		—		—		—		—		—
Interest and other, net	(19)		(68)		(71)		(57)		(215)		(19)		(68)		(71)		(57)		(215)		—		—		—		—		—
Tax indemnification adjustments	(21)		(35)		(30)		(15)		(101)		(21)		(35)		(30)		(15)		(101)		—		—		—		—		—
Non-service net periodic benefit credit	37		36		28		35		136		37		36		28		35		136		—		—		—		—		—
Earnings (loss) from equity interests	33		(10)		27		17		67		33		(10)		27		17		67		—		—		—		—		—
Total HPE consolidated earnings (loss) before taxes	$	378	$	(911)	$	(34)	$	125	$	(442)	$	378	$	(911)	$	(34)	$	125	$	(442)	$	—	$	—	$	—	$	—	$	—

HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES

FISCAL 2020 SEGMENT INFORMATION (Revised)

(Unaudited)


	REVISED AMOUNTS										AMOUNTS AS PREVIOUSLY REPORTED										VARIANCE
	Three months ended								Twelve months ended		Three months ended								Twelve months ended		Three months ended								Twelve months ended
	Jan. 31, 2020		Apr. 30, 2020		Jul. 31, 2020		Oct. 31, 2020		Oct. 31, 2020		Jan. 31, 2020		Apr. 30, 2020		Jul. 31, 2020		Oct. 31, 2020		Oct. 31, 2020		Jan. 31, 2020		Apr. 30, 2020		Jul. 31, 2020		Oct. 31, 2020		Oct. 31, 2020
Segment operating margin:(a)
Compute	10.7	%	5.8	%	9.3	%	6.6	%	8.2	%	9.5	%	4.7	%	8.5	%	6.1	%	7.3	%	1.2	pts	1.1	pts	0.8	pts	0.5	pts	0.9	pts
HPC & MCS	7.5	%	7.6	%	7.0	%	13.0	%	9.2	%	6.0	%	5.6	%	5.5	%	12.2	%	7.8	%	1.5	pts	2.0	pts	1.5	pts	0.8	pts	1.4	pts
Storage	20.0	%	15.7	%	15.0	%	18.2	%	17.4	%	18.1	%	13.4	%	12.9	%	16.7	%	15.4	%	1.9	pts	2.3	pts	2.1	pts	1.5	pts	2.0	pts
A & PS	—	%	—	%	—	%	—	%	—	%	(0.8)	%	0.8	%	(1.8)	%	(0.4)	%	(0.5)	%	0.8	pts	(0.8	pts)	1.8	pts	0.4	pts	0.5	pts
Intelligent Edge	12.1	%	12.3	%	10.4	%	12.3	%	11.8	%	9.7	%	11.0	%	8.6	%	10.1	%	9.8	%	2.4	pts	1.3	pts	1.8	pts	2.2	pts	2.0	pts
Financial Services	8.7	%	9.2	%	8.1	%	7.8	%	8.5	%	8.5	%	9.0	%	8.0	%	7.7	%	8.3	%	0.2	pts	0.2	pts	0.1	pts	0.1	pts	0.2	pts
Corporate Investments and Other	(16.2)	%	(15.5)	%	(22.4)	%	(10.0)	%	(15.9)	%	(22.3)	%	(22.6)	%	(22.7)	%	(14.3)	%	(20.4)	%	6.1	pts	7.1	pts	0.3	pts	4.3	pts	4.5	pts
Total segment operating margin	10.6	%	7.8	%	8.6	%	9.3	%	9.1	%	9.6	%	6.9	%	8.0	%	8.7	%	8.4	%	1.0	pts	0.9	pts	0.6	pts	0.6	pts	0.7	pts

HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES

REVISED RECONCILIATION OF GAAP TO NON-GAAP MEASURES

(Unaudited)

(In millions, except percentages and per share amounts)



	Three months ended January 31, 2019			Diluted net earnings per share		Three months ended April 30, 2019			Diluted net earnings per share		Three months ended July 31, 2019			Diluted net earnings per share		Three months ended October 31, 2019			Diluted net earnings per share
GAAP net earnings (loss)	$	177		$	0.13	$	419		$	0.30	$	(27)		$	(0.02)	$	480		$	0.36

Non-GAAP adjustments:
Amortization of intangible assets	72			0.05		69			0.05		58			0.04		68			0.05
Transformation costs	78			0.06		54			0.04		170			0.13		151			0.11
Disaster recovery	—			—		(7)			(0.01)		—			—		—			—
Stock-based compensation expense(b)	75			0.05		74			0.05		58			0.04		61			0.05
Acquisition, disposition and other related charges	63			0.04		84			0.06		563			0.42		54			0.04
Tax indemnification adjustments	(219)			(0.16)		(4)			—		134			0.10		(288)			(0.22)
Non-service net periodic benefit credit	(16)			(0.01)		(17)			(0.01)		(12)			(0.01)		(14)			(0.01)
Earnings from equity interests	38			0.03		38			0.03		38			0.03		38			0.03
Adjustments for taxes	388			0.27		(66)			(0.04)		(328)			(0.24)		148			0.12
Non-GAAP net earnings	$	656		$	0.46	$	644		$	0.47	$	654		$	0.49	$	698		$	0.53

GAAP earnings (loss) from operations	$	456				$	434				$	(76)				$	460

Non-GAAP adjustments:
Amortization of intangible assets	72					69					58					68
Transformation costs	78					54					170					151
Disaster recovery	—					(7)					—					—
Stock-based compensation expense(b)	75					74					58					61
Acquisition, disposition and other related charges	63					84					563					54
Non-GAAP earnings from operations	$	744				$	708				$	773				$	794

GAAP operating profit margin	6.0		%			6.1		%			(1.1)		%			6.4		%
Non-GAAP adjustments	3.9		%			3.8		%			11.8		%			4.6		%
Non-GAAP operating profit margin	9.9		%			9.9		%			10.7		%			11.0		%

HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES

REVISED RECONCILIATION OF GAAP TO NON-GAAP MEASURES

(Unaudited)

(In millions, except percentages and per share amounts)


	Three months ended
	January 31, 2019			April, 30, 2019			July 31, 2019			October 31, 2019
GAAP net revenue	$	7,553		$	7,150		$	7,217		$	7,215
GAAP cost of sales	5,207			4,845			4,768			4,822
GAAP gross profit	$	2,346		$	2,305		$	2,449		$	2,393

Non-GAAP adjustments

Stock-based compensation expense(b)	$	12		$	11		$	7		$	7
Acquisition, disposition and other related charges	—			—			—			7
Non-GAAP gross profit	$	2,358		$	2,316		$	2,456		$	2,407

GAAP gross profit margin	31.1		%	32.2		%	33.9		%	33.2		%
Non-GAAP adjustments	0.1		%	0.2		%	0.1		%	0.2		%
Non-GAAP gross profit margin	31.2		%	32.4		%	34.0		%	33.4		%

HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES

REVISED RECONCILIATION OF GAAP TO NON-GAAP MEASURES

(Unaudited)

(In millions, except percentages and per share amounts)



	Three months ended January 31, 2020			Diluted net earnings per share		Three months ended April 30, 2020			Diluted net earnings per share		Three months ended July 31, 2020			Diluted net earnings per share		Three months ended October 31, 2020			Diluted net earnings per share
GAAP net earnings (loss)	$	333		$	0.25	$	(821)		$	(0.64)	$	9		$	0.01	$	157		$	0.12

Non-GAAP adjustments:
Amortization of initial direct costs	3			—		3			—		3			—		1			—
Amortization of intangible assets	120			0.09		84			0.07		95			0.07		80			0.06
Impairment of goodwill	—			—		865			0.67		—			—		—			—
Transformation costs	89			0.07		200			0.15		357			0.27		304			0.23
Disaster charges	—			—		22			0.02		2			—		2			—
Stock-based compensation expense(b)	93			0.07		67			0.05		55			0.04		59			0.05
Acquisition, disposition and other related charges	42			0.03		25			0.02		15			0.01		25			0.02
Tax indemnification adjustments	21			0.02		35			0.03		30			0.03		15			0.02
Non-service net periodic benefit credit	(37)			(0.03)		(36)			(0.03)		(28)			(0.02)		(35)			(0.03)
Earnings from equity interests	37			0.03		37			0.03		36			0.03		35			0.03
Adjustments for taxes	(44)			(0.03)		(137)			(0.10)		(107)			(0.08)		(106)			(0.09)
Non-GAAP net earnings	$	657		$	0.50	$	344		$	0.27	$	467		$	0.36	$	537		$	0.41

GAAP earnings (loss) from operations	$	348				$	(834)				$	12				$	145

Non-GAAP adjustments:
Amortization of initial direct costs	3					3					3					1
Amortization of intangible assets	120					84					95					80
Impairment of goodwill	—					865					—					—
Transformation costs	89					200					357					304
Disaster charges	—					22					2					2
Stock-based compensation expense(b)	93					67					55					59
Acquisition, disposition and other related charges	42					25					15					25
Non-GAAP earnings from operations	$	695				$	432				$	539				$	616

GAAP operating profit margin	5.0		%			(13.9)		%			0.2		%			2.0		%
Non-GAAP adjustments	5.0		%			21.1		%			7.7		%			6.5		%
Non-GAAP operating profit margin	10.0		%			7.2		%			7.9		%			8.5		%

HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES

REVISED RECONCILIATION OF GAAP TO NON-GAAP MEASURES

(Unaudited)

(In millions, except percentages and per share amounts)


	Three months ended
	January 31, 2020			April, 30, 2020			July 31, 2020			October 31, 2020
GAAP net revenue	$	6,949		$	6,009		$	6,816		$	7,208
GAAP cost of sales	4,667			4,095			4,749			5,002
GAAP gross profit	$	2,282		$	1,914		$	2,067		$	2,206

Non-GAAP adjustments
Amortization of initial direct costs	$	3		$	3		$	3		$	1
Stock-based compensation expense(b)	13			9			8			7
Acquisition, disposition and other related charges	20			7			—			—
Non-GAAP gross profit	$	2,318		$	1,933		$	2,078		$	2,214

GAAP gross profit margin	32.8		%	31.9		%	30.3		%	30.6		%
Non-GAAP adjustments	0.6		%	0.3		%	0.2		%	0.1		%
Non-GAAP gross profit margin	33.4		%	32.2		%	30.5		%	30.7		%

HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES

REVISED RECONCILIATION OF GAAP TO NON-GAAP MEASURES

(Unaudited)

(In millions, except percentages and per share amounts)



	Twelve months ended October 31, 2020			Diluted net earnings per share		Twelve months ended October 31, 2019			Diluted net earnings per share
GAAP net earnings (loss)	$	(322)		$	(0.25)	$	1,049		$	0.77

Non-GAAP adjustments:
Amortization of initial direct costs	10			0.01		—			—
Amortization of intangible assets	379			0.29		267			0.20
Impairment of goodwill	865			0.67		—			—
Transformation costs	950			0.74		453			0.33
Disaster charges (recovery)	26			0.02		(7)			(0.01)
Stock-based compensation expense(b)	274			0.21		268			0.20
Acquisition, disposition and other related charges	107			0.08		764			0.56
Tax indemnification adjustments	101			0.08		(377)			(0.28)
Non-service net periodic benefit credit	(136)			(0.11)		(59)			(0.04)
Earnings from equity interests	145			0.11		152			0.11
Adjustments for taxes	(394)			(0.31)		142			0.10
Non-GAAP net earnings	$	2,005		$	1.54	$	2,652		$	1.94

GAAP earnings (loss) from operations	$	(329)				$	1,274

Non-GAAP adjustments:
Amortization of initial direct costs	10					—
Amortization of intangible assets	379					267
Impairment of goodwill	865					—
Transformation costs	950					453
Disaster charges (recovery)	26					(7)
Stock-based compensation expense(b)	274					268
Acquisition, disposition and other related charges	107					764
Non-GAAP earnings from operations	$	2,282				$	3,019

GAAP operating profit margin	(1.2)		%			4.4		%
Non-GAAP adjustments	9.7		%			6.0		%
Non-GAAP operating profit margin	8.5		%			10.4		%

HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES

REVISED RECONCILIATION OF GAAP TO NON-GAAP MEASURES

(Unaudited)

(In millions, except percentages and per share amounts)


	Twelve months ended October 31,
	2020			2019
GAAP net revenue	$	26,982		$	29,135
GAAP cost of sales	18,513			19,642
GAAP gross profit	$	8,469		$	9,493

Non-GAAP adjustments
Amortization of initial direct costs	$	10		$	—
Stock-based compensation expense(b)	37			37
Acquisition, disposition and other related charges	27			7
Non-GAAP gross profit	$	8,543		$	9,537

GAAP gross profit margin	31.4		%	32.6		%
Non-GAAP adjustments	0.3		%	0.1		%
Non-GAAP gross profit margin	31.7		%	32.7		%

(a) Effective at the beginning of the first quarter of fiscal 2021, Hewlett Packard Enterprise Company ("the Company") implemented certain organizational changes to align its segment financial reporting more closely with its current business structure. These organizational changes are: (i) the transfer of the lifecycle event services business, previously reported within the Advisory and Professional Services ("A & PS") reportable segment to Compute, Storage and HPC & MCS reportable segments; (ii) the transfer of certain software and related services business, previously reported within the Compute, Storage and A & PS reportable segments to the Corporate Investments and Other reportable segment, to form a new Software operating segment; and (iii) the transfer of remaining A & PS operating segment, previously reported as a separate reportable segment, to the Corporate Investments and Other reportable segment. As a result of these changes, the Corporate Investments and Other Segment now includes the A & PS operating segment, the Communications and Media Solutions operating segment, the Software operating segment, and the Hewlett Packard Enterprise Labs which is responsible for research and development.

The Company reflected these changes to its segment information retrospectively to the fiscal 2019 and 2020 financial results, which primarily resulted in the transfer of net revenue and operating profit for each of the businesses as described above. These changes had no impact on Hewlett Packard Enterprise's previously reported consolidated results.

(b) Effective at the beginning of the first quarter of fiscal 2021, the Company excluded stock-based compensation expense from its segment earnings from operations results and excluded stock-based compensation expense from non-GAAP results. The Company has reflected this change retrospectively to the fiscal 2019 and 2020 financial results. This change had no impact on Hewlett Packard Enterprise's previously reported consolidated GAAP results. However, the Company reflected the change resulting from the reclassification of its stock-based compensation expense by restating its consolidated non-GAAP gross profit, non-GAAP gross profit margin, non-GAAP earnings from operations, non-GAAP operating profit margin, non-GAAP net earnings and non-GAAP net earnings per share. Each restated non-GAAP measure has been reconciled to the most directly comparable GAAP measure herein.

Dates Referenced Herein and Documents Incorporated by Reference

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Hewlett Packard Enterprise Co. – ‘8-K’ for 2/4/21 – ‘EX-99.1’

On: Thursday, 2/4/21, at 4:20pm ET · For: 2/4/21 · Accession #: 1645590-21-4 · File #: 1-37483

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‘EX-99.1’ — Miscellaneous Exhibit

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Dates Referenced Herein and Documents Incorporated by Reference

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