Hewlett Packard Enterprise (HPE) 10-K risk factor changes: FY2020 vs FY2019

[removed: We must make long-term investments, develop or obtain and protect appropriate intellectual] property, and commit significant research and development and other resources before knowing whether our predictions will accurately reflect customer demand for our products, services and solutions.

Companies with whom we have [removed: alliances] [added: vertical relationships] in certain areas may be or become our competitors in other areas.

In addition, companies with whom we have [removed: alliances] [added: vertical relationships] also may acquire or form [removed: alliances] [added: relationships] with our competitors, which could reduce their business with us.

If we are unable to effectively manage these complicated relationships with [removed: alliance] [added: vertical] partners, our business and results of operations could be adversely affected.

Because our business model is based on providing innovative and high-quality [removed: products,] [added: products and services,] we may spend a proportionately greater amount of our revenues on research and development than some of our competitors.

For example, our Storage business unit is experiencing the effects of a market transition towards [removed: converged products] [added: software defined] and [removed: solutions,] [added: public cloud,] which has led to a decline in demand for our traditional storage products.

We must manage both owned and channel inventory effectively, particularly with respect to sales to distributors, which involves forecasting [added: demand and pricing challenges.]

Moreover, our use of indirect distribution channels may limit our willingness or ability to adjust prices quickly and [removed: otherwise to respond to pricing changes by competitors.]

Sales outside the United States constituted approximately [removed: 67%] [added: 66%] of our net revenue in fiscal [removed: 2019.][added: 2020.]

[removed: | • |] [added: -] ongoing instability or changes in a country's or region's economic or political conditions, including inflation, recession, interest rate fluctuations and actual or anticipated military or political conflicts, including uncertainties and instability in economic and market conditions caused by the [removed: United Kingdom’s vote to exit the European Union; |][added: COVID-19 pandemic;]

[removed: | • |] [added: -] longer collection cycles and financial instability among customers; [removed: |]

[removed: | • |] [added: -] trade regulations and procedures and actions affecting production, pricing and marketing of products, including policies adopted by countries that may champion or otherwise favor domestic companies and technologies over foreign competitors, [removed: or] [added: U.S. export controls and sanctions, and] federal and state tax reforms; [removed: |]

[removed: | • |] [added: -] local labor conditions and regulations, including local labor issues faced by specific suppliers and original equipment manufacturers ("OEMs"), or changes to immigration and labor law policies which may adversely impact our access to technical and professional talent; [removed: |]

[removed: | • |] [added: -] managing our geographically dispersed workforce; [removed: |]

[removed: | • |] [added: -] changes in the international, national or local regulatory and legal environments; [removed: |]

[removed: | • |] [added: -] differing technology standards or customer requirements; [removed: |]

[removed: | • |] [added: -] import, export or other business licensing requirements or requirements relating to making foreign direct investments, which could increase our cost of doing business in certain jurisdictions, prevent us from shipping products to particular countries or markets, affect our ability to obtain favorable terms for components, increase our operating costs or lead to penalties or restrictions; [removed: |]

[removed: | • |] [added: -] difficulties associated with repatriating earnings in restricted countries, and changes in tax laws; and [removed: |]

[removed: | • |] [added: -] fluctuations in freight costs, limitations on shipping and receiving capacity, and other disruptions in the transportation and shipping infrastructure at important geographic points of exit and entry for our products and shipments. [removed: |]

In many foreign countries, particularly in those with developing economies, [removed: there are companies that] [added: people may] engage in business practices prohibited by [added: anti-corruption] laws [removed: and regulations applicable to us,] such as the [added: U.S.] Foreign Corrupt Practices Act [removed: of 1977, as amended (the "FCPA").][added: and the U.K. Bribery Act.]

Although we implement policies, procedures and training designed to facilitate compliance with these laws, our [removed: employees, contractors] [added: employees] and [removed: agents, as well as those of the companies to which] [added: third parties] we [removed: outsource certain of our business operations,] [added: work with] may take actions in violation of our [removed: policies.][added: policies, and those actions could have an adverse effect on our business and reputation.]

We depend on third-party suppliers, and our financial results could suffer if we fail to manage our [removed: suppliers] [added: supplier relationships] properly.

[added: -] *Component shortages.* We may experience a shortage of, or a delay in receiving, certain components as a result of strong demand, capacity constraints, supplier financial weaknesses, the inability of suppliers to borrow funds in the credit markets, disputes with suppliers (some of whom are also our customers), disruptions in the operations of component suppliers, other problems experienced by suppliers or problems faced during the transition to new suppliers.

[removed: | • |] [added: -] *Excess supply.* In order to secure components for our products or services, at times we may make advance payments to suppliers or enter into non-cancelable commitments with vendors. [removed: In addition, we may purchase components strategically in advance of demand to take advantage of favorable pricing or to address concerns about the availability of future components. If we fail to anticipate customer demand properly, a temporary oversupply could result in excess or obsolete components, which could adversely affect our business and financial performance. |]

[removed: | • |] [added: -] *Contractual terms.* As a result of binding long-term price or purchase commitments with vendors, we may be obligated to purchase components or services at prices that are higher than those available in the current market and be limited in our ability to respond to changing market conditions. [removed: If we commit to purchasing components or services for prices in excess of the then-current market price, we may be at a disadvantage to competitors who have access to components or services at lower prices, our gross margin could suffer, and we could incur additional charges relating to inventory obsolescence. Any of these developments could adversely affect our future results of operations and financial condition. |]

[removed: | • |] [added: -] *Contingent workers.* We also rely on third-party suppliers for the provision of contingent workers, and our failure to manage our use of such workers effectively could adversely affect our results of operations. [removed: We have been exposed to various legal claims relating to the status of contingent workers in the past and could face similar claims in the future. We may be subject to shortages, oversupply or fixed contractual terms relating to contingent workers. Our ability to manage the size of, and costs associated with, the contingent workforce may be subject to additional constraints imposed by local laws. |]

Our worldwide operations [added: and supply chain] could be disrupted by natural or human induced disasters including, but not limited to, [removed: earthquakes, tsunamis, floods,] [added: earthquakes; tsunamis; floods;] hurricanes, [removed: typhoons, fires,] [added: cyclones or typhoons; fires; other] extreme weather [removed: conditions,] [added: conditions;] power or water [removed: shortages,] [added: shortages;] telecommunications [removed: failures,] [added: failures;] materials scarcity and price [removed: volatility,] [added: volatility; terrorist acts, conflicts or wars;] and medical epidemics or pandemics.

We are predominantly self-insured to mitigate the [added: impact of most catastrophic events.]

[removed: Therefore,] [added: Although it is impossible to completely predict the occurrences or consequences of any such events,] forecasting disruptive events and building additional resiliency into our operations accordingly will become an increasing business imperative.

The occurrence of business disruptions could result in significant losses, seriously harm our revenue, profitability and financial condition, adversely affect our competitive position, increase our costs and expenses, [added: decrease in demand for our products, make it difficult or impossible to provide services or deliver products to our customers or to receive components from our suppliers, create delays] and [added: inefficiencies in our supply chain, result in the need to impose employee travel restrictions and] require substantial expenditures and recovery time in order to fully resume operations.

Since then, HPE has increased its resiliency through site selection [removed: and] infrastructure [added: technological] investments to mitigate [added: and adapt to] physical risks from climate change.

The manufacture of product components, the final assembly of our products and other critical operations are concentrated in certain geographic locations, including the [added: United States,] Czech Republic, Mexico, China and Singapore.

[removed: This uneven sales pattern makes predicting revenue, earnings,] cash flow from operations and working capital for each financial period difficult, increases the risk of unanticipated variations in our quarterly results and financial condition and places pressure on our inventory management and logistics systems.

[removed: Changes in U.S.] [added: U.S.] trade policy, including the imposition of tariffs and the resulting consequences, may have a material adverse impact on our business and results of operations.

[removed: It has also imposed] [added: Current U.S. government trade policy includes the imposition of] tariffs on certain foreign goods, including information and communication technology products.

[removed: Changes in] U.S. [removed: Trade] [added: government trade] policy [removed: have] [added: has] resulted in, and could result in more, U.S. trading partners adopting responsive trade policy making it more difficult or costly for us to export our products to those countries.

Any failure by us to identify, manage and complete [removed: acquisitions,] [added: acquisitions and subsequent integrations,] divestitures and other significant transactions successfully could harm our financial results, business and prospects.

As part of our [removed: business] strategy, we may acquire [removed: companies or] businesses, divest businesses or assets, enter into strategic alliances and joint [removed: ventures] [added: ventures,] and make investments to further our [removed: business] [added: business,] (collectively, "business combination and investment [removed: transactions").][added: transactions") and handle any post-closing issues such as integration.]

For example, in September [added: 2020, we acquired Silver Peak Systems, Inc., an SD-WAN industry leader and in September] 2019, we acquired Cray Inc., a global supercomputer leader.

[removed: On] [added: In] April [removed: 1,] 2017 and September [removed: 1,] 2017, we spun off our Enterprise Services and Software businesses, respectively.

Business and Operational Risks

We are unable to predict the extent to which the global COVID-19 pandemic may adversely impact our business operations, financial performance and results of operations.

The COVID-19 pandemic and efforts to control its spread have significantly curtailed the movement of people, goods and services worldwide, including in most or all of the regions in which we sell our products and services and conduct our business operations.

The pandemic has resulted in a global slowdown of economic activity, including travel restrictions, prohibitions of non-essential activities in some cases, disruption and shutdown of businesses and greater uncertainty in global financial markets.

Our operations have been affected by a range of external factors related to the COVID-19 pandemic that are not within our control, including the various restrictions imposed by cities, counties, states and countries on our employees, customers, partners and suppliers designed to limit the spread of COVID-19.

Although the immediate impacts of the COVID-19 pandemic have been assessed, the long-term magnitude and duration of the disruption and resulting decline in business activity is still highly uncertain and cannot currently be predicted.

In response to the COVID-19 pandemic and to ensure the safety of our employees, we have implemented a global work-from-home policy until further notice that applies to a significant majority of our employees, with the exception of those performing essential activities.

Our employees may elect to return to the office in jurisdictions where both local requirements and our own health and safety standards have been met.

If such instances occur, employees would return to the office in a phased process.

Moreover, certain industry and customer events that we sponsor or at which we present have been canceled, postponed or moved to virtual-only experiences and we may deem it advisable to similarly alter, postpone or cancel entirely additional events in the future.

We are also seeing an increase in customer requirements for HPE employees to be tested for COVID-19 before being able to enter customer sites, which could potentially present an operational challenge.

However, work-from-home and other modified business practices introduce additional operational risks, including cybersecurity risks, which may result in inefficiencies or delays, and have affected the way we conduct our product development, sales, customer support and other activities.

Unanticipated disruptions in services provided through our localized physical infrastructure caused by the COVID-19 pandemic can curtail the functioning of critical components of our IT systems, and adversely affect our ability to fulfill orders, provide services, respond to customer requests and maintain our worldwide business operations.

The pandemic has adversely affected, and could continue to adversely affect, our business, by negatively impacting the demand for our products and services; restricting our operations and sales, marketing and distribution efforts; disrupting the supply chains of hardware products; and disrupting our research and development capabilities, engineering, design and manufacturing processes and other important business activities.

For example, we expect the conditions caused by the COVID-19 pandemic could affect the rate of IT spending, impact our customers' ability or willingness to purchase our products and services, delay prospective customers' purchasing decisions, delay the provisioning of our products and services, lengthen payment terms, reduce the value or duration of subscription contracts or affect attrition rates, all of which could adversely affect our sales, operating results and financial performance.

There have been, and likely will continue to be, delays of components shipments from our vendors in China and other jurisdictions in which normal business operations are disrupted.

We expect the COVID-19 pandemic could continue to have a negative impact on our sales and our results of operations, the size and duration of which we are currently unable to predict.

While such changes were factored into the forecast used to assess assets for reserves and impairment, including goodwill, and to calculate the annualized effective tax rate during the interim quarters of fiscal 2020, any changes to the profitability for the next fiscal year could impact the realizability of assets and the annualized effective tax rate applied to earnings.

Additionally, concerns over the economic impact of the COVID-19 pandemic have caused extreme volatility in financial and other capital markets which has and may continue to adversely impact our stock price, our ability to access capital markets and our ability to fund liquidity needs.

In response, we announced our long-term cost optimization and prioritization plan to focus our investments and realign our workforce to areas of growth combined with short-term cost saving measures, including temporary base salary adjustments or unpaid leave for certain employees and hiring and salary freezes.

Execution of the plan may not achieve the results and savings we anticipate and our temporary cost saving measures may negatively affect employee morale and our future recruiting efforts.

To the extent the COVID-19 pandemic adversely affects our business and financial results, it may also have the effect of heightening many of the other risks described in this "Risk Factors" section and those incorporated by reference herein, such as

those related to our products and services, demand and distribution, financial performance, credit rating and debt obligations.

Given that developments concerning the COVID-19 pandemic have been constantly evolving, additional impacts and risks may arise that we are not aware of or able to appropriately respond to at this time.

Given the change in the U.S. presidential administration, we face uncertainty with regard to U.S. government trade policy.

In addition, we may purchase components strategically in advance of demand to take advantage of favorable pricing or to address concerns about the availability of future components.

If we fail to anticipate customer demand properly, a temporary oversupply could result in excess or obsolete components, which could adversely affect our business and financial performance.

If we commit to purchasing components or services for prices in excess of the then-current market price, we may be at a disadvantage to competitors who have access to components or services at lower prices, our gross margin could suffer, and we could incur additional charges relating to inventory obsolescence.

Any of these developments could adversely affect our future results of operations and financial condition.

We have been exposed to various legal claims relating to the status of contingent workers in the past and could face similar claims in the future.

We may be subject to shortages, oversupply or fixed contractual terms relating to contingent workers.

Our ability to manage the size of, and costs associated with, the contingent workforce may be subject to additional constraints imposed by local laws.

- *Single-source suppliers.* We obtain certain components from single-source suppliers due to technology, availability, price, quality, scale or customization needs.

Replacing a single-source supplier could delay production of some products as replacement suppliers may initially be unable to meet demand or be subject to other output limitations.

For some components, such as customized components, alternative sources either may not exist or may be unable to produce the quantities of those components necessary to satisfy our production requirements.

In addition, we sometimes purchase components from single-source suppliers under short-term agreements that contain favorable pricing and other terms but that may be unilaterally modified or terminated by the supplier with limited notice and with little or no penalty.

The performance of such single-source suppliers under those agreements (and the renewal or extension of those agreements upon similar terms) may affect the quality, quantity and price of our components.

The loss of a single-source supplier, the deterioration of our relationship with a single-source supplier or any unilateral modification to the contractual terms under which we are supplied components by a single-source supplier could adversely affect our business and financial performance.

Provisions such as indemnification, meeting

We must make long-term investments, develop or obtain and protect appropriate intellectual

Risks Related to Our Business

For example, the development of cloud-based solutions has reduced demand for some of our existing hardware products.

demand and pricing challenges.

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Any such violation, even if prohibited by our policies, could have an adverse effect on our business and reputation.

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| • | *Single-source suppliers.* We obtain a significant number of components from single sources due to technology, availability, price, quality, scale or customization needs. Replacing a single-source supplier could delay production of some products as replacement suppliers may be subject to capacity constraints or other output limitations. For some components, such as customized components, alternative sources either may not exist or may be unable to produce the quantities of those components necessary to satisfy our production requirements. In addition, we sometimes purchase components from single-source suppliers under short-term agreements that contain favorable pricing and other terms but that may be unilaterally modified or terminated by the supplier with limited notice and with little or no penalty. The performance of such single-source suppliers under those agreements (and the renewal or extension of those agreements upon similar terms) may affect the quality, quantity and price of our components. The loss of a single-source supplier, the deterioration of our relationship with a single-source supplier or any unilateral modification to the contractual terms under which we are supplied components by a single-source supplier could adversely affect our business and financial performance. |

impact of most catastrophic events.

For example, sales to governments (particularly sales to the U.S. government) are often stronger in the third calendar quarter, and many customers whose fiscal year is the calendar year spend their remaining capital budget authorizations in the fourth calendar quarter prior to new budget constraints in the first calendar quarter of the following year.

European sales are often weaker during the summer months.

Typically, our third fiscal quarter is our weakest and our fourth fiscal quarter is our strongest.

The U.S. government has adopted a new approach to trade policy and in some cases to renegotiate, or potentially terminate, certain existing bilateral or multi-lateral trade agreements.

In May 2016, we completed the sale to Tsinghua Holdings Co., Ltd. ("Tsinghua"), the asset management arm of Tsinghua University in China, of a 51% interest in our wholly owned subsidiary that owns and operates H3C Technologies and our China-based server, storage and technology services businesses for approximately $2.6 billion.

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Financial Condition and Results of [removed: Operations][added: Operations (Continued)]

[removed: This Management's Discussion and Analysis of Financial] [added: Financial] Condition and Results of Operations [removed: ("MD&A") is organized as follows:][added: (Continued)]

[removed: | • | *Overview.*] [added: *•Overview.*] A discussion of our business and overall analysis of financial and other highlights affecting the Company to provide context for the remainder of MD&A. [removed: The overview analysis compares fiscal 2019 to fiscal 2018. |]

[removed: | • |] [added: -] *Critical Accounting Policies and Estimates.* A discussion of accounting policies and estimates that we believe are important to understanding the assumptions and judgments incorporated in our reported financial results. [removed: |]

[removed: | • |] [added: -] *Results of Operations.* An analysis of our financial results comparing fiscal [removed: 2019] [added: 2020] and fiscal [removed: 2018] [added: 2019] to the prior-year periods. [removed: A discussion of the results of operations at the consolidated level is followed by a discussion of the results of operations at the segment level. |]

[removed: | • |] [added: -] *Liquidity and Capital Resources.* An analysis of changes in our cash flows and a discussion of our financial condition and liquidity. [removed: |]

[removed: | • |] [added: -] *Contractual and Other Obligations.* An overview of contractual obligations, retirement and post-retirement benefit plan funding, restructuring plans, uncertain tax positions, off-balance sheet arrangements, cross-indemnifications with HP Inc. (formerly known as "Hewlett-Packard Company" and also referred to in this Annual Report as "former Parent"), and cross-indemnifications with DXC Technology Company ("DXC") and Micro Focus International plc [removed: (“Micro Focus”). |][added: ("Micro Focus").]

On April 1, 2017, HPE completed the separation and merger of its Enterprise Services business with [removed: Computer Sciences Corporation (“CSC”) (collectively,] the [removed: “Everett Transaction”).][added: DXC Technology Company ("DXC", "the Everett Transaction" or "Everett").]

On September 1, 2017, HPE completed the separation and merger of its Software business segment with Micro Focus International plc [removed: (“Micro Focus”) (collectively, the “Seattle Transaction”).][added: ("Micro Focus", "the Seattle Transaction" or "Seattle").]

The following Overview, Results of Operations and Liquidity discussions and analysis compare fiscal [removed: 2019] [added: 2020] to fiscal [removed: 2018] [added: 2019] and fiscal [removed: 2018] [added: 2019] to fiscal [removed: 2017,] [added: 2018,] unless otherwise noted.

The Capital Resources and Contractual and Other Obligations discussions present information as of October 31, [removed: 2019,] [added: 2020,] unless otherwise noted.

*For purposes of [removed: this MD&A] [added: the Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A")] section, we use the terms "Hewlett Packard Enterprise", "HPE", "the Company", "we", "us", and "our" to refer to Hewlett Packard Enterprise Company.

References in [removed: this] [added: the] MD&A section to "former Parent" refer to HP Inc.*

We organize our business into [removed: four] [added: seven] segments for financial reporting purposes: [removed: Hybrid IT,] [added: Compute, High Performance Compute & Mission Critical Systems (HPC & MCS), Storage, Advisory and Professional Services (A & PS),] Intelligent Edge, Financial Services ("FS") and Corporate Investments.

The following provides an overview of our key financial metrics by segment for fiscal [removed: 2019,] [added: 2020,] as compared to fiscal [removed: 2018:][added: 2019:]

| | [added: | |] HPE Consolidated | | | [added: Compute] | [removed: Hybrid IT] | | [added: HPC & MCS] | | [added: | Storage | | | A & PS | | |] Intelligent Edge | | | [removed: |] Financial Services | | | [removed: | Corporate Investments] [added: Corporate Investments] | | |

| | [added: | |] Dollars in millions, except for per share amounts | | | | | | | | | | | | | | | | | | | [added: | | | | |]

| Earnings (loss) from continuing [removed: operations(2)] [added: operations] | [removed: $] | [added: | (329) | | | | | | (1.2) | | % | | | |] 1,274 | | | [removed: $] | [removed: 2,804] | | [added: 4.4] | [removed: $] | [removed: 95] [added: %] | | | [removed: $] | [removed: 305] [added: 1,737] | | | [removed: $] | [removed: (108] | [removed: )] | [added: 5.6 | | % |]

| [removed: Earnings (loss)] [added: Loss] from [removed: continuing] operations as a % of net revenue | [removed: 4.4] | | [removed: % | | 12.3] [added: (20.4)] | | % | | [removed: 3.3] | | [removed: %] [added: (21.3)] | | [removed: 8.5] [added: %] | | [removed: %] | | [removed: (21.3] [added: (16.8)] | | [removed: )] % |

| Net earnings [added: (loss)] from continuing operations | [removed: $] | [added: | (322) | | | | | | (1.2) | | % | | | |] 1,049 | | | | | | [added: 3.6] | | [added: %] | | | | [added: 2,012] | | | | | | [added: 6.5 | | % |]

| [removed: Net] [added: Non-GAAP diluted net] earnings per share | | | [added: $] | [added: 1.35] | | | | | | | | | | | | | | | | [added: | | | | | | |]

[removed: | (1) | HPE] [added: (1)HPE] consolidated net revenue excludes intersegment net revenue. [removed: |]

[removed: | (2) | Segment] [added: (2)Segment] earnings from operations exclude certain unallocated corporate costs and eliminations, stock-based compensation expense related to corporate and certain global functions, [added: amortization of capitalized initial direct costs,] transformation costs, amortization of intangible assets, acquisition, dispositions and other related charges, [removed: restructuring charges, separation costs,] impairment of goodwill and disaster [removed: recoveries. |][added: (recovery) charges.]

Net revenue [removed: decreased by $1.7 billion, or 5.6% (decreased 4.3% on a constant currency basis),] in [removed: fiscal 2019 as compared to fiscal 2018] [added: Compute declined] as we [removed: continue] [added: continued] to execute on our HPE Next transformation initiative, which [removed: includes] [added: included] streamlining our offerings and business processes, and shifting investments in innovation [removed: to] [added: towards] high growth and higher-margin solutions and services.

The [removed: leading contributors to the net revenue] decline [removed: was lower revenue of $1.7 billion] in [removed: Hybrid IT, primarily in Compute,] [added: revenue was] due [added: primarily] to [removed: a decline in Tier-1] [added: lower Tier 1] server sales and lower revenue from China as [removed: we continue] [added: part of our strategic move] to exit less profitable product categories and certain [removed: markets.][added: markets, and unfavorable currency fluctuations.]

[removed: Also within Hybrid IT,] [added: Also,] weak demand in the enterprise market led to lower revenue from [removed: Industry Standard Server ("ISS")] [added: ISS] core products [removed: within Compute and from HPE Pointnext services.][added: as well as longer sales cycles.]

[removed: Gross] [added: Our gross profit] margin was [removed: 32.6% ($9.5] [added: 31.4% ($8.5] billion) and [removed: 29.9% ($9.2] [added: 32.6% ($9.5] billion) for [removed: fiscals 2019] [added: fiscal 2020] and [removed: 2018,] [added: 2019,] respectively.

The [removed: 2.7 percentage point] increase in gross [added: profit] margin was due primarily to [removed: Hybrid IT as] a [removed: result] [added: combination] of [added: factors including] the year-over-year decrease in commodity costs, [added: lower costs of services and products due to our] cost management [removed: initiatives,] [added: initiatives] and a lower mix of revenue from lower-margin Tier-1 server sales [removed: along] [added: coupled] with a higher mix of revenue from higher-margin products.

As of October 31, [removed: 2019,] [added: 2020,] cash, cash equivalents and restricted cash [removed: and long-term investments] were [removed: $4.1] [added: $4.6] billion, representing [removed: a decrease] [added: an increase] of approximately [removed: $1.0] [added: $0.5] billion from the October 31, [removed: 2018] [added: 2019] balance of [removed: $5.1] [added: $4.1] billion.

The [removed: decrease] [added: increase] was due primarily to the following: [added: cash provided by operating activities of $2.2 billion, net proceeds from debt issuance net of repayments of $1.9 billion, partially offset by] investments in property, plant and equipment, net of sales proceeds of [removed: $2.3] [added: $1.7] billion, cash payments related to [added: dividends and] share repurchases [removed: and dividends] of [removed: $2.9] [added: $1.0] billion and business acquisition activity of [removed: $1.5 billion, partially offset by cash provided by][added: $0.9 billion.]

Certain of our legacy hardware [added: server and storage] businesses [removed: in Hybrid IT] face challenges as customers migrate to cloud-based offerings and reduce their purchases of hardware products.

Therefore, the demand environment for traditional server and storage products is challenging and lower traditional compute and storage unit volume is impacting support attach opportunities [removed: in HPE Pointnext] within the [removed: Hybrid IT segment.][added: associated services organization.]

To be successful in overcoming these challenges, we must address business model shifts and optimize go-to-market execution by successfully transitioning to our as-a-Service model, further improving our cost structure, aligning sales coverage with our strategic goals, improving channel execution, and strengthening our capabilities in our areas of strategic focus, which includes accelerating growth in the Intelligent Edge and [added: High Performance Compute businesses and] delivering profitable growth [removed: in Hybrid IT.][added: across each of our business segments.]

During the third quarter of fiscal 2017, we launched an initiative called HPE [removed: Next, through which we are putting] [added: Next to put] in place a purpose-built company designed to compete and win in the markets where we participate.

Through this [removed: initiative,] [added: program,] we are simplifying our operating [removed: model and the way we work and] [added: model,] streamlining our [removed: offerings and] [added: offerings,] business processes [added: and business systems] to improve our execution.

For additional details on [removed: the HPE Next initiative,] [added: these Transformation Programs,] see Note [removed: 5, "HPE Next",] [added: 3, "Transformation Programs",] to the Consolidated Financial Statements in Item 8 of Part II, which is incorporated herein by reference.

For a further discussion of trends, uncertainties and other factors that could impact our operating results, [added: and risks, uncertainties and actions taken in response to COVID-19,] see the section entitled "Risk Factors" in Item [removed: 1A,] [added: 1A of Part 1,] which is incorporated herein by reference.

Management bases its estimates on historical experience and on various other assumptions that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying amount of assets and liabilities that are not readily apparent from other [removed: sources.][added: sources, including the economic considerations related to the impact that the novel coronavirus pandemic ("COVID-19") could have on our significant accounting estimates.]

[removed: As a result of adopting the new revenue recognition standard ("ASC 606"), we now] [added: We] account for a contract with a customer when both parties have provided written approval and are committed to perform, each [removed: party’s] [added: party's] rights including payment terms are identified, the contract has commercial substance, and collection of consideration is probable.

[removed: SaaS] arrangements have one distinct performance obligation which is satisfied over time with revenue recognized ratably over the contract term as the customer consumes the services.

This MD&A is organized as follows:

- *Trends and Uncertainties* A discussion of our response to the novel coronavirus pandemic ("COVID-19"), including our efforts to protect the health and well-being of our workforce, community and customers, and other matters.

The overview analysis compares fiscal 2020 to fiscal 2019.

A discussion of the results of operations at the consolidated level is followed by a discussion of the results of operations at the segment level.

*COVID-19*

The outbreak of COVID-19 in 2020 resulted in a global slowdown of economic activity including worldwide travel restrictions, prohibitions of non-essential work activities, disruption and shutdown of businesses and greater uncertainty in global financial markets.

COVID-19 continues to have an impact on our financial performance and we are currently unable to predict the extent to which COVID-19 may adversely impact our future business operations, financial performance and results of operations.

The full extent of the impact of COVID-19 on the Company's operational and financial performance is currently uncertain and will depend on many factors outside the Company's control, including, without limitation, the timing, extent, trajectory and duration of the pandemic, the development and availability of effective treatments and vaccines, the imposition of protective public safety measures, and the impact of the pandemic on the global economy and demand for our enterprise technology solutions.

For a further discussion of the risks, uncertainties and actions taken in response to COVID-19, see risks identified in the section entitled " Risk Factors" in Part I, Item 1A.

The Company believes its existing balances of cash, cash equivalents and marketable securities, along with commercial paper and other short-term liquidity arrangements, will be sufficient to satisfy its working capital needs, capital asset purchases, dividends, debt repayments and other liquidity requirements associated with its existing operations.

The Company also believes that COVID-19 has forced fundamental changes in businesses and communities that are aligned with the Company's edge-to-cloud platform delivered as-a-service strategy.

Navigating through the pandemic and planning for a post-COVID world have increased customers' needs for as-a-service offerings, secure connectivity, remote work capabilities and analytics to unlock insights from data.

Our solutions are aligned to these needs, and we see opportunity to help our customers drive digital transformations as they continue to adapt to operate in a new world.

We have prioritized protecting the health and safety of our team members, supporting the global communities in which we live and work and supporting our customers and partners to help them adjust to new and emerging needs.

In response to the COVID-19 pandemic and to ensure the safety of our employees, we implemented a global work-from-home policy until further notice that applies to a significant majority of our employees, with the exception of those performing essential activities.

In October 2020, in certain countries, we introduced a new hybrid model of work to our workforce called Edge-to-Office.

Depending on role classification, work will now primarily be done at the edge (outside of the office), or at HPE sites.

HPE sites will be used for collaborations, social connections, and other work, as needed for all roles.

The implementation of Edge-to-Office will occur in a phased-approach across the Company and as local regulations allow.

We have also made additional education and support resources and personal protective supplies available to team members.

In the event of a confirmed or probable case of COVID-19 among our team members and contractors, we have implemented a confidential reporting process to trace and notify close contacts—including third parties—that maintains the anonymity of all involved.

In the third quarter of fiscal 2020 we announced new return-to-work solutions to help customers accelerate business recovery and reopening plans.

The solutions combine expertise from HPE operational services for a fast, seamless transition, with HPE servers for the edge, Aruba AI-powered network infrastructure, and technologies from HPE's rich ecosystem of partners.

Customers that have implemented these solutions include large international airports, global food processing and packaging plants, retail stores, and corporate offices.

While we continue to mitigate the impact on our business and operations to address the near-term uncertainty, in fiscal 2020 we took a number of actions to ensure HPE is well positioned to emerge stronger, more agile and digitally enabled for a post-COVID-19 world.

- On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act") was enacted into law.

The CARES Act, among other things, provides tax relief to businesses, including the deferral of certain payroll taxes, relief for retaining employees, and other income tax provisions.

In addition to the CARES Act, governments around the world also enacted comparable legislation to address COVID-19 economic impacts.

Based on the relief provided by this legislation, in fiscal 2020 we deferred $92 million of payroll taxes which, the Company will pay, at least partially or in full, prior to the end of fiscal 2021.

- On April 6, 2020, we announced that we suspended purchases under our share repurchase program.

- In April 2020, we issued $2.25 billion aggregate principal amount of unsecured Senior Notes to enhance our liquidity and strengthen our capital.

Additionally, in July 2020, we issued $1.75 billion in aggregate principal amount of unsecured Senior Notes.

The net proceeds from July offerings were used primarily for the redemption in August 2020 of the $3.0 billion outstanding principal amount of the 3.6% unsecured Senior Notes that were originally due in October 2020.

- On May 19, 2020, the Board of Directors of HPE (the "Board") approved a cost optimization and prioritization plan.

We expect that this plan will be implemented through fiscal 2023 and estimate that it will include gross savings of at least $1.0 billion as a result of changes to our workforce, business model and business process, with this plan being expected to deliver annualized net run-rate savings of at least $800 million by the end of fiscal 2023, in both cases relative to our fiscal 2019 exit.

In order to achieve this level of cost savings, we estimate related cash funding payments of $1.3 billion over the next three years of which approximately $0.7 billion will relate to labor restructuring, $0.5 billion will relate to non-labor restructuring and $0.1 billion will relate to IT investments and design and execution charges.

For further details of the plan see the Other section of this discussion.

- On May 19, 2020, the Board approved cost containment measures including temporary base salary adjustments or unpaid leave for certain employees beginning July 1, 2020, along with restrictions on external hiring and salary increases.

Effective November 1, 2020, the aforementioned cost containment measures were returned to their original levels prior to the change.

- During fiscal 2020, we paid a quarterly dividend of $0.12 per share to our shareholders.

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HPE transferred its Enterprise Services business to Everett SpinCo, Inc. (a wholly-owned subsidiary of HPE) ("Everett") and distributed all of the shares of Everett to HPE stockholders.

Following the distribution, New Everett Merger Sub Inc., a wholly-owned subsidiary of Everett, merged with and into CSC and Everett changed its name to DXC Technology Company ("DXC").

HPE transferred its Software business segment to Seattle SpinCo, Inc. (a wholly-owned subsidiary of HPE) ("Seattle"), and distributed all of the shares of Seattle to HPE stockholders.

Following the share distribution, Seattle MergerSub, Inc., an indirect, wholly-owned subsidiary of Micro Focus, merged with and into Seattle.

[Table of Contents](#sD9FDF799BF485EA7A22D512CF528D239)

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| Net revenue(1) | $ | 29,135 | | | $ | 22,825 | | | $ | 2,837 | | | $ | 3,581 | | | $ | 507 | |

| Year-over-year change % | (5.6 | | ) % | | (6.8 | | ) % | | (2.8 | | ) % | | (2.5 | | ) % | | (6.6 | | ) % |

| Year-over-year change percentage points | (1.2 | | )pts | | 2.1 | | pts | | (6.2 | | )pts | | 0.7 | | pts | | (4.5 | | )pts |

| Basic net EPS from continuing operations | $ | 0.78 | | | | | | | | | | | | | | | | | |

| Diluted net EPS from continuing operations | $ | 0.77 | | | | | | | | | | | | | | | | | |

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In addition to these planned actions, we experienced uneven demand in fiscal 2019 due to an uncertain macroeconomic environment along with go-to-market execution issues in certain business areas and unfavorable currency fluctuations.

To a lesser extent, we experienced a revenue decline in Intelligent Edge due to lower sales of WLAN and switching products and in Financial Services due to lower rental revenue.

The overall net revenue decline was partially offset by revenue growth in HPE Aruba Services within Intelligent Edge.

Operating margin decreased 1.2 percentage points in fiscal 2019 as compared to fiscal 2018 due primarily to higher acquisition, disposition and other related charges as a result of a one-time charge associated with an arbitration settlement and increased investments in research and development, these increases were partially offset by the higher gross margin.

[Table of Contents](#sD9FDF799BF485EA7A22D512CF528D239)

operating activities of $4.0 billion, net proceeds from debt issuance net of repayments of $1.3 billion and net cash received through our derivative collateral program from counter parties of $341 million.

We are transitioning to an as-a-Service company, providing our entire portfolio through a range of subscription-based, pay-per-use and as-a-Service offerings.

However, we will continue to provide our customers choice in consuming HPE products and services in a traditional or as-a-Service offering.

More importantly, we are shifting our investments in innovation towards high growth and higher-margin solutions and services such as an edge-to-cloud data platform, multi-cloud management through OneSphere, consumption-based service models with HPE Greenlake, and the adoption of composable infrastructure.

The HPE Next initiative includes consolidating our manufacturing and support services locations, streamlining our business systems and reducing the number of countries in which we have a direct sales presence, while simultaneously migrating to a channel-only model in the remaining countries.

[Table of Contents](#sD9FDF799BF485EA7A22D512CF528D239)

[Table of Contents](#sD9FDF799BF485EA7A22D512CF528D239)

*Warranty*

We transact business in [removed: over] [added: approximately] 50 currencies worldwide, of which the most significant foreign currencies to our operations for fiscal [removed: 2019] [added: 2020] were the euro, Japanese yen, British pound, and Chinese yuan (renminbi).

We have performed sensitivity analyses as of October 31, [removed: 2019] [added: 2020] and [removed: 2018,] [added: 2019,] using a modeling technique that measures the change in the fair values arising from a hypothetical 10% adverse movement in the levels of foreign currency exchange rates relative to the U.S. dollar, with all other variables held constant.

The foreign currency exchange rates we used in performing the sensitivity analysis were based on market rates in effect at October 31, [removed: 2019] [added: 2020] and [removed: 2018.][added: 2019.]

The sensitivity analyses indicated that a hypothetical 10% adverse movement in foreign currency exchange rates would result in a foreign exchange fair value loss of [removed: $31] [added: $29] million and [removed: $36] [added: $31] million at October 31, [removed: 2019] [added: 2020] and [removed: 2018,] [added: 2019,] respectively.

We have performed sensitivity analyses as of October 31, [removed: 2019] [added: 2020] and [removed: 2018,] [added: 2019,] using a modeling technique that measures the change in the fair values arising from a hypothetical 10% adverse movement in the levels of interest rates across the entire yield curve, with all other variables held constant.

The discount rates used were based on the market interest rates in effect at October 31, [removed: 2019] [added: 2020] and [removed: 2018.][added: 2019.]

The sensitivity analyses indicated that a hypothetical 10% adverse movement in interest rates would result in a loss in the fair values of our [removed: debt, investments and financing receivables, net of interest rate swaps, of $39 million and $29 million at October 31, 2019 and 2018, respectively.]

debt, investments and financing receivables, net of interest rate swaps, of $47 million and $39 million at October 31, 2020 and 2019, respectively.

[removed: As a result of] [added: Since] the Separation, we [removed: now operate] [added: have operated] as an independent, publicly-traded company.

On April 1, 2017, we completed the separation and merger of our Enterprise Services business with [removed: Computer Sciences Corporation (“CSC”) (collectively, the “Everett Transaction”).][added: DXC Technology Company ("DXC", "the Everett Transaction" or "Everett").]

On September 1, 2017, we completed the separation and merger of our Software business segment with Micro Focus International plc [removed: (“Micro Focus”) (collectively, the “Seattle Transaction”).][added: ("Micro Focus", "the Seattle Transaction" or "Seattle").]

During the third quarter of fiscal 2017, we launched an initiative called HPE [removed: Next, through which we are in the process of putting] [added: Next to put] in place a purpose-built company designed to compete and win in the markets where we participate.

Through this [removed: initiative,] [added: program,] we are simplifying our operating [removed: model and the way we work,] [added: model,] streamlining our [removed: offerings and] [added: offerings,] business processes [added: and business systems] to improve our execution.

[removed: This initiative includes consolidating our manufacturing and support services locations, streamlining] [added: For example, through] our [removed: business systems and reducing] [added: HPE Next Initiative, we reduced] the number of countries in which we have a direct sales presence, while simultaneously migrating to a channel-only model in the remaining countries.

These [removed: expenses will] [added: costs are expected to] be partially offset by [removed: proceeds received] [added: gains] from [removed: the remaining] real estate sales.

[removed: | • | *Intelligent Edge* provides] [added: The Intelligent Edge business is comprised of] a portfolio of secure [removed: Edge-to-Cloud] [added: edge-to-cloud] solutions operating under the Aruba brand that include wireless local area network ("LAN"), campus and data center switching, software-defined wide-area-networking, [added: which now includes Silver Peak,] security, and associated services to enable secure connectivity for businesses of any size. [removed: |]

[removed: | • | *Corporate Investments*] [added: Corporate Investments] includes [removed: Communication and Media Solutions ("CMS"),] Hewlett Packard Labs [added: which is responsible for research] and [added: development, the Communications and Media Solutions ("CMS") business and] certain business incubation projects. [removed: |]

Storage also provides [removed: comprehensive data protection with HPE StoreOnce and HPE Recovery Manager Central,] solutions for secondary workloads and traditional tape, storage networking and disk products, such as HPE Modular Storage Arrays ("MSA") and HPE XP.

[removed: | ◦ | *HPE] [added: The HPE] Aruba [removed: Services*] [added: software and services portfolio of products] includes [added: cloud-based management, network management, which now includes Silver Peak, network access control, analytics and assurance, location services software and] professional and support services, as well as as-a-Service [removed: ("aaS")] and consumption models for the Intelligent Edge portfolio of products. [removed: |]

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

[removed: Pending] [added: Forthcoming] Segment Realignments

[removed: | • | *Strong solutions portfolio that spans edge to cloud.* We combine our software-defined infrastructure and services capabilities to provide what we believe is the strongest portfolio of enterprise solutions in the IT industry.] Our ability to deliver a comprehensive IT [removed: strategy,] [added: strategy] and connect our [removed: customers’] [added: customers'] data from edge to cloud, through our high-quality products and high-value consulting and support services in a single [removed: package-is] [added: package, is] one of our principal differentiators. [removed: |]

[removed: | • | *Multi-year innovation roadmap.* We have been in the technology and innovation business for over 75 years.] Our vast intellectual property portfolio and global research and development capabilities are part of a broader innovation roadmap designed to help organizations take advantage of the expanding amount of data available and leverage the latest technology [removed: |][added: developments like cloud, artificial intelligence, and cybersecurity to drive business outcomes now and in the future.]

We also have a strong balance sheet [added: and liquidity profile] that provides the [added: financial] flexibility and speed to take advantage of acquisition opportunities.

[removed: | • | *Ability to deliver flexible consumption-based IT solutions.*] We [removed: have developed IT consumption models to facilitate] [added: saw] the [removed: delivery of our products and services to our customers that includes pay-per-use or subscription-based options with a sophisticated set of metering, financial] [added: opportunity early,] and [removed: managed services components. We have a head start over other companies] that has allowed us to build capabilities and partnerships that are unique in the industry including the ability to deliver our as-a-Service portfolio [removed: in more than 50 countries and] with over [removed: 500] [added: 700] channel partners that can sell the as-a-Service portfolio. [removed: |]

[removed: | • | *Global distribution and partner ecosystem.*] We [removed: are experts in delivering innovative technological solutions to our customers in complex multi-country, multi-vendor and/or multi-language environments. We] have one of the largest go-to-market capabilities in our industry, including a large ecosystem of channel partners, which enables us to market and deliver our product offerings to customers located virtually anywhere in the world. [removed: |]

[removed: | • | *Open Platforms.* Many of our competitors want to lock customers into one flavor of cloud and cloud stack. We] [added: Conversely, we] believe that the cloud experience should be open and seamless across all our [removed: customers’] [added: customers'] clouds [removed: -] [added: —] and the best cloud transformation partner is one who is unbiased, offers choice, [added: and is] neutral without an agenda. [removed: We are unique in our ability to enable any hybrid cloud strategy and a consistent experience that is open to any cloud and differentiated with our partner integrations. |]

[removed: | • |] [added: -] resellers that sell our products and services, frequently with their own value-added products or services, to targeted customer groups; [removed: |]

[removed: | • |] [added: -] distribution partners that supply our solutions to resellers; [removed: |]

[removed: | • |] [added: -] original equipment manufacturers ("OEMs") that integrate our products and services with their own products and services, and sell the integrated solution; [removed: |]

[removed: | • |] [added: -] independent software vendors that provide their clients with specialized software products and often assist us in selling our products and services to clients purchasing their products; [removed: |]

[removed: | • |] [added: -] systems integrators that provide expertise in designing and implementing custom IT solutions and often partner with us to extend their expertise or influence the sale of our products and services; and [removed: |]

[removed: | • |] [added: -] advisory firms that provide various levels of management and IT consulting, including some systems integration work, and typically partner with us on client solutions that require our unique products and services. [removed: |]

[removed: We] [added: In those countries where we have a direct sales presence, we] typically assign an account manager to manage relationships across our business with large enterprise [removed: customers.][added: customers as well as with large public sector accounts.]

For other [removed: customers and for consumers,] [added: customers,] our businesses collaborate to manage relationships with commercial resellers targeting [removed: SMBs where appropriate.][added: smaller accounts, both in the commercial and public sector space.]

However, we do rely on [removed: sole sources] [added: single-source suppliers] for certain customized parts (although some of these sources have operations in multiple locations in the event of a [removed: disruption).][added: disruption) and a disruption or loss of a single-source supplier could delay production of some products.]

[removed: We are dependent upon] [added: In some instances, our single-source suppliers (e.g.] Intel and AMD as suppliers of [added: certain] x86 [removed: processors; however, we believe that] [added: processors) are also the single-source suppliers for the entire market;] disruptions with these suppliers would result in industry-wide dislocations and therefore would not disproportionately disadvantage us relative to our competitors.

See "Risk Factors—We depend on third-party suppliers, and our financial results could suffer if we fail to manage our suppliers [removed: properly."][added: relationships properly" in Item 1A.]

Approximately [removed: 67%] [added: 66%] of our overall net revenue in fiscal [removed: 2019] [added: 2020] came from outside the United States.

For a discussion of certain risks attendant to our international operations, see "Risk Factors—Due to the international nature of our business, political or economic changes or other factors could harm our future revenue, costs and expenses, and financial condition," and "—We are exposed to fluctuations in foreign currency exchange rates" in Item 1A, "Quantitative and Qualitative Disclosure about Market Risk" in Item 7A [added: of Part II] and Note 14, "Financial Instruments", to our Consolidated Financial Statements in Item 8 of Part II, which are incorporated herein by reference.

Our research and development efforts [added: ("R&D")] are focused on designing and developing products, services and solutions that anticipate customers' changing needs and desires and emerging technological trends.

Expenditures for [removed: research and development] [added: R&D] were [removed: $1.8] [added: $1.9] billion in fiscal [removed: 2019, $1.7] [added: 2020, $1.8] billion in fiscal [removed: 2018] [added: 2019] and [removed: $1.5] [added: $1.7] billion in fiscal [removed: 2017.][added: 2018.]

We anticipate that we will continue to have significant [removed: research and development] [added: R&D] expenditures in the future to support the design and development of innovative, high-quality products, services and solutions to maintain and enhance our competitive [added: position.]

For a discussion of risks attendant to our [removed: research and development] [added: R&D] activities, see "Risk Factors—If we cannot successfully execute our go-to-market strategy and continue to develop, manufacture and market innovative products, services and solutions, our business and financial performance may suffer" in Item 1A.

[removed: At present,] [added: As of October 31, 2020,] our worldwide patent portfolio [removed: includes] [added: included] approximately 15,000 issued and pending patents.

We believe that our patents and patent applications are important for maintaining the competitive differentiation of our products and services, enhancing our freedom of action to sell our products and services in markets in which we choose to participate, and maximizing our return on research [removed: and development investments.]

See [removed: Item 1A,] "Risk Factors—Our uneven sales cycle makes planning and inventory management difficult and future financial results less [removed: predictable."][added: predictable" in Item 1A.]

[removed: *Hybrid IT* operates] [added: The *Compute and Storage* businesses operate] in the highly competitive [added: enterprise] data center infrastructure market, which is characterized by rapid and ongoing technological innovation and price competition.

Our customers range from small-and-medium-sized businesses ("SMBs") to large global enterprises and governmental entities.

Transformation Programs

*Cost Optimization and Prioritization Plan*

During the third quarter of fiscal 2020, we launched a cost optimization and prioritization plan which focuses on realigning our workforce to areas of growth, including a new hybrid workforce model called Edge-to-Office, real estate strategies and simplifying and evolving our product portfolio strategy.

The implementation period for the cost optimization and prioritization plan is through fiscal 2023.

During this implementation period, we expect to incur transformation costs predominantly related to labor restructuring, non-labor restructuring, IT investments and design and execution charges.

The implementation period for HPE Next has been extended to fiscal 2023.

During the remaining implementation period we expect to incur transformation costs predominantly related to IT infrastructure costs for streamlining, upgrading and simplifying back-end operations, and real estate initiatives.

Impacts of the COVID-19 Pandemic on HPE's Business

The outbreak of COVID-19 in 2020 resulted in a global slowdown of economic activity including worldwide travel restrictions, prohibitions of non-essential work activities, disruption and shutdown of businesses and greater uncertainty in global financial markets, all of which resulted in COVID-19 having an impact on our financial performance in fiscal 2020.

As this pandemic endures and continues to have an impact on global economic activity, the extent to which COVID-19 adversely impacts our future business operations, financial performance and results of operations is uncertain and will depend on many factors outside the Company's control.

For a further discussion of the risks, uncertainties and actions taken in response to COVID-19, refer to Item 1A "Risk Factors" and Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations".

The pace of technology disruption continues to accelerate.

The global pandemic has served as a catalyst making digital transformation a strategic imperative for enterprises.

Enterprises now require more resilient IT to ensure continuity in their operations.

They also need to deliver secure connectivity, remote work solutions, data analytics capabilities and mobile-first, cloud-like experiences to their employees and customers, while preserving liquidity to navigate the macro economic uncertainty and to adapt to the new world.

We are answering the call for transformation with our edge-to-cloud strategy and solutions that are aligned to the evolving needs of our customers.

We help enterprises transform and digitize their businesses so that they may accelerate their business outcomes by delivering new digital experiences and unlocking insights from their data.

We saw that the foundation of

every business would be edge-to-cloud and in response HPE brings industry-leading IT infrastructure, software, services, financing resources and as-a-service capabilities to meet this demand.

Human Capital Resources

At HPE we are united by our purpose, which is to advance the way people live and work.

We believe technology’s greatest promise lies in its potential for positive change.

This is the guidepost for each decision we make at HPE.

We believe it not only helps guide our contribution to society, but also makes good business sense.

Our company has always been an engine of innovation, and our approximately 59,400 employees as of October 31, 2020, are proud of the ways our technology enables our customers to achieve meaningful outcomes like curing disease, modernizing farming to cure world-hunger and democratizing transportation through autonomous vehicles.

Our Culture: We recognize the critical importance of talent and culture to the success of HPE and our ability to fulfill our purpose.

We are passionate about the values that have underpinned the success of the company over years.

This is why we believe in investing in our employees and communities where we live and work.

HPE has intensified its focus on creating a superior team member experience and a highly engaged workforce, driving improvements across our communications, our culture, our reward programs, and our work environment and fostering a collaborative, inclusive and inspiring experience for all our team members.

Our most recent global engagement survey shows how these intentional efforts are making a difference, with our overall Employee Engagement Index measuring 83%.

More than 80% of team members would recommend HPE as a great place to work, and 87% say they are proud to work for HPE.

Building a Vibrant Culture: We have identified four key cultural beliefs that guide how we lead on a daily basis: belief in accelerating what’s next, in bold moves, in the “power of yes”, and in being a force for good.

We embed these beliefs in an unshakable DNA that puts customers first, ensuring we partner, innovate and act with uncompromising integrity.

Our empowered and engaging culture is making HPE a destination for the best talent while driving innovation and excellence for our customers.

Diversity, Equity and Inclusion: We are committed to being unconditionally inclusive to capture the ideas and perspectives that fuel innovation and enable our workforce, customers, and communities to succeed in the digital age.

This is because, by harnessing the potential of our technologies and our team members, we can be a force for good.

Annual goals are set to increase the representation of both women and ethnically diverse talent by at least 1 percentage point year-over-year.

In 2020, HPE increased our female workforce at every level worldwide, including technical and executive roles.

We also increased our representation of all underrepresented minorities in the U.S. The leadership standards sponsored, clearly articulate that all people leaders are expected to continuously develop their inclusive leadership capabilities.

To effect the spin-off, HP Inc. distributed all of the shares of Hewlett Packard Enterprise Company ("HPE") common stock owned by HP Inc. to its stockholders on November 1, 2015.

Holders of HP Inc. common stock received one share of Hewlett Packard Enterprise Company stock for every share of HP Inc. stock held as of the record date.

*Separation Transactions*

The Everett Transaction was accomplished by a series of transactions among CSC, HPE, Everett SpinCo, Inc. (a wholly-owned subsidiary of HPE) (“Everett”), and New Everett Merger Sub Inc., a wholly-owned subsidiary of Everett (“Merger Sub”).

We transferred the Enterprise Services business to Everett and distributed all of the shares of Everett to HPE stockholders.

Following the distribution of shares, the Merger Sub merged with and into CSC, which became a wholly-owned subsidiary of Everett.

At the time of the merger, Everett changed its name to DXC Technology Company (“DXC”).

The Seattle Transaction was accomplished by a series of transactions among HPE, Micro Focus, Seattle SpinCo, Inc. (a wholly-owned subsidiary of HPE) (“Seattle”), and Seattle MergerSub, Inc., an indirect wholly-owned subsidiary of Micro Focus (“Merger Sub”).

We transferred the Software business to Seattle and distributed all of the shares of Seattle to HPE stockholders.

Following the distribution of shares, the Merger Sub merged with and into Seattle which became an indirect, wholly-owned subsidiary of Micro Focus.

Upon the completion of the Everett and Seattle Transactions, we reclassified the historical financial results of our former Enterprise Services segment ("former ES segment") and our former Software segment to Net loss from discontinued operations in our Consolidated Statements of Earnings, and to assets and liabilities of discontinued operations in our Consolidated Balance Sheets.

More importantly, we will continue to shift our investments in innovation towards high growth and higher-margin solutions and services.

The HPE Next initiative is expected to be implemented through fiscal 2020.

During the remaining implementation period, we expect to incur expenses for workforce reductions, to upgrade and simplify our IT infrastructure, and for other non-labor actions.

Digital transformation is creating countless possibilities in a world where billions of users and devices and trillions of things are connected.

The applications and data that create and run our enterprises, live everywhere - in the cloud, on- and off-premises, and increasingly at the edge.

As the edge-to-cloud platform-as-a-Service company, HPE’s strategy is to help enterprises accelerate outcomes by unlocking value from all of their data, everywhere.

Built on decades of re-imagining the future and innovating to advance the way we live and work, HPE delivers unique, open and intelligent technology solutions, with a consistent experience across all clouds and edges, to help customers develop new business models, engage in new ways, and increase operational performance.

No matter what stage of digital transformation, HPE has the expertise, the right tools and solutions with a flexible delivery model to help enterprises harness the power of their data across all their clouds and edges.

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| • | Through HPE Pointnext Services, we have the expertise to assess, design, implement, optimize and manage our customers’ digital transformation. |

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| • | We have the right tools to help customers accelerate their business - be it automation, AI, security or predictive analytics. |

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| • | We have the as-a-Service consumption model to provide flexibility and optimize IT investments. |

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| • | Through Financial Services, we can help customers manage and monetize their existing assets in new ways and free up capital for innovation. |

At HPE, we help our customers thrive, from every edge to any cloud.

We organize our business into the following four segments:

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| • | *Hybrid IT* provides a broad portfolio of services-led and software-enabled infrastructure and solutions including secure, software-defined servers, storage and HPE Pointnext services, thereby combining HPE's hardware, software and services capabilities to make Hybrid IT simple for its customers. |

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Information with respect to this item may be found in Note [removed: 18,] [added: 17,] "Litigation and Contingencies", to the Consolidated Financial Statements in Item 8 of Part II, which is incorporated herein by reference.

PART II

[removed: FORM 10-K][added: Form 10-K]

| (Mark One) | | | [added: | | | | | |]

| ☒ | | [added: | | | |] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | [added: | |]

For the fiscal year [removed: ended October] [added: ended October] 31, [removed: 2019][added: 2020]

| ☐ | | [added: | | | |] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | [added: | |]

Commission file [removed: number 001-37483][added: number 001-37483]

[removed: HEWLETT PACKARD ENTERPRISE COMPANY][added: Hewlett Packard Enterprise Company]

| Delaware | | [added: | | | |] 47-3298624 | [added: | |]

| (State or other jurisdiction of incorporation or organization) | | [added: | | | |] (I.R.S. employer identification no.) | [added: | |]

| (Address of principal executive offices) | | | | [added: | | | | | | | |] (Zip code) | [added: | |]

Registrant's telephone number, including area code: [removed: (650) 687-5817][added: (650) 687-5817]

| Title of each class | [added: | |] Trading Symbol(s) | [added: | |] Name of each exchange on which registered | [added: | |]

| Common stock, par value $0.01 per share | [added: | |] HPE | [added: | |] New York Stock Exchange | [added: | |]

See the definitions of "large accelerated filer," "accelerated filer", "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange [removed: Act.][added: Act:]

| Large accelerated filer | [added: | |] ☒ | | [added: | | | |] Accelerated filer | [added: | |] ☐ | | [added: | | | |] Non-accelerated filer [removed: (Do not check if a smaller reporting company)] | [added: | |] ☐ | | [added: | | | |] Smaller reporting company | [added: | |] ☐ | [added: | |]

| | | | | | | | | | [added: | | | | | | | | | | | | | | | | | |] Emerging growth company | [added: | |] ☐ | [added: | |]

The aggregate market value of the registrant's common stock held by non-affiliates was [removed: $21,263,421,512] [added: $12,872,878,346] based on the last sale price of common stock on April 30, [removed: 2019.][added: 2020.]

The number of shares of Hewlett Packard Enterprise Company common stock outstanding as of [removed: November 30, 2019] [added: December 7, 2020] was [removed: 1,292,925,893] [added: 1,293,499,810] shares.

| DOCUMENTS INCORPORATED BY REFERENCE | | | [added: | | | | | |]

| DOCUMENT DESCRIPTION | | [added: | | | |] 10-K PART | [added: | |]

| Portions of the Registrant's proxy statement related to its [removed: 2020] [added: 2021] Annual Meeting of Stockholders to be filed pursuant to Regulation 14A within 120 days after Registrant's fiscal year end of October 31, [removed: 2019] [added: 2020] are incorporated by reference into Part III of this Report. | | [added: | | | |] III | [added: | |]

For the Fiscal Year ended October 31, [removed: 2019][added: 2020]

| | | [added: | | | |] Page | [added: | |]

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| [Item [removed: 6.](#s688FE3476EEE57AD954A5462A30FF277)] [added: 6.](#ieab11e50c39b42d29d1144a44165447c_40)] | [added: | |] [Selected Financial [removed: Data](#s688FE3476EEE57AD954A5462A30FF277)] [added: Data](#ieab11e50c39b42d29d1144a44165447c_40)] | [removed: [30](#s688FE3476EEE57AD954A5462A30FF277)] | [added: | [30](#ieab11e50c39b42d29d1144a44165447c_40) | | |]

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| | [added: | |] [PART [removed: III](#sEBDC40E923F05B34A695CF351F43717C)] [added: III](#ieab11e50c39b42d29d1144a44165447c_226)] | | [added: | | | |]

| [Item [removed: 10.](#sC2776A362C375FDAA52A4B2F9A7F19D4)] [added: 10.](#ieab11e50c39b42d29d1144a44165447c_229)] | [added: | |] [Directors, Executive Officers and Corporate [removed: Governance](#sC2776A362C375FDAA52A4B2F9A7F19D4)] [added: Governance](#ieab11e50c39b42d29d1144a44165447c_229)] | [removed: [137](#sC2776A362C375FDAA52A4B2F9A7F19D4)] | [added: | [141](#ieab11e50c39b42d29d1144a44165447c_229) | | |]

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| 11445 Compaq Center West Drive, | | | Houston, | | | Texas | | | | | | 77070 | | |

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Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.

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| | | | [PART I](#ieab11e50c39b42d29d1144a44165447c_13) | | | | | |

| | | | [PART II](#ieab11e50c39b42d29d1144a44165447c_34) | | | | | |

| | | | [PART IV](#ieab11e50c39b42d29d1144a44165447c_244) | | | | | |

Such statements involve risks, uncertainties and assumptions.

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| 6280 America Center Drive, | San Jose, | California | | 95002 |

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(Check one):

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| | [PART I](#s17CE55DB030C5CC79D2DBEA3E24B9EC7) | |

| | [PART II](#sAB4CD112429C5B7FB8ADFCAF2D2EEE7A) | |

| | [PART IV](#sD1A04F74DEBA565A84D20A656BF273D1) | |

As of October 31, [removed: 2019,] [added: 2020,] we owned or leased approximately [removed: 17] [added: 16] million square feet of space worldwide.

| | [added: | |] Owned | | | [added: | | |] Leased | | | [added: | | |] Total | | [added: |]

| | [added: | |] (Square feet in millions) | | | | | | | | [added: | | | | | | |]

| Administration and support | [added: | |] 4 | | | [added: | | |] 7 | | | [added: | | |] 11 | | [added: |]

| (Percentage) | [removed: 38] | [added: | 36 | |] % | | [removed: 62] | [added: | 64 | |] % | | [added: | |] 100 | [added: |] % |

| Core data centers, manufacturing plants, research and development facilities, and warehouse operations | [added: | |] 1 | | | [added: | | |] 1 | | | [added: | | |] 2 | | [added: |]

| (Percentage) | [removed: 48] | [added: | 50 | |] % | | [removed: 52] | [added: | 50 | |] % | | [added: | |] 100 | [added: |] % |

| Total | [added: | |] 5 | | | [added: | | |] 8 | | | [added: | | |] 13 | | [added: |]

| (Percentage) | [removed: 40] | [added: | 38 | |] % | | [removed: 60] | [added: | 62 | |] % | | [added: | |] 100 | [added: |] % |

Substantially all of our properties are utilized in whole or in part by our [removed: Hybrid IT] [added: Compute, HPC & MCS, Storage,] and Intelligent Edge segments.

In connection with the [removed: HPE Next initiative,] [added: transformation programs,] we continue to anticipate changes in our real estate portfolio over the next [removed: year.][added: three years.]

These changes may include reductions in overall [removed: space, and an increase in leased space as a percentage of total] space.

Our principal executive offices, including our global headquarters, are located at [removed: 6280 America] [added: 11445 Compaq] Center [added: West] Drive, [removed: San Jose, California, 95002,] [added: Houston, Texas, 77070,] United States of America ("U.S.").

| Americas *Puerto Rico*—Aguadilla *United States*—Alpharetta, Andover, [removed: Austin,] Carrollton, Chippewa Falls, Colorado Springs, Fremont, Fort Collins, Houston, Milpitas, Palo Alto, Roseville, San Jose, Santa Clara, Sunnyvale | | [added: | | | |] Europe, Middle East, Africa *United [removed: Kingdom*—Bristol, Erskine] [added: Kingdom*—Erskine] | [added: | |]

| Asia Pacific [removed: *China*—Beijing, Shanghai] [added: *China*—Beijing] *India*—Bangalore *Japan*—Tokyo *Singapore—*Singapore *Taiwan—*Taipei | | | [added: | | | | | |]

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| | | | As of October 31, 2020 | | | | | | | | | | | | | | |

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| | As of October 31, 2019 | | | | | | | |

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PART II

[removed: There] [added: According to the records of our transfer agent, there] were [removed: 56,291] [added: 54,317] stockholders of record of Hewlett Packard Enterprise common stock as of November [removed: 29, 2019.][added: 30, 2020.]

During the fiscal year ended October 31, [removed: 2019,] [added: 2020,] the Company repurchased and settled [removed: 150] [added: 25.3] million shares of the Company's common stock, which included [removed: 2.4] [added: 0.5] million shares that were unsettled open market purchases as of October 31, [removed: 2018.][added: 2019.]

[removed: Additionally,] [added: As of October 31, 2020,] the Company had [added: no] unsettled open market [removed: repurchases of 0.5 million shares as of October 31, 2019.][added: repurchases.]

Shares repurchased during fiscal [removed: 2019] [added: 2020] were recorded as a [removed: $2.2 billion] [added: $346 million] reduction to stockholders' equity.

As of October 31, [removed: 2019,] [added: 2020,] the Company had a remaining authorization of [removed: $2.5] [added: $2.1] billion for future share repurchases.

This graph covers the period from November 2, 2015 (the first day HPE's common stock began trading "regular-way" on the NYSE) through October 31, [removed: 2019.][added: 2020.]

On April 1, 2017, we completed the separation and merger of our Enterprise Services business with [removed: Computer Sciences Corporation (“CSC”) (collectively, the “Everett Transaction”).][added: DXC.]

On September 1, 2017, we completed the separation and merger of our Software business segment with Micro [removed: Focus International plc (“Micro Focus”) (collectively, the “Seattle Transaction”).][added: Focus.]

[removed: ][added: ]

| | [added: | |] 11/2015 | | | | [added: | |] 10/2016 | | | | [added: | |] 10/2017 | | | | [added: | |] 10/2018 | | | | [added: | |] 10/2019 | | | [added: | | | 10/2020 | | |]

| Hewlett Packard Enterprise | [added: | |] $ | 100.00 | | | [added: | |] $ | 157.00 | | | [added: | |] $ | 169.80 | | | [added: | |] $ | 190.36 | | | [added: | |] $ | 211.12 | | [added: | | | $ | 115.85 | |]

| S&P 500 Index | [added: | |] $ | 100.00 | | | [added: | |] $ | 103.27 | | | [added: | |] $ | 127.67 | | | [added: | |] $ | 137.04 | | | [added: | |] $ | 156.66 | | [added: | | | $ | 171.85 | |]

| S&P Information Technology Index | [added: | |] $ | 100.00 | | | [added: | |] $ | 109.74 | | | [added: | |] $ | 152.49 | | | [added: | |] $ | 171.25 | | | [added: | |] $ | 209.93 | | [added: | | | $ | 282.32 | |]

Market Information

Holders

Dividend

During fiscal 2020, we paid a quarterly dividend of $0.12 per share to our shareholders.

On December 1, 2020 we declared a quarterly dividend of $0.12 per share, payable on or about January 6, 2021, to stockholders of record as of the close of business on December 9, 2020.

On April 6, 2020, the Company announced that it suspended purchases under its share repurchase program in response to the global economic uncertainty that resulted from the worldwide spread of the novel coronavirus.

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The high and low common stock sales prices per share for fiscal 2019 and 2018 were as follows:

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| | | Market Price Per Share | | | | | | | | | | | | | | |

| | | 2019 | | | | | | | | 2018 | | | | | | |

| Fiscal Quarter | | High | | | | Low | | | | High | | | | Low | | |

| First quarter | | $ | 16.52 | | | $ | 12.09 | | | $ | 17.07 | | | $ | 12.82 | |

| Second quarter | | $ | 16.97 | | | $ | 15.05 | | | $ | 19.48 | | | $ | 14.66 | |

| Third quarter | | $ | 16.07 | | | $ | 13.55 | | | $ | 17.82 | | | $ | 14.46 | |

| Fourth quarter | | $ | 16.55 | | | $ | 12.52 | | | $ | 17.59 | | | $ | 14.36 | |

Dividends declared and paid per share by fiscal quarter in 2019 were as follows:

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| | | 2019 | | | | | | | | | | | | | | |

| | | Q1 | | | | Q2 | | | | Q3 | | | | Q4 | | |

| Dividends declared | | $ | 0.1125 | | | $ | 0.1125 | | | $ | 0.1125 | | | $ | 0.1200 | |

| Dividends paid | | $ | 0.1125 | | | $ | 0.1125 | | | $ | 0.1125 | | | $ | 0.1125 | |

Dividends declared and paid per share by fiscal quarter in 2018 were as follows:

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| | | 2018 | | | | | | | | | | | | | | |

| | | Q1 | | | | Q2 | | | | Q3 | | | | Q4 | | |

| Dividends declared | | $ | 0.1500 | | | $ | 0.1125 | | | $ | 0.1125 | | | $ | 0.1125 | |

| Dividends paid | | $ | 0.0750 | | | $ | 0.0750 | | | $ | 0.1125 | | | $ | 0.1125 | |

On October 23, 2019, the Company announced an increase to the regular quarterly dividend from $0.1125 per share to $0.1200 per share, which was effective in the fourth quarter of fiscal 2019.

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| Fourth Quarter of Fiscal 2019 | | Total Number of Shares Purchased | | | Average Price Paid per Share | | | | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | | | Approximate Dollar Value of Shares that May Yet Be Purchased under the Plans or Programs | | |

| | | In thousands, except per share amounts | | | | | | | | | | | | |

| Month 1 (August 2019) | | 7,601 | | | $ | 13.38 | | | 7,601 | | | $ | 2,647,056 | |

| Month 2 (September 2019) | | 5,805 | | | $ | 14.57 | | | 5,805 | | | $ | 2,562,469 | |

| Month 3 (October 2019) | | 6,448 | | | $ | 15.09 | | | 6,448 | | | $ | 2,465,162 | |

| Total | | 19,854 | | | $ | 14.28 | | | 19,854 | | | | | |

Share repurchases settled in the fourth quarter of fiscal 2019 were open market repurchases.

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The [removed: following table presents selected consolidated] [added: information set forth below is not necessarily indicative of future results of operations] and [removed: combined financial data, which] should be read in conjunction with [removed: our Consolidated Financial Statements and accompanying notes and] [added: Item 7,] "Management's Discussion and Analysis of Financial Condition and Results of [removed: Operations"] [added: Operations," and the Consolidated Financial Statements and accompanying notes] included [removed: elsewhere] in [added: Item 8, "Financial Statements and Supplementary Data," of] this [added: Annual Report on] Form [removed: 10-K.][added: 10-K, which are incorporated herein by reference, in order to understand further the factors that may affect the comparability of the financial data presented below.]

| | [added: | |] For the fiscal years ended October 31, | | | | | | | | | | | | | | | | | | | [added: | | | | | | | |]

| | [added: | | 2020 | | | | | |] 2019 | | | | [added: | |] 2018 | | | | [removed: 2017] | | [added: 2017] | | [removed: 2016] | | | | [removed: 2015] [added: 2016] | | |

| | [added: | |] In millions, except per share amounts | | | | | | | | | | | | | | | | | | | [added: | | | | | | | |]

| Statements of Earnings: | | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | |]

| Net revenue | [added: | |] $ | [removed: 29,135] [added: 26,982] | | | [added: | |] $ | [removed: 30,852] [added: 29,135] | | | [added: | |] $ | [removed: 28,871] [added: 30,852] | | | [added: | |] $ | [removed: 30,280] [added: 28,871] | | | [added: | |] $ | [removed: 31,077] [added: 30,280] | |

| Earnings [added: (loss)] from continuing [removed: operations(1)] [added: operations] | [added: | |] $ | [removed: 1,274] [added: (329)] | | | [added: | |] $ | [removed: 1,737] [added: 1,274] | | | [added: | |] $ | [removed: 564] [added: 1,737] | | | [added: | |] $ | [removed: 3,741] [added: 564] | | | [added: | |] $ | [removed: 1,903] [added: 3,741] | |

| Net earnings [added: (loss)] from continuing operations | [added: | |] $ | [removed: 1,049] [added: (322)] | | | [added: | |] $ | [removed: 2,012] [added: 1,049] | | | [added: | |] $ | [removed: 436] [added: 2,012] | | | [added: | |] $ | [removed: 3,237] [added: 436] | | | [added: | |] $ | [removed: 2,640] [added: 3,237] | |

| Net loss from discontinued operations | [added: | |] — | | | | [removed: (104] | | [removed: )] [added: —] | | [removed: (92] | | [removed: )] | | [removed: (76] [added: (104)] | | [removed: )] | | [removed: (179] | | [removed: )] [added: (92)] | [added: | | | | | (76) | | |]

| Net earnings [added: (loss)] | [added: | |] $ | [removed: 1,049] [added: (322)] | | | [added: | |] $ | [removed: 1,908] [added: 1,049] | | | [added: | |] $ | [removed: 344] [added: 1,908] | | | [added: | |] $ | [removed: 3,161] [added: 344] | | | [added: | |] $ | [removed: 2,461] [added: 3,161] | |

| Net earnings (loss) per share | | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | |]

| Basic | | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | |]

| Continuing operations | [added: | |] $ | [removed: 0.78] [added: (0.25)] | | | [added: | |] $ | [removed: 1.32] [added: 0.78] | | | [added: | |] $ | [removed: 0.26] [added: 1.32] | | | [added: | |] $ | [removed: 1.89] [added: 0.26] | | | [added: | |] $ | [removed: 1.46] [added: 1.89] | |

| Discontinued operations | [added: | |] — | | | | [removed: (0.07] | | [removed: )] [added: —] | | [removed: (0.05] | | [removed: )] | | [removed: (0.05] [added: (0.07)] | | [removed: )] | | [removed: (0.10] | | [removed: )] [added: (0.05)] | [added: | | | | | (0.05) | | |]

| Total basic net earnings [added: (loss)] per share | [added: | |] $ | [removed: 0.78] [added: (0.25)] | | | [added: | |] $ | [removed: 1.25] [added: 0.78] | | | [added: | |] $ | [removed: 0.21] [added: 1.25] | | | [added: | |] $ | [removed: 1.84] [added: 0.21] | | | [added: | |] $ | [removed: 1.36] [added: 1.84] | |

| Diluted | | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | |]

| Continuing operations | [added: | |] $ | [removed: 0.77] [added: (0.25)] | | | [added: | |] $ | [removed: 1.30] [added: 0.77] | | | [added: | |] $ | [removed: 0.26] [added: 1.30] | | | [added: | |] $ | [removed: 1.86] [added: 0.26] | | | [added: | |] $ | [removed: 1.44] [added: 1.86] | |

| Discontinued operations | [added: | |] — | | | | [removed: (0.07] | | [removed: )] [added: —] | | [removed: (0.05] | | [removed: )] | | [removed: (0.04] [added: (0.07)] | | [removed: )] | | [removed: (0.10] | | [removed: )] [added: (0.05)] | [added: | | | | | (0.04) | | |]

| Total diluted net earnings [added: (loss)] per share | [added: | |] $ | [removed: 0.77] [added: (0.25)] | | | [added: | |] $ | [removed: 1.23] [added: 0.77] | | | [added: | |] $ | [removed: 0.21] [added: 1.23] | | | [added: | |] $ | [removed: 1.82] [added: 0.21] | | | [added: | |] $ | [removed: 1.34] [added: 1.82] | |

| Cash dividends declared per share | [added: | |] $ | [removed: 0.4575] [added: 0.3600] | | | [added: | |] $ | [removed: 0.4875] [added: 0.4575] | | | [added: | |] $ | [removed: 0.2600] [added: 0.4875] | | | [added: | |] $ | [removed: 0.2200] [added: 0.2600] | | | [added: | |] $ | [removed: —] [added: 0.2200] | |

| Basic shares outstanding | [added: | | 1,294 | | | | | |] 1,353 | | | | [added: | |] 1,529 | | | | [removed: 1,646] | | [added: 1,646] | | [removed: 1,715] | | | | [removed: 1,804] [added: 1,715] | | |

| Diluted shares outstanding | [added: | | 1,294 | | | | | |] 1,366 | | | | [added: | |] 1,553 | | | | [removed: 1,674] | | [added: 1,674] | | [removed: 1,739] | | | | [removed: 1,834] [added: 1,739] | | |

| Balance Sheets: | | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | |]

| At year-end: | | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | |]

| Total assets | [added: | |] $ | [removed: 51,803] [added: 54,015] | | | [added: | |] $ | [removed: 55,493] [added: 51,803] | | | [added: | |] $ | [removed: 61,406] [added: 55,493] | | | [added: | |] $ | [removed: 79,629] [added: 61,406] | | | [added: | |] $ | [removed: 79,862] [added: 79,629] | |

| Long-term debt | [added: | |] $ | [removed: 9,395] [added: 12,186] | | | [added: | |] $ | [removed: 10,136] [added: 9,395] | | | [added: | |] $ | [removed: 10,182] [added: 10,136] | | | [added: | |] $ | [removed: 12,168] [added: 10,182] | | | [added: | |] $ | [removed: 14,679] [added: 12,168] | |

| Total debt | [added: | |] $ | [removed: 13,820] [added: 15,941] | | | [added: | |] $ | [removed: 12,141] [added: 13,820] | | | [added: | |] $ | [removed: 14,032] [added: 12,141] | | | [added: | |] $ | [removed: 15,693] [added: 14,032] | | | [added: | |] $ | [removed: 15,353] [added: 15,693] | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

The Statement of Earnings data for each of the three fiscal years ended October 31, 2019, 2018 and 2017, and the Balance Sheets data as of October 31, 2019 and 2018 set forth below are derived from our audited Consolidated Financial Statements included elsewhere in this Form 10-K.

The Statement of Earnings data for fiscal years ended October 31, 2016 and 2015, and the Balance Sheets data as of October 31, 2017, 2016 and 2015 are derived from our audited Consolidated and Combined Financial Statements that are not included in this Form 10-K.

With the completion of the Everett and Seattle Transactions on April 1, 2017 and September 1, 2017, respectively, the Company has reclassified the historical financial results of the former Enterprise Services segment ("former ES segment") and the former Software segment to Net loss from discontinued operations in its Consolidated Statements of Earnings,.

Prior to October 31, 2015, the Combined and Consolidated Statements of Earnings for the Company reflect allocations of general corporate expenses from HP Co. including, but not limited to, executive management, finance, legal, information technology, employee benefits administration, treasury, risk management, procurement, and other shared services.

These allocations were made on a direct usage basis when identifiable, with the remainder allocated on the basis of revenue, expenses, headcount, or other relevant measures.

Management of the Company and HP Co. consider these allocations to be a reasonable reflection of the utilization of services by, or the benefits provided to, the Company.

The allocations may not, however, reflect the expense the Company would have incurred as a standalone company for the periods presented.

Actual costs that may have been incurred if the Company had been a standalone company would depend on a number of factors, including the chosen organizational structure, what functions were outsourced or performed by employees and strategic decisions made in areas such as information technology and infrastructure.

The information set forth below is not necessarily indicative of future results of operations and should be read in conjunction with Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations," and the Consolidated Financial Statements and notes thereto included in Item 8, "Financial Statements and Supplementary Data," of this Annual Report on Form 10-K, which are incorporated herein by reference, in order to understand further the factors that may affect the comparability of the financial data presented below.

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| | |

| --- | --- |

| (1) | Effective at the beginning of the first quarter of fiscal 2019, in connection with the adoption of the accounting standards update for retirement benefits (Topic 715), the Company reclassified its non-service net periodic benefit credit from operating expense to other income and expense in its Consolidated Statements of Earnings. The Company reflected these changes retrospectively, by transferring the non-service net periodic benefit credit, a portion of which was previously allocated to the segments, and the remainder of which was reported within Unallocated corporate costs and eliminations, Restructuring charges, Transformation costs, Separation costs and Defined benefit plan remeasurement benefit. |

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| [removed: [Report of] [added: [Report](#ieab11e50c39b42d29d1144a44165447c_94)[s](#ieab11e50c39b42d29d1144a44165447c_94) [of] Independent Registered Public Accounting [removed: Firm](#s673CF836801A53C49F063AD245F81779)] [added: Firm](#ieab11e50c39b42d29d1144a44165447c_94)] | [removed: [58](#s673CF836801A53C49F063AD245F81779)] | [added: | [65](#ieab11e50c39b42d29d1144a44165447c_94) | | |]

| [removed: [Management’s] [added: [Management](#ieab11e50c39b42d29d1144a44165447c_97)['](#ieab11e50c39b42d29d1144a44165447c_97)[s] Report on Internal Control Over Financial [removed: Reporting](#s83924AB3DAE858D7A31F461BC0A2D030)] [added: Reporting](#ieab11e50c39b42d29d1144a44165447c_97)] | [removed: [61](#s83924AB3DAE858D7A31F461BC0A2D030)] | [added: | [68](#ieab11e50c39b42d29d1144a44165447c_97) | | |]

| [Consolidated Statements of [removed: Earnings](#s666C14BE8BC257C882E5445CDF5B4920)] [added: Earnings](#ieab11e50c39b42d29d1144a44165447c_100)] | [removed: [62](#s666C14BE8BC257C882E5445CDF5B4920)] | [added: | [69](#ieab11e50c39b42d29d1144a44165447c_100) | | |]

| [Consolidated Statements of Comprehensive [removed: Income](#s476371A133CE5AA0A4788AFD35169700)] [added: Income](#ieab11e50c39b42d29d1144a44165447c_103)] | [removed: [63](#s476371A133CE5AA0A4788AFD35169700)] | [added: | [70](#ieab11e50c39b42d29d1144a44165447c_103) | | |]

| [removed: [Consolidated] [added: | | | In the Consolidated] Balance [removed: Sheets](#sA42E0B5C489E5876AE152C959F888EAF)] [added: Sheets] | [removed: [64](#sA42E0B5C489E5876AE152C959F888EAF)] | [added: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |]

| [Consolidated Statements of Cash [removed: Flows](#s496983545B8E5786A5032E81F0D13E24)] [added: Flows](#ieab11e50c39b42d29d1144a44165447c_112)] | [removed: [65](#s496983545B8E5786A5032E81F0D13E24)] | [added: | [72](#ieab11e50c39b42d29d1144a44165447c_112) | | |]

| [Consolidated Statements of Stockholders' [removed: Equity](#sA4338DC6477259FBA1699B17983A9389)] [added: Equity](#ieab11e50c39b42d29d1144a44165447c_115)] | [removed: [66](#sA4338DC6477259FBA1699B17983A9389)] | [added: | [73](#ieab11e50c39b42d29d1144a44165447c_115) | | |]

| [Notes to Consolidated Financial [removed: Statements](#s08F0E2306D56529FB0CDDACAD3B1D1C5)] [added: Statements](#ieab11e50c39b42d29d1144a44165447c_121)] | [removed: [68](#s08F0E2306D56529FB0CDDACAD3B1D1C5)] | [added: | [75](#ieab11e50c39b42d29d1144a44165447c_121) | | |]

| [Note 1: Overview and Summary of Significant Accounting [removed: Policies](#sC296AAE19433541B8AAE7339A3A97A75)] [added: Policies](#ieab11e50c39b42d29d1144a44165447c_124)] | [removed: [68](#sC296AAE19433541B8AAE7339A3A97A75)] | [added: | [75](#ieab11e50c39b42d29d1144a44165447c_124) | | |]

| [removed: [Note 2:] Discontinued [removed: Operations](#s7845D28CBD6F592283FED4D036FDD0D1)] [added: operations] | [removed: [78](#s7845D28CBD6F592283FED4D036FDD0D1)] | [added: | — | | | | | | — | | | | | | (0.07) | | |]

[removed: | [Note 3:] [added: Note 2:] Segment [removed: Information](#s3BA53F77EDBC50F8851003BFCF15C59E) | [79](#s3BA53F77EDBC50F8851003BFCF15C59E) |][added: Information]

[removed: | [Note 5:] HPE [removed: Next](#sC286C6BB047152D5B58224E3EC5C4CA7) | [86](#sC286C6BB047152D5B58224E3EC5C4CA7) |][added: Next]

[removed: | [Note 6:] [added: Note 4:] Retirement and Post-Retirement Benefit [removed: Plans](#s9F56AE9C2D295E6D926D1E95B582CF59) | [87](#s9F56AE9C2D295E6D926D1E95B582CF59) |][added: Plans]

[removed: | [Note 7:] [added: Note 5:] Stock-Based [removed: Compensation](#sFB233E7A7DA15EED9A391AF9D8A162A2) | [95](#sFB233E7A7DA15EED9A391AF9D8A162A2) |][added: Compensation]

[removed: | [Note 8:] [added: Note 6:] Taxes on [removed: Earnings](#s550E6A8E3593549CA2BA8729127E3AB9) | [99](#s550E6A8E3593549CA2BA8729127E3AB9) |][added: Earnings]

[removed: | [Note 9:] [added: Note 7:] Balance Sheet [removed: Details](#sD021CC014B7555EC8F336B402D2A1EE0) | [104](#sD021CC014B7555EC8F336B402D2A1EE0) |][added: Details]

[removed: | [Note 11: Acquisitions](#s04D238906F69584CB80891A9CEC0319A) | [110](#s04D238906F69584CB80891A9CEC0319A) |][added: Note 10: Acquisitions]

[removed: | [Note 12:] [added: Note 11:] Goodwill and Intangible [removed: Assets](#s354ECF7E1B385298A9D1CC9CDFC459B6) | [112](#s354ECF7E1B385298A9D1CC9CDFC459B6) |][added: Assets]

[removed: | [Note 13:] [added: Note 12:] Fair [removed: Value](#s01EDD01670335F7CB56105FC7320DEB5) | [113](#s01EDD01670335F7CB56105FC7320DEB5) |][added: Value]

[removed: | [Note 14:] [added: Note 13:] Financial [removed: Instruments](#sAC24E5FE39395DF286DA7A53A32ED3FD) | [116](#sAC24E5FE39395DF286DA7A53A32ED3FD) |][added: Instruments]

[removed: | [Note 15: Borrowings](#s88EAF797188154DEA77F71CEC7040204) | [121](#s88EAF797188154DEA77F71CEC7040204) |][added: Note 14: Borrowings]

[removed: | [Note 16:] [added: Note 15:] Stockholders' [removed: Equity](#sE4B32FDDB1A45834941C627317D10FC4) | [124](#sE4B32FDDB1A45834941C627317D10FC4) |][added: Equity]