(b) Represents adjustment to net periodic pension cost resulting from remeasurements of the Hewlett Packard Enterprise pension plans in connection with the spin-off of the software business, Seattle SpinCo, Inc., and the merger of Seattle SpinCo, Inc. with Micro Focus International plc and the spin-off of the enterprise services business, Everett SpinCo, Inc., and the merger of Everett SpinCo, Inc. with Computer Sciences Corporation.
(c) Represents the settlement of certain pre-separation Hewlett-Packard Company income tax liabilities indemnified through the Tax Matters Agreement with HP Inc.
(d) Represents the amortization of basis difference adjustments related to the H3C divestiture.
(e) Includes tax amounts in connection with the spin-off of the enterprise services business, Everett SpinCo, Inc. and the software business, Seattle SpinCo, Inc., tax amounts related to U.S. tax reform, tax amounts related to the settlement of certain pre-separation Hewlett-Packard Company income tax liabilities indemnified through the Tax Matters Agreement with HP Inc., and excess tax benefits associated with stock-based compensation, following the adoption of ASU 2016-09 in the first quarter of fiscal 2018.
In connection with the spin-off of the enterprise services business, Everett SpinCo, Inc., for the nine months ended July 31, 2018, this amount includes a $228 million benefit primarily from foreign tax credits and from the release of non U.S. valuation allowances on deferred taxes established in connection with the Everett Transaction, following changes in foreign tax laws. For the nine months ended July 31, 2017, this amount primarily includes $404 million of income tax expense from valuation allowances on certain U.S. deferred tax assets and other divestiture related taxes.
For the nine months ended July 31, 2018, the amount includes $2.0 billion benefit in connection with the settlement of certain pre-separation Hewlett-Packard Company income tax liabilities indemnified through the Tax Matters Agreement with HP Inc. It also includes an estimated tax benefit of $1.8 billion from the provisional application of the new tax rules including a lower federal tax rate to deferred tax assets and liabilities, partially offset by a provisional estimate of $1.1 billion of transition tax expense on accumulated non U.S. earnings, and a $203 million benefit as a result of the liquidation of an insolvent non U.S. subsidiary, as a result of U.S. tax reform. The nine months ended July 31, 2018 also includes $68 million of net excess tax benefits from stock-based compensation.
HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions, except par value)
|July 31, 2018||October 31, 2017|
|Cash and cash equivalents||$||5,193||$||9,579|
|Accounts receivable, net of allowance for doubtful accounts||2,906||3,073|
|Assets held for sale(a)||6||14|
|Other current assets||3,156||3,085|
|Total current assets||17,467||21,444|
|Property, plant and equipment||6,184||6,269|
|Long-term financing receivables and other assets||12,863||12,600|
|Investments in equity interests||2,513||2,535|
|Goodwill and intangible assets||18,486||18,558|
|LIABILITIES AND STOCKHOLDERS’ EQUITY|
|Notes payable and short-term borrowings||$||2,326||$||3,850|
|Employee compensation and benefits||1,187||1,156|
|Taxes on earnings||484||429|
|Other accrued liabilities||3,843||3,844|
|Total current liabilities||17,407||18,924|
|Other non-current liabilities||6,681||8,795|
|HPE stockholders’ equity:|
|Preferred stock, $0.01 par value (300 shares authorized; none issued and outstanding at July 31, 2018)||—||—|
|Common stock, $0.01 par value (9,600 shares authorized; 1,482 and 1,595 shares issued and outstanding at July 31, 2018 and October 31, 2017, respectively)||15||16|
|Additional paid-in capital||31,338||33,583|
|Accumulated other comprehensive loss||(2,906||)||(2,895||)|
|Total HPE stockholders’ equity||23,426||23,466|
|Total stockholders’ equity||23,462||23,505|
|Total liabilities and stockholders’ equity||$||57,513||$||61,406|
(a) In connection with the HPE Next initiative, the Company determined that certain properties within its real estate portfolio met the criteria to be classified as Assets held for sale. The Company expects these properties to be sold within the next twelve months.