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03/22/2017

HPE 2017 Annual Meeting of Stockholders

HPE 2017 Annual Meeting of Stockholders

Title : HPE 2017 Annual Meeting of Stockholders

Date: Wednesday, March 22, 2017, 9:00 am PT, 12 pm ET

Location: Online virtual meeting at HPE.onlineshareholdermeeting.com

03/07/2017

HPE to Acquire Nimble Storage to Strengthen Leadership in Hybrid IT

HPE to Acquire Nimble Storage to Strengthen Leadership in Hybrid IT

Title : HPE to Acquire Nimble Storage to Strengthen Leadership in Hybrid IT

Date: 3/7/2017

HPE to Acquire Nimble Storage - Presentation

HPE to Acquire Nimble Storage - Press Release

02/28/2017

Morgan Stanley Technology, Media & Telecom Conference

Morgan Stanley Technology, Media & Telecom Conference

Title : Morgan Stanley Technology, Media & Telecom Conference

Date: Tuesday, February 28, 2017

Speakers:
Tim Stonesifer, Chief Financial Officer (February 28, at 10:15 a.m. PT)

Click here for webcast

Transcript

Stock performance

News and Events

Events

Upcoming Event

Title HPE 2017 Annual Meeting of Stockholders Date March 2017 Speakers

Title : HPE 2017 Annual Meeting of Stockholders

Date: Wednesday, March 22, 2017, 9:00 am PT, 12 pm ET

Location: Online virtual meeting at HPE.onlineshareholdermeeting.com

News

HPE to Acquire Nimble Storage to Strengthen Leadership in Hybrid IT

PALO ALTO, CA--(Marketwired - Mar 7, 2017) - Hewlett Packard Enterprise (NYSE: HPE)

  • The acquisition expands HPE's leadership position in the high-growth flash storage market
  • Creates comprehensive, leading-edge storage portfolio by bringing together highly complementary solutions
  • Accelerates growth of Nimble Storage by leveraging HPE's broad go-to-market engine

Hewlett Packard Enterprise (NYSE: HPE) today announced it has entered into a definitive agreement to acquire Nimble Storage, the San Jose, Calif.-based provider of predictive all-flash and hybrid-flash storage solutions. HPE will pay $12.50 per share in cash, representing a net cash purchase price at closing of $1.0 billion. In addition to the purchase price, HPE will assume or pay out Nimble's unvested equity awards, with a value of approximately $200 million at closing.

Flash storage is a fast-growing market and an increasingly important element of today's hybrid IT environment. The overall flash market was estimated to be approximately $15 billion in 2016 and is expected to be nearly $20 billion by 2020, with the all-flash segment growing at a nearly 17 percent compound annual growth rate1.

Nimble's predictive flash offerings for the entry to midrange segments are complementary to HPE's scalable midrange to high-end 3PAR solutions and affordable MSA products. This deal will enable HPE to deliver a full range of superior flash storage solutions for customers across every segment.

In addition, HPE plans to incorporate Nimble's InfoSight Predictive Analytics platform across its storage portfolio, which will enable a stronger, simplified support experience for HPE customers. For example, InfoSight automatically detects 90 percent of all issues within a customer's infrastructure, and resolves over 85 percent of them. This dramatically reduces the amount of time and effort a customer's IT team spends on support activities.

"Nimble Storage's portfolio complements and strengthens our current 3PAR products in the high-growth flash storage market and will help us deliver on our vision of making Hybrid IT simple for our customers," said Meg Whitman, President and CEO, Hewlett Packard Enterprise. "And, this acquisition is exactly aligned with the strategy and capital allocation approach we've laid out. We remain focused on high-growth and higher-margin segments of the market."

Nimble Strengthens and Expands HPE's Flash Storage Portfolio

Nimble was founded in 2007 and has approximately 1,300 employees worldwide. The company delivered revenue of $402 million in its most recent fiscal year, up 25 percent year over year. Nimble's strong application performance in its entry to midrange flash storage solutions is backed by an intelligent, predictive analytics engine that delivers a simplified customer experience. This unique analytics platform goes beyond storage to analyze performance issues across the full data path, from apps to the array, and resolves most issues before they occur. In addition, Nimble has recently introduced multicloud storage services that combine the best of on-premises and public cloud storage capabilities for Hybrid IT deployments.

Key customer benefits of the combined HPE and Nimble portfolio include:

  • The ability to seamlessly move data and replicate across hybrid flash and all-flash storage to meet unpredictable IT demands
  • Integrated data protection with application aware snapshots, encryption, replication and integration with leading independent software vendors
  • Effortless management of storage volumes along with data compaction to reduce capacity costs
  • Predictive support automation to anticipate and prevent most problems and solve remaining issues in a matter of minutes
  • Quality of service controls and full stack analytics to ensure predictable performance in hybrid IT deployments
  • Increased dedicated sales specialist support
  • A future-proofed technology platform with a rich roadmap to support next-generation storage

"Customers deploying hybrid IT not only need the performance of flash storage but are looking for predictive intelligence to optimize their infrastructure," said Antonio Neri, Executive Vice President and General Manager of the Enterprise Group, Hewlett Packard Enterprise. "With Nimble Storage and 3PAR, we can now deliver on those storage needs and provide more effective on-premises control and performance, at public cloud economics."

Deal Accelerates Nimble Financial Performance

By bringing together complementary product portfolios and leveraging HPE's expansive go-to-market capability, partner ecosystem, and leading server platform, HPE and Nimble will be able to significantly accelerate the financial performance of the combined business.

"Over 10,000 enterprises are using Nimble Storage because our Predictive Cloud Platform is reliably fast, radically simple, and cloud ready," said Suresh Vasudevan, CEO at Nimble Storage. "This acquisition validates our technology leadership in flash and in the use of cloud-based predictive analytics. We're confident that by combining Nimble Storage's technology leadership with HPE's global distribution strength, strong brand, and enterprise relationships, we're creating expansion opportunities for the combined company."

Transaction Details

The deal is expected to be accretive to HPE earnings in the first full fiscal year following the close.

Under the terms of the agreement, a subsidiary of HPE will commence a tender offer to purchase any and all of the outstanding shares of Nimble common stock for $12.50 per share in cash. Nimble stockholders representing approximately 21 percent of Nimble's outstanding shares have entered into a Tender and Support Agreement committing them to tender their shares into the tender offer. The completion of the tender offer is subject to customary terms and closing conditions, including Nimble stockholders tendering a majority of Nimble's outstanding shares in the offer, and receipt of specified regulatory approvals.

Following the successful completion of the tender offer, the agreement provides that Nimble will merge with a subsidiary of HPE and become a wholly owned subsidiary of HPE, and all remaining outstanding shares of Nimble will receive in the merger the same consideration paid to other stockholders in the tender offer.

Following the completion of the transaction, Nimble shares will be delisted from the New York Stock Exchange.

The tender offer and merger and closing of the transaction are expected to be completed in April, subject to the satisfaction or waiver of the offer conditions set forth in the agreement.

Additional Resources

Click here to read a blog post by Antonio Neri, Executive Vice President and General Manager of the Enterprise Group, Hewlett Packard Enterprise.

About Hewlett Packard Enterprise

Hewlett Packard Enterprise (HPE) is an industry leading technology company that enables customers to go further, faster. With the industry's most comprehensive portfolio, spanning the cloud to the data center to workplace applications, our technology and services help customers around the world make IT more efficient, more productive and more secure.

Forward-looking Statements

This document contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements involve risks, uncertainties and assumptions. If such risks or uncertainties materialize or such assumptions prove incorrect, the results of HPE and its consolidated subsidiaries could differ materially from those expressed or implied by such forward-looking statements and assumptions. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including any statements regarding the expected benefits and costs of the transaction contemplated by this document; the expected timing of the completion of the transaction; the ability of HPE, its subsidiaries and Nimble to complete the transaction considering the various conditions to the transaction, some of which are outside the parties' control, including those conditions related to regulatory approvals; any statements of expectation or belief; and any statements of assumptions underlying any of the foregoing. Risks, uncertainties and assumptions include the possibility that expected benefits may not materialize as expected; that the transaction may not be timely completed, if at all; that, prior to the completion of the transaction, Nimble's business may not perform as expected due to transaction-related uncertainty or other factors; that the parties are unable to successfully implement integration strategies; and other risks that are described in HPE's SEC reports, including but not limited to the risks described in HPE's Annual Report on Form 10-K for its fiscal year ended October 31, 2016. HPE assumes no obligation and does not intend to update these forward-looking statements.

Additional Information and Where to Find It

The tender offer for the outstanding shares of Nimble referenced in this document has not yet commenced. This document is for informational purposes only and is neither an offer to purchase nor a solicitation of an offer to sell shares, nor is it a substitute for the tender offer materials that HPE and its subsidiary will file with the U.S. Securities and Exchange Commission (the SEC). At the time the tender offer is commenced, HPE and its subsidiary will file tender offer materials on Schedule TO, and thereafter Nimble will file a Solicitation/Recommendation Statement on Schedule 14D-9, with the SEC with respect to the tender offer. THE TENDER OFFER MATERIALS (INCLUDING AN OFFER TO PURCHASE, A RELATED LETTER OF TRANSMITTAL AND CERTAIN OTHER TENDER OFFER DOCUMENTS) AND THE SOLICITATION/RECOMMENDATION STATEMENT WILL CONTAIN IMPORTANT INFORMATION. HOLDERS OF SHARES OF NIMBLE COMMON STOCK ARE URGED TO READ THESE DOCUMENTS CAREFULLY WHEN THEY BECOME AVAILABLE (AS EACH MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME) BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION THAT HOLDERS OF SHARES OF NIMBLE COMMON STOCK SHOULD CONSIDER BEFORE MAKING ANY DECISION REGARDING TENDERING THEIR SHARES. The Offer to Purchase, the related Letter of Transmittal and certain other tender offer documents, as well as the Solicitation/Recommendation Statement, will be made available to all holders of shares of Nimble's common stock at no expense to them. The tender offer materials and the Solicitation/Recommendation Statement will be made available for free at the SEC's website at www.sec.gov. Additional copies of the tender offer materials may be obtained for free by directing a written request to Hewlett Packard Enterprise Company, 3000 Hanover Street, Palo Alto, California 94304, Attention: Investor Relations, or by calling (650) 857-2246. In addition to the Offer to Purchase, the related Letter of Transmittal and certain other tender offer documents, as well as the Solicitation/Recommendation Statement, HPE and Nimble file annual, quarterly and current reports and other information with the SEC. You may read and copy any reports or other information filed by HPE or Nimble at the SEC public reference room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the public reference room. HPE's and Nimble's filings with the SEC are also available to the public from commercial document-retrieval services and at the SEC's website at www.sec.gov.

1Source: IDC Disk Forecast, December 2016

HPE Reports Fiscal 2017 First Quarter Results

PALO ALTO, CA--(Marketwired - Feb 23, 2017) - Hewlett Packard Enterprise ( NYSE : HPE)

  • First quarter GAAP diluted net earnings per share of $0.16, above the previously provided outlook of $0.03 to $0.07 per share
  • First quarter non-GAAP diluted net earnings per share of $0.45, near the high end of the previously provided outlook of $0.42 to $0.46 per share
  • First quarter net revenue of $11.4 billion, down 10% from the prior-year period and down 4% when adjusted for divestitures and currency
  • First quarter cash flow from operations of ($1.5) billion, down from ($75) million in the prior-year period
  • Returned $750 million to shareholders in the form of share repurchases and dividends
  • Updates FY17 GAAP diluted net EPS outlook to $0.60 to $0.70 from $0.72 to $0.82
  • Updates FY17 non-GAAP diluted net EPS outlook to $1.88 to $1.98 from $2.00 to $2.10

Hewlett Packard Enterprise ( NYSE : HPE) today announced financial results for its fiscal 2017 first quarter, ended January 31, 2017.

First quarter net revenue of $11.4 billion was down 10% from the prior-year period and down 4% when adjusted for divestitures and currency.

First quarter GAAP diluted net earnings per share (EPS) was $0.16, up from $0.15 in the prior-year period, and above its previously provided outlook of $0.03 to $0.07. First quarter non-GAAP diluted net EPS was $0.45, up from $0.41 in the prior-year period, and near the high end of its previously provided outlook of $0.42 to $0.46. First quarter non-GAAP net earnings and non-GAAP diluted net EPS exclude after-tax costs of $505 million and $0.29 per diluted share, respectively, related to separation costs, restructuring charges, amortization of intangible assets, acquisition and other related charges, an adjustment to earnings from equity interests, defined benefit plan settlement and remeasurement charges and tax indemnification adjustments.

"I believe HPE remains on the right track," said Meg Whitman, President and CEO of Hewlett Packard Enterprise. "The steps we're taking to strengthen our portfolio, streamline our organization, and build the right leadership team, are setting us up to win long into the future."

HPE fiscal 2017 first quarter financial performance

  Q1 FY17 Q1 FY16 Y/Y
GAAP net revenue ($B) $11.4 $12.7 (10%)
GAAP operating margin 4.1% 3.0% 1.1 pts.
GAAP net earnings ($B) $0.3 $0.3 flat
GAAP diluted net earnings per share $0.16 $0.15 7%
Non-GAAP operating margin 9.2% 8.1% 1.1 pts.
Non-GAAP net earnings ($B) $0.8 $0.7 6%
Non-GAAP diluted net earnings per share $0.45 $0.41 10%
Cash flow from operations ($B) ($1.5) ($0.1) ($1.4)

Information about HPE's use of non-GAAP financial information is provided under "Use of non-GAAP financial information" below. 

Outlook
Three significant headwinds have developed since Hewlett Packard Enterprise provided its original fiscal 2017 outlook at its Securities Analyst Meeting in October 2016: increased pressure from foreign exchange movements, higher commodities pricing, and some near-term execution issues. Given these challenges, the company is reducing its FY17 outlook by $0.12 in order to continue making the appropriate investments to secure the long-term success of the business.

For the fiscal 2017 second quarter, Hewlett Packard Enterprise estimates GAAP diluted net EPS to be in the range of ($0.03) to $0.01 and non-GAAP diluted net EPS to be in the range of $0.41 to $0.45. Fiscal 2017 second quarter non-GAAP diluted net EPS estimates exclude after-tax costs of approximately $0.44 per diluted share, related primarily to separation costs, restructuring charges and the amortization of intangible assets.

For fiscal 2017, Hewlett Packard Enterprise estimates GAAP diluted net EPS to be in the range of $0.60 to $0.70 and non-GAAP diluted net EPS to be in the range of $1.88 to $1.98. Fiscal 2017 non-GAAP diluted net EPS estimates exclude after-tax costs of approximately $1.28 per diluted share, related primarily to separation costs, restructuring charges and the amortization of intangible assets.

Fiscal 2017 first quarter segment results

  • Enterprise Group revenue was $6.3 billion, down 12% year over year, down 6% when adjusted for divestitures and currency, with a 12.7% operating margin. Servers revenue was down 12%, down 11% when adjusted for divestitures and currency, Storage revenue was down 13%, down 12% when adjusted for divestitures and currency, Networking revenue was down 33%, up 6% when adjusted for divestitures and currency, and Technology Services revenue was down 2%, up 4% when adjusted for divestitures and currency. 
  • Enterprise Services revenue was $4.0 billion, down 11% year over year, down 6% when adjusted for divestitures and currency, with a 7.0% operating margin. Infrastructure Technology Outsourcing revenue was down 8%, down 7% when adjusted for divestitures and currency, and Application and Business Services revenue was down 17%, down 3% when adjusted for divestitures and currency.
  • Software revenue was $721 million, down 8% year over year, down 1% when adjusted for divestitures and currency, with a 21.4% operating margin. License revenue was down 9%, down 2% when adjusted for divestitures and currency, Support revenue was down 9%, down 2% when adjusted for divestitures and currency, Professional Services revenue was down 7%, down 5% when adjusted for divestitures and currency, and Software-as-a-service (SaaS) revenue was up 4%, up 6% when adjusted for divestitures and currency.
  • Financial Services revenue was $823 million, up 6% year over year, net portfolio assets were up 2%, and financing volume was down 10%. The business delivered an operating margin of 9.5%.

Revenue adjusted for divestitures and currency excludes revenue resulting from businesses divestitures in fiscal 2017, 2016 and 2015 and also assumes no change in the foreign exchange rate from the prior-year period. A reconciliation of GAAP revenue to revenue adjusted for divestitures and currency is provided in the earnings presentation at investors.hpe.com.

About Hewlett Packard Enterprise
Hewlett Packard Enterprise (HPE) is an industry leading technology company that enables customers to go further, faster. With the industry's most comprehensive portfolio, spanning the cloud to the data center to workplace applications, our technology and services help customers around the world make IT more efficient, more productive and more secure.

Use of non-GAAP financial information
To supplement Hewlett Packard Enterprise's condensed and consolidated financial statement information presented on a generally accepted accounting principles (GAAP) basis, Hewlett Packard Enterprise provides revenue on a constant currency basis, revenue adjusted for divestitures and currency, as well as non-GAAP operating expense, non-GAAP operating profit, non-GAAP operating margin, non-GAAP income tax rate, non-GAAP net earnings, non-GAAP diluted net earnings per share, gross cash, free cash flow, normalized free cash flow, net capital expenditures, net debt, net cash, operating company net debt and operating company net cash financial measures. Hewlett Packard Enterprise also provides forecasts of non-GAAP diluted net earnings per share and free cash flow. A reconciliation of adjustments to GAAP financial measures for this quarter and prior periods is included in the tables below or elsewhere in the materials accompanying this news release. In addition, an explanation of the ways in which Hewlett Packard Enterprise's management uses these non-GAAP measures to evaluate its business, the substance behind Hewlett Packard Enterprise's decision to use these non-GAAP measures, the material limitations associated with the use of these non-GAAP measures, the manner in which Hewlett Packard Enterprise's management compensates for those limitations, and the substantive reasons why Hewlett Packard Enterprise's management believes that these non-GAAP measures provide useful information to investors is included under "Use of non-GAAP financial measures" further below. This additional non-GAAP financial information is not meant to be considered in isolation or as a substitute for revenue, operating profit, operating margin, net earnings, diluted net earnings per share, cash and cash equivalents, cash flow from operations, investments in property, plant and equipment, or total company debt prepared in accordance with GAAP.

Forward-looking statements

This press release contains forward-looking statements that involve risks, uncertainties and assumptions. If the risks or uncertainties ever materialize or the assumptions prove incorrect, the results of Hewlett Packard Enterprise may differ materially from those expressed or implied by such forward-looking statements and assumptions. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including but not limited to any projections of revenue, margins, expenses, effective tax rates, net earnings, net earnings per share, cash flows, benefit plan funding, share repurchases, currency exchange rates or other financial items; any projections of the amount, timing or impact of cost savings or restructuring charges; any statements of the plans, strategies and objectives of management for future operations, including the pending divestiture transactions, the execution of restructuring plans and any resulting cost savings or revenue or profitability improvements; any statements concerning the expected development, performance, market share or competitive performance relating to products or services; any statements regarding current or future macroeconomic trends or events and the impact of those trends and events on Hewlett Packard Enterprise and its financial performance; any statements regarding pending investigations, claims or disputes; any statements of expectation or belief; and any statements or assumptions underlying any of the foregoing.

Risks, uncertainties and assumptions include the need to address the many challenges facing Hewlett Packard Enterprise's businesses; the competitive pressures faced by Hewlett Packard Enterprise's businesses; risks associated with executing Hewlett Packard Enterprise's strategy; the impact of macroeconomic and geopolitical trends and events; the need to manage third-party suppliers and the distribution of Hewlett Packard Enterprise's products and the delivery of Hewlett Packard Enterprise's services effectively; the protection of Hewlett Packard Enterprise's intellectual property assets, including intellectual property licensed from third parties; risks associated with Hewlett Packard Enterprise's international operations; the development and transition of new products and services and the enhancement of existing products and services to meet customer needs and respond to emerging technological trends; the execution and performance of contracts by Hewlett Packard Enterprise and its suppliers, customers and partners; the hiring and retention of key employees; integration and other risks associated with business combination and investment transactions; the results of the divestiture transactions or restructuring plans, including estimates and assumptions related to the cost (including any possible disruption of Hewlett Packard Enterprise's business) and the anticipated benefits of the transactions or of implementing the restructuring plans; the resolution of pending investigations, claims and disputes; and other risks that are described in Hewlett Packard Enterprise's Annual Report on Form 10-K for the fiscal year ended October 31, 2016 and subsequent Quarterly Reports on Form 10-Q.

As in prior periods, the financial information set forth in this press release, including tax-related items, reflects estimates based on information available at this time. While Hewlett Packard Enterprise believes these estimates to be reasonable, these amounts could differ materially from reported amounts in the Hewlett Packard Enterprise Quarterly Report on Form 10-Q for the quarter ended January 31, 2017. Hewlett Packard Enterprise assumes no obligation and does not intend to update these forward-looking statements.

HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
(In millions, except per share amounts)
 
       
    Three months ended  
    January 31,
2017
    October 31,
2016
    January 31,
2016
 
Net revenue   $ 11,407     $ 12,478     $ 12,724  
Costs and expenses:                        
  Cost of sales     8,108       8,689       9,112  
  Research and development     485       534       585  
  Selling, general and administrative     1,759       1,864       1,998  
  Amortization of intangible assets     101       126       218  
  Restructuring charges     177       395       311  
  Acquisition and other related charges     44       51       37  
  Separation costs     276       293       79  
  Defined benefit plan settlement and remeasurement charges (a)     (6)       --       --  
  Gain on MphasiS and H3C divestitures     --       (251)       --  
    Total costs and expenses     10,944       11,701       12,340  
Earnings from operations     463       777       384  
Interest and other, net     (78)       (94)       (80)  
Tax indemnification adjustments     (18)       311       15  
Loss from equity interests (b)     (22)       (4)       --  
Earnings before taxes     345       990       319  
Tax settlements (c)     --       (647)       --  
Provision for taxes     (78)       (41)       (52)  
Net earnings   $ 267     $ 302     $ 267  
                         
Net earnings per share:                        
  Basic   $ 0.16     $ 0.18     $ 0.15  
  Diluted   $ 0.16     $ 0.18     $ 0.15  
Cash dividends declared per share   $ 0.13     $ --     $ 0.11  
Weighted-average shares used to compute net earnings per share:                        
  Basic     1,669       1,672       1,761  
  Diluted     1,700       1,709       1,778  
                         
(a) Represents adjustment to net periodic pension cost resulting from remeasurements of the Hewlett-Packard Enterprise pension plans in anticipation of the spin-off and merger of Everett Spinco, Inc. with Computer Sciences Corporation.
(b) Primarily represents the Company's ownership interest in the net earnings of H3C, which it records as an equity method investment.
(c) Related to the settlement of certain pre-separation Hewlett-Packard Company income tax liabilities of which $328 million (reported within Tax indemnification adjustments) is indemnified by HP Inc. through the Tax Matters Agreement.
HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES
ADJUSTMENTS TO GAAP NET EARNINGS, EARNINGS FROM OPERATIONS,
OPERATING MARGIN AND DILUTED NET EARNINGS PER SHARE
(Unaudited)
(In millions, except percentages and per share amounts)
 
                         
  Three months ended January 31, 2017   Diluted net earnings per share   Three months ended
October 31, 2016
  Diluted net earnings per share   Three months ended January 31, 2016   Diluted net earnings per share  
GAAP net earnings $ 267   $ 0.16   $ 302   $ 0.18   $ 267   $ 0.15  
                                     
Non-GAAP adjustments:                                    
  Amortization of intangible assets   101     0.06     126     0.07     218     0.12  
  Restructuring charges   177     0.10     395     0.23     311     0.17  
  Acquisition and other related charges   44     0.03     51     0.03     37     0.02  
  Separation costs   276     0.16     293     0.17     79     0.04  
  Defined benefit plan settlement and remeasurement charges (a)   (6)     --     --     --     --     --  
  Gain on MphasiS and H3C divestitures   --     --     (251)     (0.15)     --     --  
  Tax indemnification adjustments   18     0.01     (311)     (0.18)     (15)     (0.01)  
  Loss from equity interests (b)   35     0.02     35     0.02     --     --  
  Adjustments for taxes   (140)     (0.09)     (252)     (0.14)     (166)     (0.08)  
  Tax settlements (c)   --     --     647     0.38     --     --  
Non-GAAP net earnings $ 772   $ 0.45   $ 1,035   $ 0.61   $ 731   $ 0.41  
                                     
GAAP earnings from operations $ 463         $ 777         $ 384        
                                     
Non-GAAP adjustments:                                    
  Amortization of intangible assets   101           126           218        
  Restructuring charges   177           395           311        
  Acquisition and other related charges   44           51           37        
  Separation costs   276           293           79        
  Defined benefit plan settlement and remeasurement charges (a)   (6)           --           --        
  Gain on MphasiS and H3C divestitures   --           (251)           --        
Non-GAAP earnings from operations $ 1,055         $ 1,391         $ 1,029        
                                     
GAAP operating margin   4%           6%           3%        
Non-GAAP adjustments   5%           5%           5%        
Non-GAAP operating margin   9%           11%           8%        
                                     
(a) Represents adjustment to net periodic pension cost resulting from remeasurements of the Hewlett-Packard Enterprise pension plans in anticipation of the spin-off and merger of Everett Spinco, Inc. with Computer Sciences Corporation.
(b) Represents the amortization of the basis difference adjustments related to the H3C divestiture.
(c) Related to the settlement of certain pre-separation Hewlett-Packard Company income tax liabilities of which $328 million (reported within Tax indemnification adjustments) is indemnified by HP Inc. through the Tax Matters Agreement.
HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions, except par value)
 
       
    As of  
    January 31, 2017     October 31, 2016  
    Unaudited        
ASSETS                
Current assets:                
  Cash and cash equivalents   $ 9,858     $ 12,987  
  Accounts receivable     6,482       6,909  
  Financing receivables     2,922       2,923  
  Inventory     1,988       1,774  
  Other current assets     4,275       4,324  
    Total current assets     25,525       28,917  
Property, plant and equipment     9,497       9,636  
Long-term financing receivables and other assets (a)     13,604       13,166  
Investments in equity interests     2,620       2,648  
Goodwill and intangible assets     25,416       25,262  
Total assets   $ 76,662     $ 79,629  
LIABILITIES AND STOCKHOLDERS' EQUITY                
Current liabilities:                
  Notes payable and short-term borrowings (a)   $ 3,520     $ 3,530  
  Accounts payable     5,535       5,943  
  Employee compensation and benefits     1,736       2,364  
  Taxes on earnings     538       420  
  Deferred revenue     4,712       4,610  
  Other accrued liabilities     5,645       5,662  
    Total current liabilities     21,686       22,529  
Long-term debt (a)     12,270       12,560  
Other liabilities     11,132       13,022  
Stockholders' equity                
  HPE stockholders' equity:                
    Preferred stock, $0.01 par value (300 shares authorized; none issued and outstanding at January 31, 2017)     --       --  
    Common stock, $0.01 par value (9,600 shares authorized; 1,663 and 1,666 shares issued and outstanding at January 31, 2017 and October 31, 2016, respectively)     17       17  
    Additional paid-in capital     34,848       35,248  
    Retained earnings     2,760       2,782  
    Accumulated other comprehensive loss     (6,124)       (6,599)  
      Total HPE stockholders' equity     31,501       31,448  
  Non-controlling interests     73       70  
    Total stockholders' equity     31,574       31,518  
Total liabilities and stockholders' equity   $ 76,662     $ 79,629  
   
(a) During the first quarter of fiscal 2017, the Company adopted on a retrospective basis the guidance on the presentation of debt issuance cost as a direct deduction from the related debt liability. As such, prior period amounts have been reclassified to conform to the current presentation.
HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In millions)
 
             
    Three Months Ended January 31,  
    2017     2016  
Cash flows from operating activities:                
  Net earnings   $ 267     $ 267  
  Adjustments to reconcile net earnings to net cash used in operating activities:                
    Depreciation and amortization     840       989  
    Stock-based compensation expense     145       165  
    Provision for doubtful accounts and inventory     7       39  
    Restructuring charges     177       311  
    Deferred taxes on earnings     (125)       245  
    Excess tax benefit from stock-based compensation     (74)       (2)  
    Loss from equity interests     22       --  
    Other, net     125       44  
    Changes in operating assets and liabilities, net of acquisitions:                
      Accounts receivable     466       612  
      Financing receivables     126       60  
      Inventory     (132)       (182)  
      Accounts payable     (231)       (788)  
      Taxes on earnings     (22)       (440)  
      Restructuring     (326)       (285)  
      Other assets and liabilities (a)     (2,729)       (1,110)  
        Net cash used in operating activities     (1,464)       (75)  
Cash flows from investing activities:                
  Investment in property, plant and equipment     (923)       (832)  
  Proceeds from sale of property, plant and equipment     84       76  
  Purchases of available-for-sale securities and other investments     (7)       (144)  
  Maturities and sales of available-for-sale securities and other investments     1       143  
  Payments made in connection with business acquisitions, net of cash acquired     (292)       --  
  (Payments) proceeds from business divestitures, net     (20)       65  
    Net cash used in investing activities     (1,157)       (692)  
Cash flows from financing activities:                
  Short-term borrowings with original maturities less than 90 days, net     24       2  
  Issuance of debt     248       300  
  Payment of debt     (262)       (109)  
  Settlement of cash flow hedge     --       (8)  
  Issuance of common stock under employee stock plans     158       4  
  Repurchase of common stock     (641)       (1,197)  
  Net transfer from former Parent     --       532  
  Excess tax benefit from stock-based compensation     74       2  
  Cash dividends paid     (109)       (96)  
    Net cash used in financing activities     (508)       (570)  
Decrease in cash and cash equivalents     (3,129)       (1,337)  
Cash and cash equivalents at beginning of period     12,987       9,842  
Cash and cash equivalents at end of period   $ 9,858     $ 8,505  
                 
(a) Includes $1.9 billion of initial funding payments related to unfunded pension liabilities in association with the spin-off and merger of the Enterprise Services business with Computer Science Corporation.
HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES
SEGMENT INFORMATION
(Unaudited)
(In millions)
 
       
    Three months ended  
    January 31,
2017
    October 31,
2016
    January 31,
2016
 
Net revenue: (a)                        
  Enterprise Group   $ 6,325     $ 6,823     $ 7,182  
  Enterprise Services     4,037       4,590       4,555  
  Software     721       903       780  
  Financial Services     823       814       776  
  Corporate Investments     --       --       1  
    Total segment net revenue     11,906       13,130       13,294  
  Elimination of intersegment net revenue and other     (499)       (652)       (570)  
    Total Hewlett Packard Enterprise consolidated net revenue   $ 11,407     $ 12,478     $ 12,724  
                         
Earnings before taxes: (a)                        
  Enterprise Group   $ 802     $ 909     $ 964  
  Enterprise Services     283       483       218  
  Software     154       290       136  
  Financial Services     78       83       100  
  Corporate Investments     (43)       (79)       (99)  
    Total segment earnings from operations     1,274       1,686       1,319  
                         
  Corporate and unallocated costs and eliminations     (74)       (169)       (125)  
  Stock-based compensation expense     (145)       (126)       (165)  
  Amortization of intangible assets     (101)       (126)       (218)  
  Restructuring charges     (177)       (395)       (311)  
  Acquisition and other related charges     (44)       (51)       (37)  
  Separation costs     (276)       (293)       (79)  
  Defined benefit plan settlement and remeasurement charges (b)     6       --       --  
  Gain on MphasiS and H3C divestitures     --       251       --  
  Interest and other, net     (78)       (94)       (80)  
  Tax indemnification adjustments     (18)       311       15  
  Loss from equity interests (c)     (22)       (4)       --  
    Total Hewlett Packard Enterprise consolidated earnings before taxes   $ 345     $ 990     $ 319  
                             
(a) Effective at the beginning of the first quarter of fiscal 2017, the Company implemented organizational changes to align its segment financial reporting more closely with its current business structure. These organizational changes resulted in: (i) within the Enterprise Group segment, primarily, the transfer of the big data storage product group previously reported within the Servers business unit to the Storage business unit; the transfer of the Aruba services capabilities previously reported within the Networking business unit to the Technology Services business unit; and (ii) the transfer of the Communications and Media Solutions product group previously reported within the Enterprise Services segment to the Technology Services business unit within the Enterprise Group segment.
  The Company reflected these changes to its segment information retrospectively to the earliest period presented, which resulted in: (i) within the Enterprise Group segment, primarily, the transfer of net revenue from the big data storage product group previously reported within the Servers business unit to the Storage business unit; the transfer of net revenue from the Aruba services capabilities previously reported within the Networking business unit to the Technology Services business unit; and (ii) the transfer of net revenue, related eliminations of intersegment revenues and operating profit related to the Communications and Media Solutions product group previously reported within the Enterprise Services segment to the Technology Services business unit within the Enterprise Group segment.
  The changes within the Enterprise Group segment had no impact on Hewlett Packard Enterprise's previously reported Enterprise Group segment net revenue and earnings from operations. The change between the Enterprise Services and Enterprise Group segments had no impact on Hewlett Packard Enterprise's previously reported consolidated net revenue, earnings from operations, net earnings or net earnings per share.
(b) Represents adjustment to net periodic pension cost resulting from remeasurements of the Hewlett-Packard Enterprise pension plans in anticipation of the spin-off and merger of Everett Spinco, Inc. with Computer Sciences Corporation.
(c) Represents the Company's ownership interest in the net earnings of equity method investments, primarily H3C.
   
HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES
SEGMENT/BUSINESS UNIT INFORMATION
(Unaudited)
(In millions, except percentages)
 
             
    Three months ended     Change (%)  
    January 31,
2017
    October 31,
2016
    January 31,
2016
    Q/Q     Y/Y  
Net revenue: (a)                                    
Enterprise Group                                    
  Servers   $ 3,103     $ 3,463     $ 3,536     (10%)     (12%)  
  Technology Services     1,943       1,974       1,985     (2%)     (2%)  
  Storage     730       827       837     (12%)     (13%)  
  Networking     549       559       824     (2%)     (33%)  
    Total Enterprise Group     6,325       6,823       7,182     (7%)     (12%)  
                                     
Enterprise Services                                    
  Infrastructure Technology Outsourcing     2,637       2,846       2,874     (7%)     (8%)  
  Application and Business Services     1,400       1,744       1,681     (20%)     (17%)  
    Total Enterprise Services     4,037       4,590       4,555     (12%)     (11%)  
                                     
Software     721       903       780     (20%)     (8%)  
Financial Services     823       814       776     1%     6%  
Corporate Investments     --       --       1     0%     (100%)  
    Total segment net revenue     11,906       13,130       13,294     (9%)     (10%)  
                                     
  Elimination of intersegment net revenue and other     (499 )     (652 )     (570 )   (23%)     (12%)  
Total Hewlett Packard Enterprise consolidated net revenue   $ 11,407     $ 12,478     $ 12,724     (9%)     (10%)  
                                     
(a) Effective at the beginning of the first quarter of fiscal 2017, the Company implemented organizational changes to align its segment financial reporting more closely with its current business structure. These organizational changes resulted in: (i) within the Enterprise Group segment, primarily, the transfer of the big data storage product group previously reported within the Servers business unit to the Storage business unit; the transfer of the Aruba services capabilities previously reported within the Networking business unit to the Technology Services business unit; and (ii) the transfer of the Communications and Media Solutions product group previously reported within the Enterprise Services segment to the Technology Services business unit within the Enterprise Group segment.
  The Company reflected these changes to its segment information retrospectively to the earliest period presented, which resulted in: (i) within the Enterprise Group segment, primarily, the transfer of net revenue from the big data storage product group previously reported within the Servers business unit to the Storage business unit; the transfer of net revenue from the Aruba services capabilities previously reported within the Networking business unit to the Technology Services business unit; and (ii) the transfer of net revenue, related eliminations of intersegment revenues and operating profit related to the Communications and Media Solutions product group previously reported within the Enterprise Services segment to the Technology Services business unit within the Enterprise Group segment.
  The changes within the Enterprise Group segment had no impact on Hewlett Packard Enterprise's previously reported Enterprise Group segment net revenue and earnings from operations. The change between the Enterprise Services and Enterprise Group segments had no impact on Hewlett Packard Enterprise's previously reported consolidated net revenue, earnings from operations, net earnings or net earnings per share.
   
HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES
SEGMENT OPERATING MARGIN SUMMARY DATA
(Unaudited)
         
    Three months ended   Change in Operating
Margin (pts)
    January 31, 2017   Q/Q   Y/Y
Segment operating margin: (a)            
  Enterprise Group   12.7 %   (0.6) pts   (0.7) pts
  Enterprise Services   7.0 %   (3.5) pts   2.2 pts
  Software   21.4 %   (10.7) pts   4.0 pts
  Financial Services   9.5 %   (0.7) pts   (3.4) pts
    Corporate Investments (b)   NM   NM   NM
      Total segment operating margin   10.7 %   (2.1) pts   0.8 pts
                   
(a) Effective at the beginning of the first quarter of fiscal 2017, the Company implemented organizational changes to align its segment financial reporting more closely with its current business structure. These organizational changes resulted in: (i) within the Enterprise Group segment, primarily, the transfer of the big data storage product group previously reported within the Servers business unit to the Storage business unit; the transfer of the Aruba services capabilities previously reported within the Networking business unit to the Technology Services business unit; and (ii) the transfer of the Communications and Media Solutions product group previously reported within the Enterprise Services segment to the Technology Services business unit within the Enterprise Group segment.
  The Company reflected these changes to its segment information retrospectively to the earliest period presented, which resulted in: (i) within the Enterprise Group segment, primarily, the transfer of net revenue from the big data storage product group previously reported within the Servers business unit to the Storage business unit; the transfer of net revenue from the Aruba services capabilities previously reported within the Networking business unit to the Technology Services business unit; and (ii) the transfer of net revenue, related eliminations of intersegment revenues and operating profit related to the Communications and Media Solutions product group previously reported within the Enterprise Services segment to the Technology Services business unit within the Enterprise Group segment.
  The changes within the Enterprise Group segment had no impact on Hewlett Packard Enterprise's previously reported Enterprise Group segment net revenue and earnings from operations. The change between the Enterprise Services and Enterprise Group segments had no impact on Hewlett Packard Enterprise's previously reported consolidated net revenue, earnings from operations, net earnings or net earnings per share.
   
(b) "NM" represents not meaningful.
   
HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES
CALCULATION OF DILUTED NET EARNINGS PER SHARE
(Unaudited)
(In millions, except per share amounts)
     
    Three months ended
    January 31,
2017
  October 31,
2016
  January 31,
2016
Numerator:                  
  GAAP net earnings   $ 267   $ 302   $ 267
  Non-GAAP net earnings   $ 772   $ 1,035   $ 731
                   
Denominator:                  
  Weighted-average shares used to compute basic net earnings per share     1,669     1,672     1,761
  Dilutive effect of employee stock plans (a)     31     37     17
    Weighted-average shares used to compute diluted net earnings per share     1,700     1,709     1,778
                   
GAAP diluted net earnings per share   $ 0.16   $ 0.18   $ 0.15
Non-GAAP diluted net earnings per share   $ 0.45   $ 0.61   $ 0.41
   
(a) Includes any dilutive effect of restricted stock awards, stock options and performance-based awards.

Use of non-GAAP financial measures
To supplement Hewlett Packard Enterprise's condensed and consolidated financial statement information presented on a GAAP basis, Hewlett Packard Enterprise provides revenue on a constant currency basis, revenue adjusted for divestitures and currency, non-GAAP operating expenses, non-GAAP operating profit, non-GAAP operating margin, non-GAAP income tax rate, non-GAAP net earnings, non-GAAP diluted net earnings per share, gross cash, free cash flow, normalized free cash flow, net capital expenditures, net debt, net cash, operating company net debt and operating company net cash financial measures. Hewlett Packard Enterprise also provides forecasts of non-GAAP diluted net earnings per share and free cash flow.

These non-GAAP financial measures are not computed in accordance with, or as an alternative to, generally accepted accounting principles in the United States. The GAAP measure most directly comparable to revenue on a constant currency basis is revenue. The GAAP measure most directly comparable to revenue adjusted for divestitures and currency is revenue. The GAAP measure most directly comparable to non-GAAP operating expense is total costs and expenses. The GAAP measure most directly comparable to non-GAAP operating profit is earnings from operations. The GAAP measure most directly comparable to non-GAAP operating margin is operating margin. The GAAP measure most directly comparable to non-GAAP income tax rate is income tax rate. The GAAP measure most directly comparable to non-GAAP net earnings is net earnings. The GAAP measure most directly comparable to non-GAAP diluted net earnings per share is diluted net earnings per share. The GAAP measure most directly comparable to gross cash is cash and cash equivalents. The GAAP measure most directly comparable to free cash flow is cash flow from operations. The GAAP measure most directly comparable to normalized free cash flow is cash flow from operations. The GAAP measure most directly comparable to net capital expenditures is investment in property, plant and equipment. The GAAP measure most directly comparable to net debt and operating company net debt is total company debt. The GAAP measure most directly comparable to each of net cash and operating company net cash is cash and cash equivalents. Reconciliations of each of these non-GAAP financial measures to GAAP information are included in the tables above or elsewhere in the materials accompanying this news release.

Use and economic substance of non-GAAP financial measures used by Hewlett Packard Enterprise
Revenue on a constant currency basis assumes no change in the foreign exchange rate from the prior-year period. Revenue adjusted for divestitures and currency excludes revenue resulting from businesses divestitures in fiscal 2017, 2016 and 2015 and also assumes no change in the foreign exchange rate from the prior-year period. Non-GAAP operating expenses, non-GAAP operating profit, and non-GAAP operating margin are defined to exclude the effects of a gain on the MphasiS and H3C divestitures and any charges relating to the amortization of intangible assets, restructuring charges, charges relating to the separation and divestiture transactions, acquisition and other related charges and defined benefit plan settlement and remeasurement charges. Non-GAAP net earnings and non-GAAP diluted net earnings per share consist of net earnings or diluted net earnings per share excluding those same charges and valuation allowances and separation taxes, adjustments to loss from equity interest, tax indemnification adjustments and tax settlements. In addition, non-GAAP net earnings and non-GAAP diluted net earnings per share are adjusted by the amount of additional taxes or tax benefits associated with each non-GAAP item. Hewlett Packard Enterprise's management uses these non-GAAP financial measures for purposes of evaluating Hewlett Packard Enterprise's historical and prospective financial performance, as well as Hewlett Packard Enterprise's performance relative to its competitors. Hewlett Packard Enterprise's management also uses these non-GAAP measures to further its own understanding of Hewlett Packard Enterprise's segment operating performance. Hewlett Packard Enterprise believes that excluding the items mentioned above from these non-GAAP financial measures allows Hewlett Packard Enterprise's management to better understand Hewlett Packard Enterprise's consolidated financial performance in relation to the operating results of Hewlett Packard Enterprise's segments, as Hewlett Packard Enterprise's management does not believe that the excluded items are reflective of ongoing operating results. More specifically, Hewlett Packard Enterprise's management excludes each of those items mentioned above for the following reasons:

  • Hewlett Packard Enterprise recorded a gain on the sale of its assets and liabilities identified as part of the H3C and MphasiS transactions during fiscal 2016. Hewlett Packard Enterprise excludes these gains for purposes of calculating these non-GAAP measures because it believes that these one-time gains do not reflect the Company's ongoing operational performance, thereby facilitating a more meaningful evaluation of Hewlett Packard Enterprise's current operating performance and comparisons to Hewlett Packard Enterprise's operating performance in other periods
  • Hewlett Packard Enterprise incurs charges relating to the amortization of intangible assets. Those charges are included in Hewlett Packard Enterprise's GAAP earnings from operations, operating margin, net earnings and diluted net earnings per share. Such charges are significantly impacted by the timing and magnitude of Hewlett Packard Enterprise's acquisitions and any related impairment charges. Consequently, Hewlett Packard Enterprise excludes these charges for purposes of calculating these non-GAAP measures to facilitate a more meaningful evaluation of Hewlett Packard Enterprise's current operating performance and comparisons to Hewlett Packard Enterprise's operating performance in other periods.
  • Restructuring charges are costs associated with a formal restructuring plan and are primarily related to (i) employee termination costs and benefits (ii) costs to vacate duplicative facilities and (iii) an accelerated employee stock compensation program. Hewlett Packard Enterprise excludes these restructuring costs (and any reversals of charges recorded in prior periods) for purposes of calculating these non-GAAP measures because it believes that these historical costs do not reflect expected future operating expenses and do not contribute to a meaningful evaluation of Hewlett Packard Enterprise's current operating performance or comparisons to Hewlett Packard Enterprise's operating performance in other periods.
  • Separation costs are expenses associated with HPI's (formerly known as "Hewlett-Packard Company" or "HP Co.") separation into two independent publicly-traded companies and the spin-off and merger transactions of the Enterprise Services business with CSC and the Software business with Micro Focus. The charges are primarily related to third-party consulting, contractor fees, early debt settlement costs, marketing and branding related expenses, and other incremental costs incurred to complete the transactions. Hewlett Packard Enterprise excludes these separation costs for purposes of calculating these non-GAAP measures to facilitate a more meaningful evaluation of Hewlett Packard Enterprise's current operating performance and comparisons to Hewlett Packard Enterprise's operating performance in other periods.
  • Hewlett Packard Enterprise incurs cost related to its acquisitions and divestitures, most of which are treated as non-cash or non-capitalized expenses. The charges are direct expenses such as professional fees and retention costs, as well as non-cash adjustments to the fair value of certain acquired assets such as inventory. Because non-cash or non-capitalized acquisition-related expenses are inconsistent in amount and frequency and are significantly impacted by the timing and nature of Hewlett Packard Enterprise's acquisitions and divestitures, Hewlett Packard Enterprise believes that eliminating such expenses for purposes of calculating these non-GAAP measures facilitates a more meaningful evaluation of Hewlett Packard Enterprise's current operating performance and comparisons to Hewlett Packard Enterprise's past operating performance.
  • Adjustments to loss from equity interests includes purchase accounting adjustments and the amortization of the basis difference in relation to the H3C divestiture and the resulting equity method investment in H3C. Hewlett Packard Enterprise believes that eliminating these amounts for purposes of calculating non-GAAP operating profit facilitates a more meaningful evaluation of Hewlett Packard Enterprise's current operating performance and comparisons to Hewlett Packard Enterprise's operating performance in other periods.
  • Hewlett Packard Enterprise incurs defined benefit plan settlement and remeasurement charges relating to its defined pension plans. The charges are associated with the net settlement resulting from voluntary lump sum payments offered to certain terminated vested participants and remeasurement of plan assets in anticipation of the planned spin-off of the Enterprise Services business and merger with CSC, resulting in a decrease to the net periodic pension expense. Hewlett Packard Enterprise excludes these charges for the purpose of calculating these non-GAAP measures to facilitate a more meaningful evaluation of Hewlett Packard Enterprise's current operating performance and comparisons to Hewlett Packard Enterprise's operating performance in other periods.
  • Tax indemnification adjustments are related to changes in the indemnification positions between Hewlett Packard Enterprise and HPI that are recorded by the Company as pre-tax income or expense and not considered tax expense. Hewlett Packard Enterprise excludes these charges for the purpose of calculating these non-GAAP measures to facilitate a more meaningful evaluation of Hewlett Packard Enterprise's current operating performance and comparisons to Hewlett Packard Enterprise's operating performance in other periods.
  • Tax settlements represent settlements of certain pre-separation Hewlett-Packard Company income tax liabilities shared with HP Inc. through the Tax Matters Agreement. The Company excluded this charge for the purpose of calculation non-GAAP measures to facilitate a more meaningful evaluation of Hewlett Packard Enterprise's current operating performance and comparisons to Hewlett Packard Enterprise's operating performance in other periods.
  • As a result of the separation, Hewlett Packard Enterprise recorded net tax benefits comprising the reversal of a previously recorded valuation allowance, the write off of certain deferred taxes that will no longer provide any future benefits to the Company and the effect of a separation related tax deduction. Hewlett Packard Enterprise believes that eliminating these amounts for purposes of calculating non-GAAP net earnings facilitates a more meaningful comparison of Hewlett Packard Enterprise's net earnings to other periods.

Material limitations associated with use of non-GAAP financial measures
These non-GAAP financial measures have limitations as analytical tools, and these measures should not be considered in isolation or as a substitute for analysis of Hewlett Packard Enterprise's results as reported under GAAP. Some of the limitations in relying on these non-GAAP financial measures are:

  • Items such as amortization of intangible assets, though not directly affecting Hewlett Packard Enterprise's cash position, represent the loss in value of intangible assets over time. The expense associated with this loss in value is not included in non-GAAP operating expenses, non-GAAP operating profit, non-GAAP operating margin, non-GAAP net earnings or non-GAAP diluted net earnings per share, and therefore does not reflect the full economic effect of the loss in value of those intangible assets.
  • Items such as restructuring charges and separation costs that are excluded from non-GAAP operating expenses, non-GAAP operating profit, non-GAAP operating margin, non-GAAP net earnings and non-GAAP diluted net earnings per share can have a material impact on the equivalent GAAP earnings measure and cash flows.
  • Hewlett Packard Enterprise may not be able to immediately liquidate the short-term and long-term investments included in gross cash, which may limit the usefulness of gross cash as a liquidity measure.
  • Other companies may calculate revenue on a constant currency basis, non-GAAP operating profit, non-GAAP operating margin, non-GAAP net earnings and non-GAAP diluted net earnings per share differently than Hewlett Packard Enterprise does, limiting the usefulness of those measures for comparative purposes.

Compensation for limitations associated with use of non-GAAP financial measures
Hewlett Packard Enterprise compensates for the limitations on its use of non-GAAP financial measures by relying primarily on its GAAP results and using non-GAAP financial measures only as supplement. Hewlett Packard Enterprise also provides a reconciliation of each non-GAAP financial measure to its most directly comparable GAAP measure within this news release and in other written materials that include these non-GAAP financial measures, and Hewlett Packard Enterprise encourages investors to review carefully those reconciliations.

Usefulness of non-GAAP financial measures to investors
Hewlett Packard Enterprise believes that providing revenue on a constant currency basis, revenue adjusted for divestitures and currency, non-GAAP operating expenses, non-GAAP operating profit, non-GAAP operating margin, non-GAAP income tax rate, non-GAAP net earnings, non-GAAP diluted net earnings per share, gross cash, free cash flow, normalized free cash flow, net capital expenditures, net debt, net cash, operating company net debt and operating company net cash financial measures to investors in addition to the related GAAP measures provides investors with greater transparency to the information used by Hewlett Packard Enterprise's management in its financial and operational decision making and allows investors to see Hewlett Packard Enterprise's results "through the eyes" of management. Hewlett Packard Enterprise further believes that providing this information better enables Hewlett Packard Enterprise's investors to understand Hewlett Packard Enterprise's operating performance and to evaluate the efficacy of the methodology and information used by Hewlett Packard Enterprise's management to evaluate and measure such performance. Disclosure of these non-GAAP financial measures also facilitates comparisons of Hewlett Packard Enterprise's operating performance with the performance of other companies in Hewlett Packard Enterprise's industry that supplement their GAAP results with non-GAAP financial measures that may be calculated in a similar manner.

Hewlett Packard Enterprise to Present Live Audio Webcast of First Quarter Earnings Conference Call

PALO ALTO, CA--(Marketwired - Feb 9, 2017) - Hewlett Packard Enterprise (NYSE: HPE) will conduct a live audio webcast of its conference call to review its financial results for the first fiscal quarter, which ended January 31, 2017.

The call is scheduled for Thursday, February 23 at 5 p.m. ET / 2 p.m. PT, and the webcast will be available at www.hpe.com/investor/2017Q1Webcast.

A replay of the audio webcast will be available at the same website shortly after the call and will remain available for approximately one year.

About Hewlett Packard Enterprise
Hewlett Packard Enterprise is an industry leading technology company that enables customers to go further, faster. With the industry's most comprehensive portfolio, spanning the cloud to the data center to workplace applications, our technology and services help customers around the world make IT more efficient, more productive and more secure.

Contact Information

Editorial contact
Kate Holderness
corpmediarelations@hpe.com

Governance

HPE is committed to maintaining the highest standards of business conduct and corporate governance, which we believe are essential to running our business efficiently, serving our stockholders well and maintaining HPE's integrity in the marketplace.

Dan Ammann

Director since 2015

Corporate governance biography

Dan Ammann

Director since 2015

Member of: Finance and Investment

Mr. Ammann has served as the President of General Motors Company, an automotive company, since January 2014. From April 2011 to January 2014, Mr. Ammann served as Chief Financial Officer and Executive President of GM. Mr. Ammann joined GM in May 2010 as Vice President of Finance and Treasurer, a role he served in until April 2011. Mr. Ammann is also a director of Lyft. Mr. Ammann brings to our board of directors a robust understanding of consumer, manufacturing and financial industries as well as executive experience helping lead an international, multibillion dollar company through a financial transformation including an initial public offering.

Marc L. Andreessen

Director since 2015

Corporate governance biography

Marc L. Andreessen

Director since 2015

Member of: Finance and Investment, Technology

Mr. Andreessen is a co-founder of AH Capital Management, LLC, doing business as Andreessen Horowitz, a venture capital firm founded in July 2009. From 1999 to 2007, Mr. Andreessen served as Chairman of Opsware, Inc., a software company that he co-founded. During a portion of 1999, Mr. Andreessen served as Chief Technology Officer of America Online, Inc., a software company. Mr. Andreessen co-founded Netscape Communications Corporation, a software company, and served in various positions, including Chief Technology 104 Officer and Executive Vice President of Products, from 1994 to 1999. Mr. Andreessen is a director of Facebook, Inc. and several private companies, and was formerly a director of eBay Inc. Mr. Andreessen brings to our board of directors extensive experience as an Internet entrepreneur. Mr. Andreessen is also a recognized expert and visionary in the IT industry. In addition, he has extensive leadership, consumer industry, and technical expertise through his positions at Netscape, America Online and Opsware. His experience serving on the boards of both public and private technology companies provides him with valuable insight and experience.

Mike Angelakis

Director since 2015

Corporate governance biography

Mike Angelakis

Director since 2015

Member of: Audit, Finance and Investment (Chairperson)

Mr. Angelakis has served as Chairman and Chief Executive Officer of Atairos Management, an investment firm, since January 2016. Additionally, he served from November 2011 to July 2015 as Vice Chairman of Comcast and from March 2007 to July 2015 as Chief Financial Officer of Comcast. From 1999 to 2007, Mr. Angelakis was a Managing Director at Providence Equity Partners, LLC, a media and communications investment firm. Mr. Angelakis brings to our board of directors decades of investment, financial and managerial experience in the media and telecommunications industries, giving him an extensive understanding of the financial, operational and technological concerns important to a complex global operation operating in a dynamic industry.

Les Brun

Director since 2015

Corporate governance biography

Les Brun

Director since 2015

Member of: Audit, HR and Compensation (Chairperson)

Mr. Brun has served as the Chairman and Chief Executive Officer of Sarr Group, LLC, an investment holding company, since March 2006. From August 2011 to December 2013, Mr. Brun was managing director and head of investor relations for CCMP Capital Advisors, LLC, a private equity firm. Previously, from January 1991 to May 2005, Mr. Brun served as founder, Chairman and Chief Executive officer for Hamilton Lane Advisors, a private markets investment firm, and from April 1988 to September 1990 as co-founder and managing director of investment banking at Fidelity Bank in Philadelphia. Mr. Brun currently serves as Chairman of the board at CDK Global, Inc., a technology solutions company, Broadridge Financial Solutions, a financial industry servicing company, and Automatic Data Processing, Inc., a business outsourcing services company. Mr. Brun also serves on the board of Merck & Co., Inc., a pharmaceuticals company. Mr. Brun brings to the board robust business experience from a long career navigating capital markets and advisory experience from his service as a chairman and director on various public company boards, enabling him to provide the board with valuable financial, management, investor relations, and operational advice and expertise.

Pam Carter

Director since 2015

Corporate governance biography

Pam Carter

Director since 2015

Member of: Audit, HR and Compensation

Ms. Carter served as the Vice President of Cummins Inc., a machinery design and manufacturing company, and as President of the Cummins Distribution business unit from 2008 until May 2015. In 18 years at Cummins, Ms. Carter held executive positions in both their Filtration and Distribution business units after joining the company in 1997 as Vice President, General Counsel and Corporate Secretary. Ms. Carter serves as a director of Spectra Energy Corp., a natural gas company, and CSX Corp., a rail-based freight transportation company.

Ms. Carter brings to our board of directors strategic and operational expertise from her hands-on experience leading and growing a complex design and manufacturing business. Her variety of experienced roles in both legal and business leadership brings to our board the valuable perspective of regulatory and policy knowledge coupled with clear understanding of business strategy.

Klaus Kleinfeld

Director since 2015

Corporate governance biography

Klaus Kleinfeld

Director since 2015

Member of: HR and Compensation, Nominating, Governance and Social Responsibility

Klaus Kleinfeld has served since April 2010 as chairman and chief executive officer of Alcoa Inc., a global leader in lightweight metals technology, engineering and manufacturing for industries including automotive, aerospace, defense and commercial transportation. He also served as president and chief executive officer at Alcoa from 2008 to April 2010 and president and chief operating officer from 2007 through 2008. Before Alcoa, Kleinfeld served for 20 years at Siemens AG from 1987 to 2007, including as chief executive officer and president, a member of the managing board and executive vice president and chief operating officer of Siemens AG’s principal U.S. subsidiary, Siemens Corp. In addition to serving as a director of Alcoa, Kleinfeld serves as a director of Morgan Stanley and as a member of the supervisory board of Bayer AG.

Raymond J. Lane

Director since 2015

Corporate governance biography

Raymond J. Lane

Director since 2015

Member of: Fianance and Investment, Technology

Mr. Lane served as executive Chairman of HP Co. from September 2011 to April 2013 and as nonexecutive Chairman of HP Co. from November 2010 to September 2011. Since April 2013, Mr. Lane has served as Partner Emeritus of Kleiner Perkins Caufield & Byers, a private equity firm, after having previously served as one of its Managing Partners from 2000 to 2013. Prior to joining Kleiner Perkins, Mr. Lane was President and Chief Operating Officer and a director of Oracle Corporation, a software company. Before joining Oracle in 1992, Mr. Lane was a senior partner of Booz Allen Hamilton, a consulting company. Prior to Booz Allen Hamilton, Mr. Lane served as a division vice president with Electronic Data Systems Corporation, an IT services company that HP Co. acquired in August 2008. He was with IBM Corporation from 1970 to 1977. Mr. Lane served as Chairman of the Board of Trustees of Carnegie Mellon University from July 2009 to July 2015. He also serves as Vice Chairman of Special Olympics International. Mr. Lane is also a director of several private companies and is a former director of Quest Software, Inc. Mr. Lane brings to our board of directors significant experience as an early stage venture capital investor, principally in the information technology industry, through his position as Partner Emeritus of Kleiner Perkins. In addition, having served as President and Chief Operating Officer of Oracle, Mr. Lane has experience in worldwide operations, management and the development of corporate strategy. He has also gained valuable experience serving in board leadership roles for many public and private companies.

Ann M. Livermore

Director since 2015

Corporate governance biography

Ann M. Livermore

Director since 2015

Member of: Finance and Investment

Ms. Livermore served as Executive Vice President of the former HP Enterprise Business from 2004 until June 2011, and served as an Executive Advisor to HP Co.’s Chief Executive Officer through October 2015. Prior to that, Ms. Livermore served in various other positions with HP Co. in marketing, sales, research and development, and business management since joining the company in 1982. Ms. Livermore is also a director of United Parcel Service, Inc. Ms. Livermore brings to our board of directors extensive experience in senior leadership positions at HP Co. In addition, through her nearly thirty years at HP Co., Ms. Livermore has vast knowledge and experience in the areas of technology, marketing, sales, research and development and business management, as well as extensive knowledge of enterprise customers and their IT needs. Ms. Livermore also brings public company governance experience from her service on another public company board.

Raymond E. Ozzie

Director since 2015

Corporate governance biography

Raymond E. Ozzie

Director since 2015

Member of: Finance and Investment, Technology (Chairperson)

Mr. Ozzie has served as Chief Executive Officer of Talko Inc., a mobile communications applications and services company, since founding the company in December 2011. Previously, Mr. Ozzie served as Chief Software Architect of Microsoft Corporation from 2006 until December 2010, after having served as Chief Technical Officer of Microsoft from 2005 to 2006. Mr. Ozzie joined Microsoft in 2005 after Microsoft acquired Groove Networks, Inc., a collaboration software company he founded in 1997. Mr. Ozzie is a recognized software industry executive and entrepreneur who brings to our board of directors significant experience in the software industry. Mr. Ozzie also has extensive leadership and technical expertise through his positions at Microsoft, Groove Networks, and his experience at other public companies earlier in his career.

Gary M. Reiner

Director since 2015

Corporate governance biography

Gary M. Reiner

Director since 2015

Member of: Finance and Investment, Nominating, Governance and Social Responsibility (Chairperson), Technology

Mr. Reiner has served as Operating Partner at General Atlantic, a private equity firm, since November 2011. Previously, Mr. Reiner served as Special Advisor to General Atlantic from September 2010 to November 2011. Prior to that, Mr. Reiner served as Senior Vice President and Chief Information Officer at General Electric Company, a technology, media and financial services company, from 1996 until March 2010. Mr. Reiner previously held other executive positions with GE since joining the company in 1991. Earlier in his career, Mr. Reiner was a partner at Boston Consulting Group, a consulting company, where he focused on strategic and process issues for technology businesses. Mr. Reiner is also a director of Citigroup Inc. and several private companies, and is a former director of Genpact Limited. Mr. Reiner brings to our board of directors deep insight into how IT can help global companies succeed through his many years of experience as Chief Information Officer at GE. From his other positions at GE and his prior experience with Boston Consulting Group, he also brings decades of experience driving corporate strategy, information technology and best practices across complex organizations. In addition, Mr. Reiner brings to our board of directors his experience in private equity investing, with a particular focus on the IT industry.

Patricia F. Russo

Director since 2015

Corporate governance biography

Patricia F. Russo

Director since 2015

Ms. Russo serves as the Chairman of our board of directors. She previously served as Chief Executive Officer of Alcatel-Lucent, a communications company, from 2006 to 2008; and as Chairman of Lucent Technologies Inc., a communications company, from 2003 to 2006 and Chief Executive Officer and President of Lucent from 2002 to 2006. Ms. Russo is also a director of Alcoa Inc., General Motors Company and Merck & Co., Inc. In addition to her other public company directorships, she is a director of KKR Management LLC, the managing partner of KKR & Co., L.P. Ms. Russo previously served as the Lead Independent Director of HP Inc. from 2014 to 2015, and as a director of Schering-Plough Corporation from 1995 until its merger with Merck in 2009. Ms. Russo brings to our board of directors extensive global business experience, a broad understanding of the technology industry, strong management skills and operational expertise through her positions with Alcatel-Lucent and Lucent Technologies. In those positions, she dealt with a wide range of issues including mergers and acquisitions and business restructurings as she led Lucent’s recovery through a severe industry downturn and later a merger with Alcatel. Ms. Russo also brings to our board of directors public company governance experience as a member of boards and board committees of other public companies.

Lip-Bu Tan

Director since 2015

Corporate governance biography

Lip-Bu Tan

Director since 2015

Member of: Nominating, Governance & Social Responsibility, Technology

Mr. Tan has served as the President and Chief Executive Officer of Cadence Design Systems, an electronic design automation company, since 2009. Mr. Tan has also served as Founder and Chairman of Walden International, a venture capital firm, since 1987. Mr. Tan currently serves on the boards of Cadence Design Systems, Ambarella Inc., a video compression and image processing company and Semiconductor Manufacturing International Corp., a semiconductor company. Mr. Tan previously served on the boards of Flextronics International, an electronics manufacturing company, Inphi Corporation, a semiconductor company, SINA, a media company, SolarEdge Technologies, Inc., a solar energy company, and United Overseas Bank in Singapore. Mr. Tan’s extensive experience analyzing investments, managing companies and leading developments in the global technology industry allows him to bring to our board of directors valuable insights on business in today’s industry environment.

Meg Whitman

Director since 2015

Corporate governance biography

Meg Whitman

Director since 2015

Ms. Whitman brings to our board of directors unique experience in developing transformative business models, building global brands and driving sustained growth and expansion through her experience as Chairman, President and Chief Executive Officer of HP Co. and previously as President and Chief Executive Officer of eBay. From her previous executive positions with other large public companies, she also brings to our board of directors strong operational and strategic expertise. In addition, Ms. Whitman brings to our board of directors public company governance experience having previously served as a member of boards and board committees of other public companies.

Each member of our board of directors will have a term expiring at the 2017 annual stockholder meeting.

Maggie Wilderotter

Director since 2016

Corporate governance biography

Maggie Wilderotter

Director since 2016

Member of: Audit and HR and Compensation

Maggie Wilderotter was Chief Executive Officer of Frontier Communications from November, 2004 to April, 2015, and then Executive Chairman of the company until April, 2016. During her tenure with Frontier, the company grew from a regional telephone company with customer revenues of less than $1 billion to a national broadband, voice and video provider with operations in 29 states and annualized revenues in excess of $10 billion.

Previously, Mrs. Wilderotter was Senior Vice President of Global Business Strategy and ran the Worldwide Public Sector at Microsoft. Before this, she was President and CEO of Wink Communications Inc., Executive Vice President of National Operations for AT&T Wireless Services Inc., Chief Executive Officer of AT&T's Aviation Communications Division, and a Senior Vice President of McCaw Cellular Communications Inc.

Mrs. Wilderotter serves on the boards of Costco Wholesale Corporation, Hewlett Packard Enterprise Company, and Juno Therapeutics, Inc. as well as a number of private and non-profit organizations. Mrs. Wilderotter is also a Senior Advisor to the Blackstone Group.

Mrs. Wilderotter previously served on the President's National Security Telecommunications Advisory Committee (NSTAC) as both Vice Chairman and Chairman during her 4-year tenure ending in 2014. Mrs. Wilderotter also served until January, 2017 on the President's special Commission responsible for a recommendation report to the new President of the United States on Enhancing National Cybersecurity.

Mrs. Wilderotter is a member of the Board of Directors of The Conference Board; a member of the Executive Committee of the Catalyst Board of Directors; a member of the Business Council; WPO; Women Corporate Directors (WCD) and the Committee of 200.

Mrs. Wilderotter holds a bachelor's degree in economics from the College of the Holy Cross. She has been awarded an Honorary Doctor of Engineering degree from the Stevens Institute of Technology and an Honorary Doctor of Laws degree from the University of Rochester.

Solutions

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