|
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
October 31, 2017 |
Diluted net
earnings per share |
Three months ended
July 31, 2017 |
Diluted net earnings
per share |
Three months
ended October 31, 2016 |
Diluted net
earnings per share | ||||||||||||||||||
| GAAP net earnings from continuing operations | $ | 378 | $ | 0.23 | $ | 285 | $ | 0.17 | $ | 326 | $ | 0.19 | |||||||||||
| Non-GAAP adjustments: | |||||||||||||||||||||||
| Amortization of intangible assets | 86 | 0.05 | 97 | 0.06 | 57 | 0.03 | |||||||||||||||||
| Restructuring charges | 113 | 0.07 | 152 | 0.09 | 128 | 0.07 | |||||||||||||||||
| Transformation costs(a) | 328 | 0.20 | 31 | 0.02 | — | — | |||||||||||||||||
| Disaster charges(b) | 93 | 0.06 | — | — | — | — | |||||||||||||||||
| Acquisition and other related charges | 53 | 0.03 | 56 | 0.03 | 46 | 0.03 | |||||||||||||||||
| Separation costs | 202 | 0.12 | 5 | — | 118 | 0.07 | |||||||||||||||||
| Defined benefit plan settlement charges and remeasurement (benefit)(c) | (26 | ) | (0.02 | ) | (22 | ) | (0.01 | ) | — | — | |||||||||||||
| Gain on H3C and MphasiS divestitures | — | — | — | — | (251 | ) | (0.15 | ) | |||||||||||||||
| Tax indemnification adjustments | 2 | — | (10 | ) | (0.01 | ) | (311 | ) | (0.18 | ) | |||||||||||||
| Loss from equity interests (d) | 43 | 0.03 | 39 | 0.02 | 35 | 0.02 | |||||||||||||||||
| Adjustments for taxes | (180 | ) | (0.10 | ) | (69 | ) | (0.04 | ) | (406 | ) | (0.23 | ) | |||||||||||
| Tax valuation allowances and separation taxes (e) | (619 | ) | (0.38 | ) | (189 | ) | (0.11 | ) | — | — | |||||||||||||
| Tax settlements | — | — | — | — | 647 | 0.38 | |||||||||||||||||
| Non-GAAP net earnings
from continuing operations | $ | 473 | $ | 0.29 | $ | 375 | $ | 0.22 | $ | 389 | $ | 0.23 | |||||||||||
| GAAP (loss) earnings from
continuing operations | $ | (224 | ) | $ | 201 | $ | 576 | ||||||||||||||||
| Non-GAAP adjustments related to continuing operations: | |||||||||||||||||||||||
| Amortization of intangible assets | 86 | 97 | 57 | ||||||||||||||||||||
| Restructuring charges | 113 | 152 | 128 | ||||||||||||||||||||
| Transformation costs (a) | 328 | 31 | — | ||||||||||||||||||||
| Disaster charges (b) | 93 | — | — | ||||||||||||||||||||
| Acquisition and other related charges | 53 | 56 | 46 | ||||||||||||||||||||
| Separation costs | 202 | 5 | 118 | ||||||||||||||||||||
| Defined benefit plan settlement charges and remeasurement (benefit) (c) | (26 | ) | (22 | ) | — | ||||||||||||||||||
| Gain on H3C and MphasiS divestitures | — | — | (251 | ) | |||||||||||||||||||
| Non-GAAP earnings from
continuing operations | $ | 625 | $ | 520 | $ | 674 | |||||||||||||||||
| GAAP operating margin from continuing operations | (3 | )% | 3 | % | 8 | % | |||||||||||||||||
| Non-GAAP adjustments from continuing operations | 11 | % | 4 | % | 1 | % | |||||||||||||||||
| Non-GAAP operating margin from continuing operations | 8 | % | 7 | % | 9 | % | |||||||||||||||||
| GAAP net earnings (loss) from discontinued operations | $ | 146 | $ | 0.09 | $ | (120 | ) | $ | (0.07 | ) | $ | (24 | ) | $ | (0.01 | ) | |||||||
| Non-GAAP adjustments related to discontinued operations: | |||||||||||||||||||||||
| Amortization of intangible assets | 10 | 0.01 | 35 | 0.02 | 69 | 0.04 | |||||||||||||||||
| Restructuring charges | (2 | ) | — | 13 | 0.01 | 267 | 0.16 | ||||||||||||||||
| Acquisition and other related charges | — | — | — | — | 5 | — | |||||||||||||||||
| Separation costs | 70 | 0.04 | 254 | 0.15 | 175 | 0.10 | |||||||||||||||||
| Defined benefit plan settlement charges and remeasurement (benefit) (c) | (1 | ) | — | (2 | ) | — | — | — | |||||||||||||||
| Interest expense on Seattle debt | 8 | — | 11 | 0.01 | — | — | |||||||||||||||||
| Tax indemnification adjustments | 15 | 0.01 | — | — | — | — | |||||||||||||||||
| Adjustments for taxes | (50 | ) | (0.03 | ) | (81 | ) | (0.05 | ) | 154 | 0.09 | |||||||||||||
| Tax valuation allowances and separation taxes (e) | (166 | ) | (0.10 | ) | 12 | 0.01 | — | — | |||||||||||||||
| Non-GAAP net earnings from discontinued operations | $ | 30 | $ | 0.02 | $ | 122 | $ | 0.08 | $ | 646 | $ | 0.38 | |||||||||||
| Total GAAP net earnings | $ | 524 | $ | 0.32 | $ | 165 | $ | 0.10 | $ | 302 | $ | 0.18 | |||||||||||
| Total Non-GAAP net earnings | $ | 503 | $ | 0.31 | $ | 497 | $ | 0.30 | $ | 1,035 | $ | 0.61 | |||||||||||
- Represents amounts in connection with the HPE Next initiative and includes costs related to labor and non-labor restructuring, program management and IT charges, partially offset by a gain on sale of real estate.
- Represents amounts in connection with damages sustained by the Company as a result of Hurricane Harvey.
- 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.
- Represents the amortization of basis difference adjustments related to the H3C divestiture.
- Represents tax amounts in connection with the spin-off of the enterprise services business, Everett SpinCo, Inc. and the software business, Seattle SpinCo, Inc. For the three months ended October 31, 2017, this amount primarily includes the income tax benefit related to U.S. foreign tax credits generated.
