HP Inc. Reports Fiscal 2019 Second Quarter Results

	Six months ended
	April 30, 2019			April 30,2018
Net revenue	$	28,746		$	28,520
Costs and expenses:
Cost of revenue	23,405			23,236
Research and development	697			703
Selling, general and administrative^(a)	2,587			2,547
Restructuring and other charges	124			88
Acquisition-related charges	21			87
Amortization of intangible assets	58			40
Total costs and expenses	26,892			26,701

Earnings from operations	1,854			1,819
Interest and other, net^(a)	(71		)	(831		)
Earnings before taxes	1,783			988
(Provision for) benefit from taxes	(198		)	2,008
Net earnings	$	1,585		$	2,996

Net earnings per share:
Basic	$	1.03		$	1.83
Diluted	$	1.02		$	1.81

Cash dividends declared per share	$	0.32		$	0.28

Weighted-average shares used to compute net earnings per share:
Basic	1,543			1,640
Diluted	1,551			1,658

Pursuant to adoption of Accounting Standards Update (“ASU”) 2017-07, “Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Post-retirement Benefit Cost”, in the first quarter of fiscal year 2019, HP now reclassifies all components (excluding service cost component) of net periodic benefit cost from Selling, general and administrative expenses to Interest and other, net. HP reflected this change in prior reporting periods on an as-if basis.

HP INC. AND SUBSIDIARIES
ADJUSTMENTS TO GAAP NET EARNINGS, EARNINGS FROM OPERATIONS,
OPERATING MARGIN AND DILUTED NET EARNINGS PER SHARE
(Unaudited)
(In millions, except per share amounts)

	Three months ended
	April 30, 2019						January 31, 2019						April 30, 2018
	Amounts			Diluted net earnings per share			Amounts			Diluted net earnings per share			Amounts			Diluted net earnings per share
GAAP net earnings	$	782		$	0.51		$	803		$	0.51		$	1,058		$	0.64
Non-GAAP adjustments:
Restructuring and other charges	69			0.03			55			0.04			57			0.03
Acquisition-related charges	11			0.01			10			0.01			45			0.03
Amortization of intangible assets	29			0.02			29			0.02			20			0.01
Non-operating retirement-related credits	(10		)	(0.01		)	(12		)	(0.01		)	(53		)	(0.03		)
Debt extinguishment costs	—			—			—			—			126			0.08
Tax adjustments ^(a)	(60		)	(0.03		)	(76		)	(0.05		)	(455		)	(0.28		)
Non-GAAP net earnings	$	821		$	0.53		$	809		$	0.52		$	798		$	0.48

GAAP earnings from operations ^(b)	$	928					$	926					$	906
Non-GAAP adjustments:
Restructuring and other charges	69						55						57
Acquisition-related charges	11						10						45
Amortization of intangible assets	29						29						20
Non-GAAP earnings from operations	$	1,037					$	1,020					$	1,028

GAAP operating margin ^(b)	7		%				6		%				7		%
Non-GAAP adjustments	0		%				1		%				0		%
Non-GAAP operating margin	7		%				7		%				7		%

Includes tax impact on non-GAAP adjustments.

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