# EDGAR Filing Document

**Accession Number:** 0001645590
**File Stem:** 0001645590-23-000035
**Filing Date:** 2023-3
**Character Count:** 236038
**Document Hash:** d0b3e6b6c333579da9c68b69bd84caee
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001645590-23-000035.hdr.sgml**: 20230307

**ACCESSION NUMBER**: 0001645590-23-000035

**CONFORMED SUBMISSION TYPE**: 10-Q

**PUBLIC DOCUMENT COUNT**: 96

**CONFORMED PERIOD OF REPORT**: 20230131

**FILED AS OF DATE**: 20230307

**DATE AS OF CHANGE**: 20230307

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Hewlett Packard Enterprise Co
- **CENTRAL INDEX KEY:** 0001645590
- **STANDARD INDUSTRIAL CLASSIFICATION:** WHOLESALE-COMPUTER & PERIPHERAL EQUIPMENT & SOFTWARE [5045]
- **IRS NUMBER:** 473298624
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1031

**FILING VALUES:**
- **FORM TYPE:** 10-Q
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-37483
- **FILM NUMBER:** 23711043

**BUSINESS ADDRESS:**
- **STREET 1:** 1701 E MOSSY OAKS ROAD
- **CITY:** SPRING
- **STATE:** TX
- **ZIP:** 77389
- **BUSINESS PHONE:** 678-259-9860

**MAIL ADDRESS:**
- **STREET 1:** 1701 E MOSSY OAKS ROAD
- **CITY:** SPRING
- **STATE:** TX
- **ZIP:** 77389

?xml version="1.0" ? hpe-20230131

<u>[Table of Content](#i2c4659f3642b465bbf905d9dd6ad5f9d_7)</u>

&nbsp;&nbsp;&nbsp;&nbsp;**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 10-Q** 

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| | |
|:---|:---|
| **(Mark One)** | |
| ☒ | **QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934** |

---

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| | |
|:---|:---|
| **For the quarterly period ended:** | **January 31, 2023** |
| **Or** | **Or** |

---

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| | |
|:---|:---|
| ☐ | **TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934** |
| **For the transition period from&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;to&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;** | **For the transition period from&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;to&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;** |

---

---

| | |
|:---|:---|
| **Commission file number** | **001-37483** |

---

**HEWLETT PACKARD ENTERPRISE COMPANY**

(Exact name of registrant as specified in its charter)

---

| | |
|:---|:---|
| **Delaware** | **47-3298624** |
| (State or other jurisdiction of<br>incorporation or organization) | (I.R.S. employer<br>identification no.) |

---

---

| | | | |
|:---|:---|:---|:---|
| **1701 East Mossy Oaks Road,** | **Spring,** | **Texas** | **77389** |
| (Address of principal executive offices) | (Address of principal executive offices) | (Address of principal executive offices) | (Zip code) |
| **(678)** | **(678)** | **(678)** | **259-9860** |
| (Registrant's telephone number, including area code) | (Registrant's telephone number, including area code) | (Registrant's telephone number, including area code) | (Registrant's telephone number, including area code) |

---

---

| | | |
|:---|:---|:---|
| Securities registered pursuant to Section 12(b) of the Exchange Act: | Securities registered pursuant to Section 12(b) of the Exchange Act: | Securities registered pursuant to Section 12(b) of the Exchange Act: |
| **Title of each class** | **Trading Symbol(s)** | **Name of each exchange on which registered** |
| Common stock, par value $0.01 per share | HPE | New York Stock Exchange |

---

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 (the "Exchange Act") during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer", "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.

---

| | | | |
|:---|:---|:---|:---|
| Large accelerated filer | ☒ | Accelerated filer | ☐ |
| Non-accelerated filer | ☐ | Smaller reporting company | ☐ |
| | | Emerging growth company | ☐ |

---

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares of Hewlett Packard Enterprise Company common stock outstanding as of March 2, 2023 was 1,295,869,008 shares, par value $0.01.

------

<u>[Table of Content](#i2c4659f3642b465bbf905d9dd6ad5f9d_7)</u>

**HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES**

**Form 10-Q**

**For the Quarterly Period Ended January 31, 2023**

**Table of Contents**

---

| | | | |
|:---|:---|:---|:---|
| | | | **Page** |
| <u>[Forward-Looking Statements](#i2c4659f3642b465bbf905d9dd6ad5f9d_10)</u> | <u>[Forward-Looking Statements](#i2c4659f3642b465bbf905d9dd6ad5f9d_10)</u> | <u>[Forward-Looking Statements](#i2c4659f3642b465bbf905d9dd6ad5f9d_10)</u> | <u>[3](#i2c4659f3642b465bbf905d9dd6ad5f9d_10)</u> |
| <u>[Part I.](#i2c4659f3642b465bbf905d9dd6ad5f9d_13)</u> | <u>[Financial Information](#i2c4659f3642b465bbf905d9dd6ad5f9d_13)</u> | <u>[Financial Information](#i2c4659f3642b465bbf905d9dd6ad5f9d_13)</u> | |
| | <u>[Item 1.](#i2c4659f3642b465bbf905d9dd6ad5f9d_16)</u> | <u>[Financial Statements (](#i2c4659f3642b465bbf905d9dd6ad5f9d_16)[U](#i2c4659f3642b465bbf905d9dd6ad5f9d_16)[naudited)](#i2c4659f3642b465bbf905d9dd6ad5f9d_16)</u>  | <u>[4](#i2c4659f3642b465bbf905d9dd6ad5f9d_16)</u> |
| | <u>[Item 2.](#i2c4659f3642b465bbf905d9dd6ad5f9d_88)</u> | <u>[Management's Discussion and Analysis of Financial Condition and Results of Operations](#i2c4659f3642b465bbf905d9dd6ad5f9d_88)</u> | <u>[35](#i2c4659f3642b465bbf905d9dd6ad5f9d_88)</u> |
| | <u>[Item 3.](#i2c4659f3642b465bbf905d9dd6ad5f9d_136)</u> | <u>[Quantitative and Qualitative Disclosures About Market Risk](#i2c4659f3642b465bbf905d9dd6ad5f9d_136)</u> | <u>[53](#i2c4659f3642b465bbf905d9dd6ad5f9d_136)</u> |
| | <u>[Item 4.](#i2c4659f3642b465bbf905d9dd6ad5f9d_139)</u> | <u>[Controls and Procedures](#i2c4659f3642b465bbf905d9dd6ad5f9d_139)</u> | <u>[53](#i2c4659f3642b465bbf905d9dd6ad5f9d_139)</u> |
| <u>[Part II.](#i2c4659f3642b465bbf905d9dd6ad5f9d_142)</u> | <u>[Other Information](#i2c4659f3642b465bbf905d9dd6ad5f9d_142)</u> | <u>[Other Information](#i2c4659f3642b465bbf905d9dd6ad5f9d_142)</u> | |
| | <u>[Item 1.](#i2c4659f3642b465bbf905d9dd6ad5f9d_145)</u> | <u>[Legal Proceedings](#i2c4659f3642b465bbf905d9dd6ad5f9d_145)</u> | <u>[53](#i2c4659f3642b465bbf905d9dd6ad5f9d_145)</u> |
| | <u>[Item 1A.](#i2c4659f3642b465bbf905d9dd6ad5f9d_148)</u> | <u>[Risk Factors](#i2c4659f3642b465bbf905d9dd6ad5f9d_148)</u> | <u>[53](#i2c4659f3642b465bbf905d9dd6ad5f9d_148)</u> |
| | <u>[Item 2.](#i2c4659f3642b465bbf905d9dd6ad5f9d_151)</u> | <u>[Unregistered Sales of Equity Securities and Use of Proceeds](#i2c4659f3642b465bbf905d9dd6ad5f9d_151)</u> | <u>[53](#i2c4659f3642b465bbf905d9dd6ad5f9d_151)</u> |
| | <u>[Item 5.](#i2c4659f3642b465bbf905d9dd6ad5f9d_154)</u> | <u>[Other Information](#i2c4659f3642b465bbf905d9dd6ad5f9d_154)</u> | <u>[54](#i2c4659f3642b465bbf905d9dd6ad5f9d_154)</u> |
| | <u>[Item 6.](#i2c4659f3642b465bbf905d9dd6ad5f9d_157)</u> | <u>[Exhibits](#i2c4659f3642b465bbf905d9dd6ad5f9d_157)</u> | <u>[54](#i2c4659f3642b465bbf905d9dd6ad5f9d_157)</u> |
| <u>[Exhibit Index](#i2c4659f3642b465bbf905d9dd6ad5f9d_160)</u> | <u>[Exhibit Index](#i2c4659f3642b465bbf905d9dd6ad5f9d_160)</u> | <u>[Exhibit Index](#i2c4659f3642b465bbf905d9dd6ad5f9d_160)</u> | <u>[55](#i2c4659f3642b465bbf905d9dd6ad5f9d_160)</u> |
| <u>[Signature](#i2c4659f3642b465bbf905d9dd6ad5f9d_163)</u> | <u>[Signature](#i2c4659f3642b465bbf905d9dd6ad5f9d_163)</u> | <u>[Signature](#i2c4659f3642b465bbf905d9dd6ad5f9d_163)</u> | <u>[60](#i2c4659f3642b465bbf905d9dd6ad5f9d_163)</u> |

---

------

<u>[Table of Content](#i2c4659f3642b465bbf905d9dd6ad5f9d_7)</u>

**Forward-Looking Statements** 

*This Quarterly Report on Form 10-Q, including "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Item 2 of Part I, 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 the risks or uncertainties ever materialize or the assumptions prove incorrect, the results of Hewlett Packard Enterprise Company and its consolidated subsidiaries ("Hewlett Packard Enterprise") may differ materially from those expressed or implied by such forward-looking statements and assumptions. The words "believe", "expect", "anticipate", "intend", "will", "estimates", "may", "likely", "could", "should" and similar expressions are intended to identify such forward-looking statements. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including but not limited to the scope and duration of the novel coronavirus pandemic ("COVID-19"), other outbreaks, epidemics, pandemics, or public health crises, and the ongoing conflict between Russia and Ukraine, our actions in response thereto, and their impacts on our business, operations, liquidity and capital resources, employees, customers, partners, supply chain, financial results, and the world economy; any projections or expectations of revenue, margins, expenses, investments, effective tax rates, interest rates, the impact of tax law changes (including those in the Inflation Reduction Act of 2022) and related guidance and regulations, net earnings, net earnings per share, cash flows, liquidity and capital resources, inventory, goodwill, impairment charges, hedges and derivatives and related offsets, order backlog, benefit plan funding, deferred tax assets, share repurchases, currency exchange rates, repayments of debts including our asset-backed debt securities, or other financial items; recent amendments to accounting guidance and any potential impacts on our financial reporting therefrom; any projections of the amount, execution, timing, and results of any transformation or impact of cost savings, restructuring plans, including estimates and assumptions related to the anticipated benefits, cost savings, or charges of implementing such transformation and restructuring plans; any statements of the plans, strategies, and objectives of management for future operations, as well as the execution of corporate transactions or contemplated acquisitions, research and development expenditures, and any resulting benefit, cost savings, charges, or revenue or profitability improvements; any statements concerning the expected development, performance, market share, or competitive performance relating to products or services; any statements concerning technological and market trends, the pace of technological innovation, and adoption of new technologies, including products and services offered by Hewlett Packard Enterprise; any statements regarding current or future macroeconomic trends or events and the impacts of those trends and events on Hewlett Packard Enterprise and our financial performance, including but not limited to supply chain, inflation, and demand for our products and services, and our actions to mitigate such impacts on our business; any statements regarding future regulatory trends and the resulting legal and reputational exposure, including but not limited to those relating to environmental, social, and governance issues; any statements regarding pending investigations, claims, or disputes; any statements of expectation or belief; and any statements of 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, including but not limited to supply chain constraints, the inflationary environment, the ongoing conflict between Russia and Ukraine, and the relationship between China and the U.S.; the need to effectively manage third-party suppliers and distribute Hewlett Packard Enterprise's products and services; the protection of Hewlett Packard Enterprise's intellectual property assets, including intellectual property licensed from third parties and intellectual property shared with its former parent; risks associated with Hewlett Packard Enterprise's international operations (including from pandemics and public health problems, such as the outbreak of COVID-19, and geopolitical events, such as those mentioned above); the development of and transition to 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, clients, and partners, including any impact thereon resulting from macroeconomic or geopolitical events; the hiring and retention of key employees; the execution, integration, and other risks associated with business combination and investment transactions; the impact of changes to privacy, cybersecurity, environmental, global trade, and other governmental regulations; changes in our product, lease, intellectual property, or real estate portfolio; the payment or non-payment of a dividend for any period; the efficacy of using non-GAAP, rather than GAAP, financial measures in business projections and planning; the judgments required in connection with determining revenue recognition; impact of company policies and related compliance; utility of segment realignments; allowances for recovery of receivables and warranty obligations; provisions for, and resolution of, pending investigations, claims, and disputes; the impacts of the Inflation Reduction Act of 2022 and related guidance or regulations; and other risks that are described herein, including but not limited to the items discussed in "Risk Factors" in Item 1A of Part I of the Annual Report on Form 10-K for the fiscal year ended October 31, 2022 and that are otherwise described or updated from time to time in Hewlett Packard Enterprise's Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and in other filings made with the Securities and Exchange Commission. Hewlett Packard Enterprise assumes no obligation and does not intend to update these forward-looking statements, except as required by applicable law.*

------

<u>[Table of Content](#i2c4659f3642b465bbf905d9dd6ad5f9d_7)</u>

**PART I. FINANCIAL INFORMATION**

**Item 1. Financial Statements.**

**Index**

---

| | |
|:---|:---|
| | **Page** |
| <u>[Condensed Consolidated Statements of Earnings for the three](#i2c4659f3642b465bbf905d9dd6ad5f9d_22)[months ended](#i2c4659f3642b465bbf905d9dd6ad5f9d_22)[January](#i2c4659f3642b465bbf905d9dd6ad5f9d_22)[31, 202](#i2c4659f3642b465bbf905d9dd6ad5f9d_22)[3](#i2c4659f3642b465bbf905d9dd6ad5f9d_22)[and 202](#i2c4659f3642b465bbf905d9dd6ad5f9d_22)[2](#i2c4659f3642b465bbf905d9dd6ad5f9d_22)[(Unaudited)](#i2c4659f3642b465bbf905d9dd6ad5f9d_22)</u> | <u>[5](#i2c4659f3642b465bbf905d9dd6ad5f9d_22)</u> |
| <u>[Condensed Consolidated Statements of Comprehensive Income for the three](#i2c4659f3642b465bbf905d9dd6ad5f9d_25)[months ended J](#i2c4659f3642b465bbf905d9dd6ad5f9d_25)[anuary](#i2c4659f3642b465bbf905d9dd6ad5f9d_25)[31, 202](#i2c4659f3642b465bbf905d9dd6ad5f9d_25)[3](#i2c4659f3642b465bbf905d9dd6ad5f9d_25)[and 202](#i2c4659f3642b465bbf905d9dd6ad5f9d_25)[2](#i2c4659f3642b465bbf905d9dd6ad5f9d_25)[(Unaudited)](#i2c4659f3642b465bbf905d9dd6ad5f9d_25)</u> | <u>[6](#i2c4659f3642b465bbf905d9dd6ad5f9d_25)</u> |
| <u>[Condensed Consolidated Balance Sheets as of J](#i2c4659f3642b465bbf905d9dd6ad5f9d_28)[anuary](#i2c4659f3642b465bbf905d9dd6ad5f9d_28)[31, 202](#i2c4659f3642b465bbf905d9dd6ad5f9d_28)[3](#i2c4659f3642b465bbf905d9dd6ad5f9d_28)[(Unaudited) and October 31, 202](#i2c4659f3642b465bbf905d9dd6ad5f9d_28)[2](#i2c4659f3642b465bbf905d9dd6ad5f9d_28)[(Audited)](#i2c4659f3642b465bbf905d9dd6ad5f9d_28)</u> | <u>[7](#i2c4659f3642b465bbf905d9dd6ad5f9d_28)</u> |
| <u>[Condensed Consolidated Statements of Cash Flows for the](#i2c4659f3642b465bbf905d9dd6ad5f9d_31)[three](#i2c4659f3642b465bbf905d9dd6ad5f9d_31)[months ended J](#i2c4659f3642b465bbf905d9dd6ad5f9d_31)[anuary](#i2c4659f3642b465bbf905d9dd6ad5f9d_31)[31, 202](#i2c4659f3642b465bbf905d9dd6ad5f9d_31)[3](#i2c4659f3642b465bbf905d9dd6ad5f9d_31)[and 202](#i2c4659f3642b465bbf905d9dd6ad5f9d_31)[2](#i2c4659f3642b465bbf905d9dd6ad5f9d_31)[(Unaudited)](#i2c4659f3642b465bbf905d9dd6ad5f9d_31)</u> | <u>[8](#i2c4659f3642b465bbf905d9dd6ad5f9d_31)</u> |
| <u>[Condensed Consolidated Statements of Stockholders' Equity for the three](#i2c4659f3642b465bbf905d9dd6ad5f9d_34)[months ended J](#i2c4659f3642b465bbf905d9dd6ad5f9d_34)[anuary](#i2c4659f3642b465bbf905d9dd6ad5f9d_34)[31, 202](#i2c4659f3642b465bbf905d9dd6ad5f9d_34)[3](#i2c4659f3642b465bbf905d9dd6ad5f9d_34)[and 202](#i2c4659f3642b465bbf905d9dd6ad5f9d_34)[2](#i2c4659f3642b465bbf905d9dd6ad5f9d_34)[(Unaudited)](#i2c4659f3642b465bbf905d9dd6ad5f9d_34)</u> | <u>[9](#i2c4659f3642b465bbf905d9dd6ad5f9d_34)</u> |
| <u>[Notes to Condensed Consolidated Financial Statements (Unaudited)](#i2c4659f3642b465bbf905d9dd6ad5f9d_37)</u> | <u>[10](#i2c4659f3642b465bbf905d9dd6ad5f9d_37)</u> |
| &nbsp;&nbsp;<u>[Note 1: Overview and Summary of Significant Accounting Policies](#i2c4659f3642b465bbf905d9dd6ad5f9d_40)</u> | <u>[10](#i2c4659f3642b465bbf905d9dd6ad5f9d_40)</u> |
| &nbsp;&nbsp;<u>[Note 2: Segment Information](#i2c4659f3642b465bbf905d9dd6ad5f9d_43)</u> | <u>[11](#i2c4659f3642b465bbf905d9dd6ad5f9d_43)</u> |
| &nbsp;&nbsp;<u>[Note 3: Transformation Programs](#i2c4659f3642b465bbf905d9dd6ad5f9d_46)</u> | <u>[14](#i2c4659f3642b465bbf905d9dd6ad5f9d_46)</u> |
| &nbsp;&nbsp;<u>[Note 4: Retirement Benefit Plans](#i2c4659f3642b465bbf905d9dd6ad5f9d_49)</u> | <u>[16](#i2c4659f3642b465bbf905d9dd6ad5f9d_49)</u> |
| &nbsp;&nbsp;<u>[Note 5: Taxes on Earnings](#i2c4659f3642b465bbf905d9dd6ad5f9d_52)</u> | <u>[16](#i2c4659f3642b465bbf905d9dd6ad5f9d_52)</u> |
| &nbsp;&nbsp;<u>[Note 6: Balance Sheet Details](#i2c4659f3642b465bbf905d9dd6ad5f9d_55)</u> | <u>[17](#i2c4659f3642b465bbf905d9dd6ad5f9d_55)</u> |
| &nbsp;&nbsp;<u>[Note 7: Accounting for Leases as a Lessor](#i2c4659f3642b465bbf905d9dd6ad5f9d_61)</u> | <u>[19](#i2c4659f3642b465bbf905d9dd6ad5f9d_61)</u> |
| &nbsp;&nbsp;<u>[Note 8: Goodwill](#i2c4659f3642b465bbf905d9dd6ad5f9d_64)</u> | <u>[22](#i2c4659f3642b465bbf905d9dd6ad5f9d_64)</u> |
| &nbsp;&nbsp;<u>[Note 9: Fair Value](#i2c4659f3642b465bbf905d9dd6ad5f9d_67)</u> | <u>[23](#i2c4659f3642b465bbf905d9dd6ad5f9d_67)</u> |
| &nbsp;&nbsp;<u>[Note 10: Financial Instruments](#i2c4659f3642b465bbf905d9dd6ad5f9d_70)</u> | <u>[25](#i2c4659f3642b465bbf905d9dd6ad5f9d_70)</u> |
| &nbsp;&nbsp;<u>[Note 11: Borrowings](#i2c4659f3642b465bbf905d9dd6ad5f9d_73)</u> | <u>[28](#i2c4659f3642b465bbf905d9dd6ad5f9d_73)</u> |
| &nbsp;&nbsp;<u>[Note 12: Stockholders' Equity](#i2c4659f3642b465bbf905d9dd6ad5f9d_76)</u> | <u>[29](#i2c4659f3642b465bbf905d9dd6ad5f9d_76)</u> |
| &nbsp;&nbsp;<u>[Note 13: Net Earnings Per Share](#i2c4659f3642b465bbf905d9dd6ad5f9d_79)</u> | <u>[30](#i2c4659f3642b465bbf905d9dd6ad5f9d_79)</u> |
| &nbsp;&nbsp;<u>[Note 14: Litigation](#i2c4659f3642b465bbf905d9dd6ad5f9d_82)[,](#i2c4659f3642b465bbf905d9dd6ad5f9d_82)[Contingencies](#i2c4659f3642b465bbf905d9dd6ad5f9d_82)[, and Commitments](#i2c4659f3642b465bbf905d9dd6ad5f9d_82)</u> | <u>[30](#i2c4659f3642b465bbf905d9dd6ad5f9d_82)</u> |
| &nbsp;&nbsp;<u>[Note 15:](#i2c4659f3642b465bbf905d9dd6ad5f9d_1586)[E](#i2c4659f3642b465bbf905d9dd6ad5f9d_1586)[quity](#i2c4659f3642b465bbf905d9dd6ad5f9d_1586)[Method](#i2c4659f3642b465bbf905d9dd6ad5f9d_1586)[Investment](#i2c4659f3642b465bbf905d9dd6ad5f9d_1586)[s](#i2c4659f3642b465bbf905d9dd6ad5f9d_1586)</u> | <u>[34](#i2c4659f3642b465bbf905d9dd6ad5f9d_1586)</u> |
| &nbsp;&nbsp;<u>[Note 1](#i2c4659f3642b465bbf905d9dd6ad5f9d_1647)[6](#i2c4659f3642b465bbf905d9dd6ad5f9d_1647)[: Subsequent Events](#i2c4659f3642b465bbf905d9dd6ad5f9d_1647)</u> | <u>[34](#i2c4659f3642b465bbf905d9dd6ad5f9d_1647)</u> |

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<u>[Table of Content](#i2c4659f3642b465bbf905d9dd6ad5f9d_7)</u>

**HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES**

**Condensed Consolidated Statements of Earnings**

**(Unaudited)**

---

| | | |
|:---|:---|:---|
| | **For the three months ended January 31,** | **For the three months ended January 31,** |
| | **2023** | **2022** |
| | **In millions, except per share amounts** | **In millions, except per share amounts** |
| Net revenue: |  |  |
| &nbsp;&nbsp;&nbsp;Products | $5114 | $4243 |
| &nbsp;&nbsp;&nbsp;Services | 2572 | 2596 |
| &nbsp;&nbsp;&nbsp;Financing income | 123 | 122 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total net revenue | 7809 | 6961 |
| Costs and expenses: |  |  |
| &nbsp;&nbsp;&nbsp;Cost of products | 3460 | 3016 |
| &nbsp;&nbsp;&nbsp;Cost of services | 1613 | 1555 |
| &nbsp;&nbsp;&nbsp;Financing cost | 78 | 46 |
| &nbsp;&nbsp;&nbsp;Research and development | 623 | 504 |
| &nbsp;&nbsp;&nbsp;Selling, general and administrative | 1257 | 1201 |
| &nbsp;&nbsp;&nbsp;Amortization of intangible assets | 73 | 73 |
| &nbsp;&nbsp;&nbsp;Transformation costs | 102 | 111 |
| &nbsp;&nbsp;Disaster charges (recovery) | 1 | (1) |
| &nbsp;&nbsp;&nbsp;Acquisition, disposition and other related charges | 11 | 8 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total costs and expenses | 7218 | 6513 |
| Earnings from operations | 591 | 448 |
| Interest and other, net | (25) | (5) |
| Tax indemnification and related adjustments | (1) | (17) |
| Non-service net periodic benefit credit |  | 36 |
| Earnings from equity interests | 58 | 31 |
| Earnings before (provision) benefit for taxes | 623 | 493 |
| (Provision) benefit for taxes | (122) | 20 |
| Net earnings | $501 | $513 |
| Net earnings per share: |  |  |
| &nbsp;&nbsp;&nbsp;Basic | $0.39 | $0.39 |
| &nbsp;&nbsp;&nbsp;Diluted | $0.38 | $0.39 |
| Weighted-average shares used to compute net earnings per share: |  |  |
| &nbsp;&nbsp;&nbsp;Basic | 1298 | 1304 |
| &nbsp;&nbsp;&nbsp;Diluted | 1315 | 1325 |

---

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

------

<u>[Table of Content](#i2c4659f3642b465bbf905d9dd6ad5f9d_7)</u>

**HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES**

**Condensed Consolidated Statements of Comprehensive Income**

**(Unaudited)**

---

| | | |
|:---|:---|:---|
| | **For the three months ended January 31,** | **For the three months ended January 31,** |
| | **2023** | **2022** |
| | **In millions** | **In millions** |
| Net earnings | $501 | $513 |
| &nbsp;&nbsp;&nbsp;Other comprehensive (loss) income before taxes: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Change in net unrealized gains (losses) on available-for-sale securities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net unrealized gains (losses) arising during the period | 5 | (1) |
|  | 5 | (1) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Change in net unrealized (losses) gains on cash flow hedges: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net unrealized (losses) gains arising during the period | (518) | 215 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net losses (gains) reclassified into earnings | 247 | (201) |
|  | (271) | 14 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Change in unrealized components of defined benefit plans: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net unrealized gains arising during the period |  | 6 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization of net actuarial loss and prior service benefit | 35 | 41 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Curtailments, settlements and other |  | 1 |
|  | 35 | 48 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Change in cumulative translation adjustment | 20 | (11) |
| &nbsp;&nbsp;&nbsp;Other comprehensive (loss) income before taxes | (211) | 50 |
| &nbsp;&nbsp;&nbsp;Benefit (provision) for taxes | 53 | (13) |
| Other comprehensive (loss) income, net of taxes | (158) | 37 |
| Comprehensive income | $343 | $550 |

---

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

------

<u>[Table of Content](#i2c4659f3642b465bbf905d9dd6ad5f9d_7)</u>

&nbsp;&nbsp;&nbsp;&nbsp;**HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES**

**Condensed Consolidated Balance Sheets** 

---

| | | |
|:---|:---|:---|
| | **As of** | **As of** |
| | **January 31, 2023** | **October 31, 2022** |
| | **(Unaudited)** | **(Audited)** |
| | **In millions, except par value** | **In millions, except par value** |
| **ASSETS** | | |
| Current assets: |  |  |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents | $2530 | $4163 |
| &nbsp;&nbsp;&nbsp;Accounts receivable, net of allowances | 4201 | 4101 |
| &nbsp;&nbsp;&nbsp;Financing receivables, net of allowances | 3726 | 3522 |
| &nbsp;&nbsp;&nbsp;Inventory | 4644 | 5161 |
| &nbsp;&nbsp;&nbsp;Other current assets | 3133 | 3559 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current assets | 18234 | 20506 |
| Property, plant and equipment | 5990 | 5784 |
| Long-term financing receivables and other assets | 11046 | 10537 |
| Investments in equity interests | 2225 | 2160 |
| Goodwill | 17421 | 17403 |
| Intangible assets | 675 | 733 |
| Total assets | $55591 | $57123 |
| **LIABILITIES AND STOCKHOLDERS' EQUITY** |  |  |
| Current liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;Notes payable and short-term borrowings | $5349 | $4612 |
| &nbsp;&nbsp;&nbsp;Accounts payable | 6535 | 8717 |
| &nbsp;&nbsp;&nbsp;Employee compensation and benefits | 1284 | 1401 |
| &nbsp;&nbsp;&nbsp;Taxes on earnings | 210 | 176 |
| &nbsp;&nbsp;&nbsp;Deferred revenue | 3533 | 3451 |
| &nbsp;&nbsp;&nbsp;Accrued restructuring | 185 | 192 |
| &nbsp;&nbsp;&nbsp;Other accrued liabilities | 4380 | 4625 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current liabilities | 21476 | 23174 |
| Long-term debt | 7577 | 7853 |
| Other non-current liabilities | 6475 | 6187 |
| Commitments and contingencies |  |  |
| Stockholders' equity |  |  |
| HPE stockholders' equity: |  |  |
| &nbsp;&nbsp;Common stock, $0.01 par value (9,600 shares authorized; 1,297 and 1,281 shares issued and outstanding at January 31, 2023 and October 31, 2022, respectively) | 13 | 13 |
| &nbsp;&nbsp;&nbsp;Additional paid-in capital | 28259 | 28299 |
| &nbsp;&nbsp;&nbsp;Accumulated deficit | (5005) | (5350) |
| &nbsp;&nbsp;&nbsp;Accumulated other comprehensive loss | (3256) | (3098) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total HPE stockholders' equity | 20011 | 19864 |
| Non-controlling interests | 52 | 45 |
| Total stockholders' equity | 20063 | 19909 |
| Total liabilities and stockholders' equity | $55591 | $57123 |

---

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

------

<u>[Table of Content](#i2c4659f3642b465bbf905d9dd6ad5f9d_7)</u>

**HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES**

**Condensed Consolidated Statements of Cash Flows (Unaudited)**

---

| | | |
|:---|:---|:---|
| | **For the three months ended January 31,** | **For the three months ended January 31,** |
| | **2023** | **2022** |
| | **In millions** | **In millions** |
| Cash flows from operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;Net earnings | $501 | $513 |
| &nbsp;&nbsp;&nbsp;Adjustments to reconcile net earnings to net cash used in operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization | 656 | 621 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock-based compensation expense | 140 | 128 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Provision for inventory and doubtful accounts | 45 | 46 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Restructuring charges | 72 | 37 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred taxes on earnings | 20 | 37 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Earnings from equity interests | (58) | (31) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other, net | (60) | (27) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Changes in operating assets and liabilities, net of acquisitions: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable | (112) | 543 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Financing receivables | (523) | 181 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventory | 495 | (834) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | (2195) | (438) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Taxes on earnings | 46 | (111) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Restructuring | (96) | (114) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other assets and liabilities | 240 | (627) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash used in operating activities | (829) | (76) |
| Cash flows from investing activities: |  |  |
| &nbsp;&nbsp;&nbsp;Investment in property, plant and equipment | (794) | (624) |
| &nbsp;&nbsp;&nbsp;Proceeds from sale of property, plant and equipment | 159 | 123 |
| &nbsp;&nbsp;&nbsp;Purchases of investments |  | (21) |
| &nbsp;&nbsp;&nbsp;Proceeds from maturities and sales of investments | 4 | 44 |
| &nbsp;&nbsp;&nbsp;Financial collateral posted | (682) | (10) |
| &nbsp;&nbsp;&nbsp;Financial collateral received | 108 | 153 |
| &nbsp;&nbsp;&nbsp;Payments made in connection with business acquisitions, net of cash acquired | (32) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash used in investing activities | (1237) | (335) |
| Cash flows from financing activities: |  |  |
| &nbsp;&nbsp;&nbsp;Short-term borrowings with original maturities less than 90 days, net | 745 | 53 |
| &nbsp;&nbsp;&nbsp;Proceeds from debt, net of issuance costs | 261 | 1276 |
| &nbsp;&nbsp;&nbsp;Payment of debt | (661) | (633) |
| &nbsp;&nbsp;&nbsp;Net payments related to stock-based award activities | (107) | (57) |
| &nbsp;&nbsp;&nbsp;Repurchase of common stock | (73) | (129) |
| &nbsp;&nbsp;&nbsp;Cash dividends paid to shareholders | (156) | (155) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by financing activities | 9 | 355 |
| Effect of exchange rate changes on cash, cash equivalents, and restricted cash | 138 |  |
| Decrease in cash, cash equivalents and restricted cash | (1919) | (56) |
| Cash, cash equivalents and restricted cash at beginning of period | 4763 | 4332 |
| Cash, cash equivalents and restricted cash at end of period | $2844 | $4276 |

---

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

------

<u>[Table of Content](#i2c4659f3642b465bbf905d9dd6ad5f9d_7)</u>

**HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES**

**Condensed Consolidated Statements of Stockholders' Equity (Unaudited)**

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **Common Stock** | **Common Stock** | | | | | | |
| **<u>For the three months ended January 31, 2023</u>** | **Number of Shares** | **Par Value** |<br>**Additional Paid-in Capital** |<br>**Accumulated Deficit** |<br>**Accumulated<br>Other<br>Comprehensive<br>Loss** |<br>**Equity<br>Attributable<br>to the<br>Company** |<br>**Non-<br>controlling<br>Interests** |<br>**Total<br>Equity** |
| | **In millions, except number of shares in thousands** | **In millions, except number of shares in thousands** | **In millions, except number of shares in thousands** | **In millions, except number of shares in thousands** | **In millions, except number of shares in thousands** | **In millions, except number of shares in thousands** | **In millions, except number of shares in thousands** | **In millions, except number of shares in thousands** |
| Balance at October 31, 2022 | 1281037 | $13 | $28299 | $(5350) | $(3098) | $19864 | $45 | $19909 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net earnings |  |  |  | 501 |  | 501 | 7 | 508 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other comprehensive loss |  |  |  |  | (158) | (158) |  | (158) |
| &nbsp;&nbsp;&nbsp;Comprehensive income |  |  |  |  |  | 343 | 7 | 350 |
| &nbsp;&nbsp;&nbsp;Stock-based compensation expense |  |  | 140 |  |  | 140 |  | 140 |
| &nbsp;&nbsp;Tax withholding related to vesting of employee stock plans |  |  | (134) |  |  | (134) |  | (134) |
| &nbsp;&nbsp;&nbsp;Issuance of common stock in connection with employee stock plans and other | 20352 |  | 24 |  |  | 24 |  | 24 |
| &nbsp;&nbsp;&nbsp;Repurchases of common stock | (4505) |  | (70) |  |  | (70) |  | (70) |
| &nbsp;&nbsp;Cash dividends declared ($0.12 per share) |  |  |  | (156) |  | (156) |  | (156) |
| Balance at January 31, 2023 | 1296884 | $13 | $28259 | $(5005) | $(3256) | $20011 | $52 | $20063 |

---

) Represents the impact of the adoption of the accounting standard on the s on financial instruments.

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **Common Stock** | **Common Stock** | | | | | | |
| **<u>For the three months ended January 31, 2022</u>** | **Number of Shares** | **Par Value** |<br>**Additional Paid-in Capital** |<br> **Accumulated Deficit** |<br>**Accumulated<br>Other<br>Comprehensive<br>Loss** |<br>**Equity<br>Attributable<br>to the<br>Company** |<br>**Non-<br>controlling<br>Interests** |<br>**Total<br>Equity** |
| | **In millions, except number of shares in thousands** | **In millions, except number of shares in thousands** | **In millions, except number of shares in thousands** | **In millions, except number of shares in thousands** | **In millions, except number of shares in thousands** | **In millions, except number of shares in thousands** | **In millions, except number of shares in thousands** | **In millions, except number of shares in thousands** |
| Balance at October 31, 2021 | 1294634 | $13 | $28470 | $(5597) | $(2915) | $19971 | $46 | $20017 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net earnings |  |  |  | 513 |  | 513 | 1 | 514 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other comprehensive income |  |  |  |  | 37 | 37 |  | 37 |
| &nbsp;&nbsp;&nbsp;Comprehensive income |  |  |  |  |  | 550 | 1 | 551 |
| &nbsp;&nbsp;&nbsp;Stock-based compensation expense |  |  | 128 |  |  | 128 |  | 128 |
| &nbsp;&nbsp;&nbsp;Tax withholding related to vesting of employee stock plans |  |  | (82) |  |  | (82) |  | (82) |
| &nbsp;&nbsp;&nbsp;Issuance of common stock in connection with employee stock plans and other | 13449 |  | 26 |  |  | 26 |  | 26 |
| &nbsp;&nbsp;&nbsp;Repurchases of common stock | (7824) |  | (120) |  |  | (120) |  | (120) |
| &nbsp;&nbsp;Cash dividends declared ($0.12 per share) |  |  |  | (155) |  | (155) |  | (155) |
| Balance at January 31, 2022 | 1300259 | $13 | $28422 | $(5239) | $(2878) | $20318 | $47 | $20365 |

---

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

------

<u>[Table of Content](#i2c4659f3642b465bbf905d9dd6ad5f9d_7)</u>

**HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES**

**Notes to Condensed Consolidated Financial Statements** 

**(Unaudited)**

**Note 1: Overview and Summary of Significant Accounting Policies**

*Background*

Hewlett Packard Enterprise Company ("Hewlett Packard Enterprise," "HPE," or the "Company") is a global technology leader focused on developing intelligent solutions that allow customers to capture, analyze and act upon data seamlessly from edge to cloud. Hewlett Packard Enterprise enables customers to accelerate business outcomes by driving new business models, creating new customer and employee experiences, and increasing operational efficiency today and into the future. Hewlett Packard Enterprise's customers range from small- and medium-sized businesses to large global enterprises and governmental entities.

*Basis of Presentation and Consolidation*

The Condensed Consolidated Financial Statements of the Company were prepared in accordance with United States ("U.S.") Generally Accepted Accounting Principles ("GAAP"). The Company's unaudited Condensed Consolidated Financial Statements include the accounts of the Company and all subsidiaries and affiliates in which the Company has a controlling financial interest or is the primary beneficiary. All intercompany transactions and accounts within the consolidated businesses of the Company have been eliminated. In the opinion of management, the accompanying unaudited Condensed Consolidated Financial Statements of Hewlett Packard Enterprise contain all adjustments, including normal recurring adjustments, necessary to present fairly the Company's financial position as of January 31, 2023 and October 31, 2022, its results of operations for the three months ended January 31, 2023 and 2022, its cash flows for the three months ended January 31, 2023 and 2022, and its statements of stockholders' equity for the three months ended January 31, 2023 and 2022.

The results of operations and the cash flows for the three months ended January 31, 2023 are not necessarily indicative of the results to be expected for the full year. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with the Company's Annual Report on Form 10-K for the fiscal year ended October 31, 2022, as filed with the U.S. Securities and Exchange Commission ("SEC") on December 8, 2022.

*Segment Realignment*

Effective at the beginning of the first quarter of fiscal 2023, in order to align its segment financial reporting more closely with its current business structure, the Company implemented an organizational change with the transfer of certain storage networking products, previously reported within the Storage reportable segment, to the Compute reportable segment.

The Company reflected these changes to its segment information retrospectively to the earliest period presented, which primarily resulted in the realignment of net revenue and operating profit for each of the segments as described above. These changes had no impact on Hewlett Packard Enterprise's previously reported consolidated net revenue, net earnings, net earnings per share ("EPS") or total assets.

*Significant Accounting Policies*

There have been no changes to the Company's significant accounting policies described in Part II, Item 8, Note 1, "Overview and Summary of Significant Accounting Policies," of the Company's Annual Report on Form 10-K for the fiscal year ended October 31, 2022.

*Recently Enacted Accounting Pronouncements*

Although there are new accounting pronouncements issued by the Financial Accounting Standards Board ("FASB") that the Company will adopt, as applicable, the Company does not believe any of these accounting pronouncements will have a material impact on its Condensed Consolidated Financial Statements.

------

<u>[Table of Content](#i2c4659f3642b465bbf905d9dd6ad5f9d_7)</u>

**HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES**

**Notes to Condensed Consolidated Financial Statements (Continued)**

**(Unaudited)**

**Note 2: Segment Information** 

Hewlett Packard Enterprise's operations are organized into six segments for financial reporting purposes: Compute, High Performance Computing & Artificial Intelligence ("HPC & AI"), Storage, Intelligent Edge, Financial Services ("FS"), and Corporate Investments and Other. Hewlett Packard Enterprise's organizational structure is based on a number of factors that the Chief Operating Decision Maker, who is the Chief Executive Officer, uses to evaluate, view, and run the Company's business operations, which include, but are not limited to, customer base and homogeneity of products and technology. The six segments are based on this organizational structure and information reviewed by Hewlett Packard Enterprise's management to evaluate segment results. A summary description of each segment follows.

*Compute* includes both general purpose servers for multi-workload computing and workload optimized servers to deliver the best performance and value for demanding applications. This portfolio of products includes the HPE ProLiant Compute rack and tower servers and HPE Synergy servers. Compute offerings also include operational and support services and HPE GreenLake for Compute that provides flexible Compute as-a-service ("aaS") IT infrastructure on a consumption basis through the HPE GreenLake edge-to-cloud platform.

*HPC & AI* offers integrated systems comprised of software and hardware designed to address HPC, AI, Data Analytics, and Transaction Processing workloads for government and commercial customers globally. The solutions are segmented into HPC and Data Solutions. The HPC portfolio of products includes HPE Cray Supercomputing, HPE Apollo and Converged Edge Systems (formerly known as Edge Compute) hardware, software, and data management appliances that are often sold as supercomputing systems, including exascale supercomputers. The Data Solutions portfolio includes the mission critical compute portfolio and HPE NonStop. The mission critical compute portfolio includes the HPE Superdome Flex and HPE Integrity product lines for critical applications including large enterprise software applications and data analytics platforms. The HPE Nonstop portfolio includes high-availability, fault-tolerant, software and appliances that power applications such as credit-card transaction processing that require large scale and high availability. HPC & AI offerings also include operational and support services sold with its systems and as standalone services, and also offers most of its solutions aaS on a consumption basis through the HPE GreenLake edge-to-cloud platform.

*Storage* provides primary storage product and service offerings, which include software-powered hyperconverged infrastructure ("HCI") with HPE Nimble Storage Disaggregated HCI and HPE SimpliVity, cloud-native primary storage with HPE Primera and HPE Alletra Storage, storage aaS with HPE GreenLake for Block Storage, disaster recovery and ransomware recovery with Zerto, backup aaS with HPE Backup and Recovery Service, and big data solutions running on HPE Alletra 4000 Data Storage Servers. Storage also provides solutions for unstructured data and analytics workloads and traditional tape, storage networking, and disk products, such as HPE MSA and HPE XP. Storage also provides data-driven intelligence with HPE InfoSight and HPE CloudPhysics along with operational and support services, software subscription services, and data infrastructure portfolio and solutions delivered aaS on a consumption basis through the HPE GreenLake edge-to-cloud platform.

*Intelligent Edge* offers wired and wireless local area network ("LAN"), campus and data center switching, software-defined wide-area-network, network security, and associated services to enable secure connectivity for businesses of any size. The HPE Aruba Networking product portfolio includes hardware products such as Wi-Fi access points, switches and gateways. The HPE Aruba Networking software and services portfolio includes cloud-based management, network management, network access control, analytics and assurance, location services software, and professional and support services, as well as aaS and consumption models through the HPE GreenLake edge-to-cloud platform for the Intelligent Edge portfolio of products. Intelligence Edge offerings are consolidated in the Edge Service Platform which takes a cloud-native approach that provides customers a unified framework to meet their connectivity, security, and financial needs across campus, branch, data center, and remote worker environments.

*Financial Services* provides flexible investment solutions, such as leasing, financing, IT consumption, utility programs, and asset management services, for customers that facilitate unique technology deployment models and the acquisition of complete IT solutions, including hardware, software, and services from Hewlett Packard Enterprise and others. FS also supports financial solutions for on-premise flexible consumption models, such as the HPE GreenLake edge-to-cloud platform.

*Corporate Investments and Other* includes the Advisory and Professional Services ("A & PS") business which primarily offers consultative-led services, HPE and partner technology expertise and advice, implementation services as well as complex solution engagement capabilities; the Communications and Media Solutions business ("CMS"), which primarily offers software and related services to the telecommunications industry; the HPE Software business which offers the HPE Ezmeral Software

------

<u>[Table of Content](#i2c4659f3642b465bbf905d9dd6ad5f9d_7)</u>

**HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES**

**Notes to Condensed Consolidated Financial Statements (Continued)**

**(Unaudited)**

Container Platform and HPE Ezmeral Software Data Fabric; and Hewlett Packard Labs which is responsible for research and development.

*Segment Policy*

Hewlett Packard Enterprise does not allocate to its segments certain operating expenses, which it manages at the corporate level. These unallocated operating costs include certain corporate costs and eliminations, stock-based compensation expense, amortization of initial direct costs, amortization of intangible assets, transformation costs, disaster charges (recovery), and acquisition, disposition and other related charges.

*Segment Operating Results*

Segment net revenue and operating results were as follows:

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| | **Compute** | **HPC & AI** | **Storage** | **Intelligent Edge** | **Financial<br>Services** | **Corporate<br>Investments and Other** | **Total** |
| | **In millions** | **In millions** | **In millions** | **In millions** | **In millions** | **In millions** | **In millions** |
| Three months ended January 31, 2023 |  |  |  |  |  |  |  |
| Net revenue | $3367 | $993 | $1168 | $1121 | $867 | $293 | $7809 |
| Intersegment net revenue | 89 | 63 | 19 | 6 | 6 |  | 183 |
| &nbsp;&nbsp;&nbsp;Total segment net revenue | $3456 | $1056 | $1187 | $1127 | $873 | $293 | $7992 |
| &nbsp;&nbsp;&nbsp;Segment earnings (loss) from operations | $609 | $1 | $142 | $247 | $82 | $(55) | $1026 |
| Three months ended January 31, 2022 |  |  |  |  |  |  |  |
| Net revenue | $3004 | $776 | $1116 | $900 | $840 | $325 | $6961 |
| Intersegment net revenue | 40 | 14 | 12 | 1 | 2 |  | 69 |
| &nbsp;&nbsp;&nbsp;Total segment net revenue | $3044 | $790 | $1128 | $901 | $842 | $325 | $7030 |
| &nbsp;&nbsp;&nbsp;Segment earnings (loss) from operations | $427 | $(7) | $157 | $157 | $104 | $(11) | $827 |

---

------

<u>[Table of Content](#i2c4659f3642b465bbf905d9dd6ad5f9d_7)</u>

**HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES**

**Notes to Condensed Consolidated Financial Statements (Continued)**

**(Unaudited)**

&nbsp;&nbsp;&nbsp;&nbsp;The reconciliation of segment operating results to Condensed Consolidated Statements of Earnings was as follows:

---

| | | |
|:---|:---|:---|
| | **For the three months ended January 31,** | **For the three months ended January 31,** |
| | **2023** | **2022** |
| | **In millions** | **In millions** |
| Net revenue: |  |  |
| Total segments | $7992 | $7030 |
| Eliminations of intersegment net revenue | (183) | (69) |
| &nbsp;&nbsp;&nbsp;Total consolidated net revenue | $7809 | $6961 |
| Earnings before taxes: |  |  |
| Total segment earnings from operations | $1026 | $827 |
| Unallocated corporate costs and eliminations | (108) | (59) |
| Stock-based compensation expense | (140) | (128) |
| Amortization of initial direct costs |  | (1) |
| Amortization of intangible assets | (73) | (73) |
| Transformation costs | (102) | (111) |
| Disaster (charges) recovery | (1) | 1 |
| Acquisition, disposition and other related charges | (11) | (8) |
| Interest and other, net | (25) | (5) |
| Tax indemnification and related adjustments | (1) | (17) |
| Non-service net periodic benefit credit |  | 36 |
| Earnings from equity interests | 58 | 31 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total earnings before provision for taxes | $623 | $493 |

---

*Segment Assets*

Hewlett Packard Enterprise allocates assets to its business segments based on the segments primarily benefiting from the assets. Total assets by segment and the reconciliation of segment assets to total assets as per Condensed Consolidated Balance Sheets were as follows:

---

| | | |
|:---|:---|:---|
| | **As of** | **As of** |
| | **January 31, 2023** | **October 31, 2022** |
| | **In millions** | **In millions** |
| Compute | $15616 | $16881 |
| HPC & AI | 5718 | 5997 |
| Storage | 7093 | 7484 |
| Intelligent Edge | 4403 | 4594 |
| Financial Services | 14937 | 14837 |
| Corporate Investments and Other | 874 | 1110 |
| Corporate and unallocated assets | 6950 | 6220 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total assets | $55591 | $57123 |

---

------

<u>[Table of Content](#i2c4659f3642b465bbf905d9dd6ad5f9d_7)</u>

**HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES**

**Notes to Condensed Consolidated Financial Statements (Continued)**

**(Unaudited)**

*Geographic Information*

Net revenue by geographic region was as follows:

---

| | | |
|:---|:---|:---|
| | **For the three months ended January 31,** | **For the three months ended January 31,** |
| | **2023** | **2022** |
| | **In millions** | **In millions** |
| Americas: |  |  |
| &nbsp;&nbsp;&nbsp;United States | $2885 | $2318 |
| &nbsp;&nbsp;&nbsp;Americas excluding U.S. | 569 | 461 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total Americas | 3454 | 2779 |
| Europe, Middle East and Africa | 2680 | 2556 |
| Asia Pacific and Japan | 1675 | 1626 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total consolidated net revenue | $7809 | $6961 |

---

**Note 3: Transformation Programs**

Transformation programs are comprised of the cost optimization and prioritization plan and the HPE Next initiative. During the third quarter of fiscal 2020, the Company launched the cost optimization and prioritization plan, which focuses on realigning the workforce to areas of growth, a new hybrid workforce model called Edge-to-Office, real estate strategies, and simplifying and evolving our product portfolio strategy. The implementation period of the primary elements of the cost optimization and prioritization plan is anticipated to be through fiscal 2023. During the remaining implementation period, the Company expects to incur transformation costs predominantly related to labor restructuring, non-labor restructuring, IT investments, design and execution charges and real estate initiatives.

During the third quarter of fiscal 2017, the Company launched an initiative called HPE Next to put in place a purpose-built company designed to compete and win in the markets where it participates. Through this program, the Company is simplifying the operating model, and streamlining its offerings, business processes and business systems to improve its strategy execution. The implementation period of primary elements of the HPE Next initiative is anticipated to be through fiscal 2023. During the remaining implementation period, the Company expects to incur predominantly IT infrastructure costs for streamlining, upgrading, and simplifying back-end operations, and real estate initiatives. These costs are expected to be offset by gains from real estate sales and sublease income from inactive office space.

*Cost Optimization and Prioritization Plan*

The components of transformation costs relating to the cost optimization and prioritization plan were as follows:

---

| | | |
|:---|:---|:---|
| | **For the three months ended January 31,** | **For the three months ended January 31,** |
| | **2023** | **2022** |
| | **In millions** | **In millions** |
| Program management | $1 | $8 |
| IT costs | 8 | 8 |
| Restructuring charges | 71 | 37 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total | $80 | $53 |

---

------

<u>[Table of Content](#i2c4659f3642b465bbf905d9dd6ad5f9d_7)</u>

**HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES**

**Notes to Condensed Consolidated Financial Statements (Continued)**

**(Unaudited)**

*HPE Next*

The components of transformation costs relating to HPE Next were as follows:

---

| | | |
|:---|:---|:---|
| | **For the three months ended January 31,** | **For the three months ended January 31,** |
| | **2023** | **2022** |
| | **In millions** | **In millions** |
| Program management | $— | $3 |
| IT costs | 21 | 47 |
| Restructuring charges | 1 |  |
| Gain on real estate sales |  | (8) |
| Impairment of real estate assets |  | 11 |
| Other |  | 5 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total | $22 | $58 |

---

*Restructuring Plan*

Restructuring activities related to the Company's employees and infrastructure under the cost optimization and prioritization plan and HPE Next plan are presented in the table below:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Cost Optimization and Prioritization Plan** | **Cost Optimization and Prioritization Plan** | **HPE Next Plan** | **HPE Next Plan** |
| | **Employee<br>Severance** | **Infrastructure<br>and other** | **Employee<br>Severance** | **Infrastructure<br>and other** |
| | **In millions** | **In millions** | **In millions** | **In millions** |
| Liability as of October 31, 2022 | $185 | $122 | $11 | $25 |
| &nbsp;&nbsp;&nbsp;Charges | 53 | 18 |  | 1 |
| &nbsp;&nbsp;&nbsp;Cash payments | (71) | (18) | (4) | (2) |
| &nbsp;&nbsp;&nbsp;Non-cash items | 12 | 1 | 1 |  |
| Liability as of January 31, 2023 | $179 | $123 | $8 | $24 |
| Total costs incurred to date, as of January 31, 2023 | $698 | $501 | $1261 | $261 |
| Total expected costs to be incurred as of January 31, 2023 | $750 | $550 | $1261 | $265 |

---

The current restructuring liability related to the transformation programs, reported in the Condensed Consolidated Balance Sheets as of January 31, 2023 and October 31, 2022, was $184 million and $191 million, respectively, in Accrued restructuring, and $25 million and $28 million, respectively, in Other accrued liabilities. The non-current restructuring liability related to the transformation programs, reported in Other non-current liabilities in the Condensed Consolidated Balance Sheets as of January 31, 2023 and October 31, 2022, was $125 million and $124 million, respectively.

------

<u>[Table of Content](#i2c4659f3642b465bbf905d9dd6ad5f9d_7)</u>

**HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES**

**Notes to Condensed Consolidated Financial Statements (Continued)**

**(Unaudited)**

**Note 4: Retirement Benefit Plans**

The Company's net pension benefit (credit) cost for defined benefit plans recognized in the Condensed Consolidated Statements of Earnings was as follows:

---

| | | |
|:---|:---|:---|
| | **For the three months ended January 31,** | **For the three months ended January 31,** |
| | **2023** | **2022** |
| | **In millions** | **In millions** |
| Service cost | $13 | $20 |
| Interest cost<sup>(1)</sup> | 93 | 40 |
| Expected return on plan assets<sup>(1)</sup> | (130) | (118) |
| Amortization and deferrals<sup>(1)</sup>: |  |  |
| &nbsp;&nbsp;&nbsp;Actuarial loss | 39 | 44 |
| &nbsp;&nbsp;&nbsp;Prior service benefit | (3) | (3) |
| Net periodic benefit (credit) cost | 12 | (17) |
| Settlement loss and special termination benefits<sup>(1)</sup> |  | 1 |
| &nbsp;&nbsp;&nbsp;Total net benefit (credit) cost | $12 | $(16) |

---

(1)These non-service components of net periodic benefit cost were included in Non-service net periodic benefit credit in the Condensed Consolidated Statements of Earnings.

**Note 5: Taxes on Earnings**

*Provision for Taxes*

For the three months ended January 31, 2023 and 2022, the Company recorded income tax expense of $122 million and income tax benefit of $20 million, respectively, which reflects an effective tax rate of 19.6% and (4.1)%, respectively. The effective tax rate generally differs from the U.S. federal statutory rate of 21% due to favorable tax rates associated with certain earnings from the Company's operations in lower tax jurisdictions throughout the world but are also impacted by discrete tax adjustments during each fiscal period.

For the three months ended January 31, 2023, the Company recorded $11 million of net income tax benefits related to various items discrete to the period. The amount primarily included $22 million of income tax benefits related to transformation costs, acquisition, disposition and other related charges and $13 million of net excess tax benefits related to stock-based compensation, partially offset by $23 million of net income tax charges related to tax audit settlements and changes in uncertain tax positions.

For the three months ended January 31, 2022, the Company recorded $83 million of net income tax benefits related to various items discrete to the period. The amount primarily included $43 million of net income tax benefits related to the settlement of U.S. tax audit matters, $24 million of income tax benefits related to transformation costs and acquisition, disposition and other related charges, and $16 million of net income tax benefits related to the settlement of foreign tax audit matters.

*Uncertain Tax Positions*

As of January 31, 2023 and October 31, 2022, the amount of unrecognized tax benefits was $720 million and $674 million, respectively, of which up to $419 million and $386 million, respectively, would affect the Company's effective tax rate if realized as of their respective periods.

For tax liabilities pertaining to unrecognized tax benefits, the Company recognizes interest income from favorable settlements and interest expense and penalties in (Provision) benefit for taxes in the Condensed Consolidated Statements of Earnings. The Company recognized interest expense of $1 million and interest income of $40 million for the three months ended January 31, 2023 and 2022, respectively. The Company recognized interest income in the first quarter of fiscal 2022 due to the release of reserves as a result of the effective settlement of the IRS audit for fiscal 2016. As of January 31, 2023 and October 31, 2022, the Company had accrued $82 million and $81 million, respectively, for interest and penalties in the Condensed Consolidated Balance Sheets.

------

<u>[Table of Content](#i2c4659f3642b465bbf905d9dd6ad5f9d_7)</u>

**HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES**

**Notes to Condensed Consolidated Financial Statements (Continued)**

**(Unaudited)**

The Company engages in continuous discussion and negotiation with tax authorities regarding tax matters in various jurisdictions. The Internal Revenue Service is conducting an audit of the Company's fiscal 2017, 2018, and 2019 U.S. federal income tax returns. It is reasonably possible that certain federal, foreign, and state tax issues may be concluded in the next 12 months, including issues involving resolution of certain intercompany transactions and other matters. Accordingly, the Company believes it is reasonably possible that its existing unrecognized tax benefits may be reduced by an amount up to $44 million within the next 12 months.

*Deferred Tax Assets and Liabilities*

Deferred tax assets and liabilities included in the Condensed Consolidated Balance Sheets were as follows:

---

| | | |
|:---|:---|:---|
| | **As of** | **As of** |
| | **January 31, 2023** | **October 31, 2022** |
| | **In millions** | **In millions** |
| Deferred tax assets | $2231 | $2127 |
| Deferred tax liabilities | (345) | (320) |
| Deferred tax assets net of deferred tax liabilities | $1886 | $1807 |

---

**Note 6: Balance Sheet Details**

*Cash, cash equivalents and restricted cash*

---

| | | |
|:---|:---|:---|
| | **As of** | **As of** |
| | **January 31, 2023** | **October 31, 2022** |
| | **In millions** | **In millions** |
| Cash and cash equivalents | $2530 | $4163 |
| Restricted cash<sup>(1)</sup> | 314 | 600 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total | $2844 | $4763 |

---

(1)&nbsp;&nbsp;&nbsp;&nbsp;The Company included restricted cash in Other current assets in the accompanying Condensed Consolidated Balance Sheets.

*Inventory*

---

| | | |
|:---|:---|:---|
| | **As of** | **As of** |
| | **January 31, 2023** | **October 31, 2022** |
| | **In millions** | **In millions** |
| Finished goods | $1999 | $2187 |
| Purchased parts and fabricated assemblies | 2645 | 2974 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total | $4644 | $5161 |

---

*Property, Plant and Equipment*

---

| | | |
|:---|:---|:---|
| | **As of** | **As of** |
| | **January 31, 2023** | **October 31, 2022** |
| | **In millions** | **In millions** |
| Land | $74 | $74 |
| Buildings and leasehold improvements | 1524 | 1503 |
| Machinery and equipment, including equipment held for lease | 10075 | 9729 |
| &nbsp;&nbsp;&nbsp;&nbsp;Gross property, plant and equipment | 11673 | 11306 |
| Accumulated depreciation | (5683) | (5522) |
| &nbsp;&nbsp;&nbsp;&nbsp;Net property, plant and equipment | $5990 | $5784 |

---

------

<u>[Table of Content](#i2c4659f3642b465bbf905d9dd6ad5f9d_7)</u>

**HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES**

**Notes to Condensed Consolidated Financial Statements (Continued)**

**(Unaudited)**

*Warranties*

The Company's aggregate product warranty liability and changes thereto were as follows:

---

| | |
|:---|:---|
| | **For the three months ended January 31, 2023** |
| | **In millions** |
| Balance at beginning of period | $360 |
| Charges | 47 |
| Adjustments related to pre-existing warranties | (2) |
| Settlements made | (50) |
| Balance at end of period | $355 |

---

*Contract balances*

The Company's contract balances consist of contract assets, contract liabilities, and costs to obtain a contract with a customer.

*Contract Assets*

A summary of accounts receivable, net, including unbilled receivables was as follows:

---

| | | |
|:---|:---|:---|
| | **As of** | **As of** |
| | **January 31, 2023** | **October 31, 2022** |
| | **In millions** | **In millions** |
| Unbilled receivables | $286 | $245 |
| Accounts receivable | 3942 | 3881 |
| Allowances | (27) | (25) |
| &nbsp;&nbsp;&nbsp;&nbsp;Total | $4201 | $4101 |

---

The allowances for credit losses related to accounts receivable and changes during the three months ended January 31, 2023 and the year ended October 31, 2022 were as follows:

---

| | | |
|:---|:---|:---|
| | **As of** | **As of** |
| | **January 31, 2023** | **October 31, 2022** |
| | **In millions** | **In millions** |
| Balance at beginning of period | $25 | $23 |
| Provision for credit losses | 5 | 25 |
| Adjustments to existing allowances, including write offs | (3) | (23) |
| Balance at end of period | $27 | $25 |

---

*Sale of Trade Receivables*

The Company has third-party revolving short-term financing arrangements intended to facilitate the working capital requirements of certain customers. During the three months ended January 31, 2023 and the fiscal year ended October 31, 2022, the Company sold $1.1 billion and $4.1 billion of trade receivables, respectively. The Company recorded an obligation of $95 million and $88 million within Notes payable and short-term borrowings in its Condensed Consolidated Balance Sheets as of January 31, 2023 and October 31, 2022 respectively, related to the trade receivables sold and collected from the third-party for which the revenue recognition was deferred.

*Contract Liabilities and Remaining Performance Obligations*

As of January 31, 2023 and October 31, 2022, current deferred revenue of $3.5 billion and $3.4 billion, respectively, were recorded in Deferred revenue, and non-current deferred revenue of $3.1 billion and $3.0 billion, respectively, were recorded in Other non-current liabilities in the Condensed Consolidated Balance Sheets. During the three months ended January 31, 2023, approximately $1.2 billion of revenue was recognized relating to contract liabilities recorded as of October 31, 2022.

------

<u>[Table of Content](#i2c4659f3642b465bbf905d9dd6ad5f9d_7)</u>

**HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES**

**Notes to Condensed Consolidated Financial Statements (Continued)**

**(Unaudited)**

Revenue allocated to remaining performance obligations represents contract work that has not yet been performed and does not include contracts where the customer is not committed. Remaining performance obligations estimates are subject to change and are affected by several factors, including contract terminations, changes in the scope of contracts, adjustments for revenue that has not materialized and adjustments for currency. As of January 31, 2023, the aggregate amount of remaining performance obligations, or deferred revenue, was $6.6 billion. The Company expects to recognize approximately 48% of this balance over fiscal 2023 with the remainder to be recognized thereafter.

*Costs to Obtain a Contract*

As of January 31, 2023, the current and non-current portions of the capitalized costs to obtain a contract were $77 million and $126 million, respectively. As of October 31, 2022, the current and non-current portions of the capitalized costs to obtain a contract were $76 million and $124 million, respectively. The current and non-current portions of the capitalized costs to obtain a contract were included in Other current assets, and Long-term financing receivables and other assets, respectively, in the Condensed Consolidated Balance Sheet. For the three months ended January 31, 2023 and 2022 the Company amortized $22 million and $20 million respectively, of capitalized costs to obtain a contract. The amortized capitalized costs to obtain a contract are included in Selling, general and administrative expense in the Condensed Consolidated Statement of Earnings.

**Note 7: Accounting for Leases as a Lessor** 

Financing receivables represent sales-type and direct-financing leases of the Company and third-party products. These receivables typically have terms ranging from two to five years and are usually collateralized by a security interest in the underlying assets. Financing receivables also include billed receivables from operating leases. The allowance for credit losses represents future expected credit losses over the life of the receivables based on past experience, current information and forward-looking economic considerations. The components of financing receivables were as follows:

---

| | | |
|:---|:---|:---|
| | **As of** | **As of** |
| | **January 31, 2023** | **October 31, 2022** |
| | **In millions** | **In millions** |
| Minimum lease payments receivable | $9256 | $8686 |
| Unguaranteed residual value | 407 | 380 |
| Unearned income | (804) | (707) |
| Financing receivables, gross | 8859 | 8359 |
| Allowance for credit losses  | (333) | (325) |
| Financing receivables, net | 8526 | 8034 |
| Less: current portion | (3726) | (3522) |
| Amounts due after one year, net | $4800 | $4512 |

---

*Sale of Financing Receivables*

The Company enters into arrangements to transfer the contractual payments due under certain financing receivables to third party financial institutions. During the three months ended January 31, 2023 and the fiscal year ended October 31, 2022, the Company sold $39 million and $183 million of financing receivables, respectively.

*Credit Quality Indicators*

Due to the homogeneous nature of its leasing transactions, the Company manages its financing receivables on an aggregate basis when assessing and monitoring credit risk. Credit risk is generally diversified due to the large number of entities comprising the Company's customer base and their dispersion across many different industries and geographic regions. The Company evaluates the credit quality of an obligor at lease inception and monitors that credit quality over the term of a transaction. The Company assigns risk ratings to each lease based on the creditworthiness of the obligor and other variables that augment or mitigate the inherent credit risk of a particular transaction and periodically updates the risk ratings when there is a change in the underlying credit quality. Such variables include the underlying value and liquidity of the collateral, the essential use of the equipment, the term of the lease, and the inclusion of credit enhancements, such as guarantees, letters of credit or security deposits.

------

<u>[Table of Content](#i2c4659f3642b465bbf905d9dd6ad5f9d_7)</u>

**HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES**

**Notes to Condensed Consolidated Financial Statements (Continued)**

**(Unaudited)**

The credit risk profile of gross financing receivables, based on internal risk ratings as of January 31, 2023, presented on amortized cost basis by year of origination was as follows:

---

| | | | |
|:---|:---|:---|:---|
| | **As of January 31, 2023** | **As of January 31, 2023** | **As of January 31, 2023** |
| | **Risk Rating** | **Risk Rating** | **Risk Rating** |
| | **Low** | **Moderate** | **High** |
| Fiscal Year | **In millions** | **In millions** | **In millions** |
| &nbsp;&nbsp;2023 | $352 | $215 | $5 |
| &nbsp;&nbsp;2022 | 2273 | 1427 | 48 |
| &nbsp;&nbsp;2021 | 1279 | 1004 | 44 |
| &nbsp;&nbsp;&nbsp;2020 | 662 | 515 | 64 |
| &nbsp;&nbsp;&nbsp;2019 and prior | 331 | 485 | 155 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total | $4897 | $3646 | $316 |

---

The credit risk profile of gross financing receivables, based on internal risk ratings as of October 31, 2022, presented on amortized cost basis by year of origination was as follows:

---

| | | | |
|:---|:---|:---|:---|
| | **As of October 31, 2022** | **As of October 31, 2022** | **As of October 31, 2022** |
| | **Risk Rating** | **Risk Rating** | **Risk Rating** |
| | **Low** | **Moderate** | **High** |
| Fiscal Year | **In millions** | **In millions** | **In millions** |
| &nbsp;&nbsp;2022 | $1987 | $1277 | $44 |
| &nbsp;&nbsp;2021 | 1338 | 1071 | 42 |
| &nbsp;&nbsp;&nbsp;2020 | 756 | 571 | 67 |
| &nbsp;&nbsp;&nbsp;2019 | 328 | 336 | 69 |
| &nbsp;&nbsp;&nbsp;2018 and prior | 143 | 234 | 96 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total | $4552 | $3489 | $318 |

---

Accounts rated low risk typically have the equivalent of a Standard & Poor's rating of BBB– or higher, while accounts rated moderate risk generally have the equivalent of BB+ or lower. The Company classifies accounts as high risk when it considers the financing receivable to be impaired or when management believes there is a significant near-term risk of impairment. The credit quality indicators do not reflect any mitigation actions taken to transfer credit risk to third parties.

*Allowance for Credit Losses*

The allowance for credit losses for financing receivables as of January 31, 2023 and October 31, 2022 and the respective changes during the three and twelve months then ended were as follows.

---

| | | |
|:---|:---|:---|
| | **As of** | **As of** |
| | **January 31, 2023** | **October 31, 2022** |
| | **In millions** | **In millions** |
| Balance at beginning of period | $325 | $228 |
| Provision for credit losses<sup>(1)</sup> | 18 | 177 |
| Adjustment to the existing allowance |  | (10) |
| Write-offs | (10) | (70) |
| &nbsp;&nbsp;&nbsp;&nbsp;Balance at end of period | $333 | $325 |

---

(1)&nbsp;&nbsp;&nbsp;&nbsp;Fiscal 2022 included a provision of $99 million related to expected credit losses due to the Company's exit from its Russia and Belarus businesses.

------

<u>[Table of Content](#i2c4659f3642b465bbf905d9dd6ad5f9d_7)</u>

**HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES**

**Notes to Condensed Consolidated Financial Statements (Continued)**

**(Unaudited)**

*Non-Accrual and Past-Due Financing Receivables*

The following table summarizes the aging and non-accrual status of gross financing receivables:

---

| | | |
|:---|:---|:---|
| | **As of** | **As of** |
| | **January 31, 2023** | **October 31, 2022** |
| | **In millions** | **In millions** |
| Billed:<sup>(1)</sup> |  |  |
| &nbsp;&nbsp;&nbsp;Current and past due 1-30 days | $396 | $372 |
| &nbsp;&nbsp;&nbsp;Past due 31-60 days | 45 | 32 |
| &nbsp;&nbsp;&nbsp;Past due 61-90 days | 32 | 19 |
| &nbsp;&nbsp;&nbsp;Past due > 90 days | 148 | 121 |
| Unbilled sales-type and direct-financing lease receivables | 8238 | 7815 |
| &nbsp;&nbsp;&nbsp;Total gross financing receivables | $8859 | $8359 |
| Gross financing receivables on non-accrual status<sup>(2)</sup> | $317 | $290 |
| Gross financing receivables 90 days past due and still accruing interest<sup>(2)</sup> | $76 | $72 |

---

(1)Includes billed operating lease receivables and billed sales-type and direct-financing lease receivables.

(2)Includes billed operating lease receivables and billed and unbilled sales-type and direct-financing lease receivables.

The following table presents amounts included in the Condensed Consolidated Statement of Earnings related to lessor activity:

---

| | | |
|:---|:---|:---|
| | **For the three months ended January 31,** | **For the three months ended January 31,** |
| | **2023** | **2022** |
| | **In millions** | **In millions** |
| Interest income from sales-type leases and direct financing leases | $123 | $122 |
| Lease income from operating leases | 589 | 572 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total lease income | $712 | $694 |

---

*Variable Interest Entities*

The Company has issued asset-backed debt securities under a fixed-term securitization program to private investors. The asset-backed debt securities are collateralized by the U.S. fixed-term financing receivables and leased equipment in the offering, which is held by a Special Purpose Entity ("SPE"). The SPE meets the definition of a Variable Interest Entity ("VIE") and is consolidated, along with the associated debt, into the Condensed Consolidated Financial Statements as the Company is the primary beneficiary of the VIE. The SPE is a bankruptcy-remote legal entity with separate assets and liabilities. The purpose of the SPE is to facilitate the funding of customer receivables and leased equipment in the capital markets.

The Company's risk of loss related to securitized receivables and leased equipment is limited to the amount by which the Company's right to receive collections for assets securitized exceeds the amount required to pay interest, principal, and fees and expenses related to the asset-backed securities.

------

<u>[Table of Content](#i2c4659f3642b465bbf905d9dd6ad5f9d_7)</u>

**HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES**

**Notes to Condensed Consolidated Financial Statements (Continued)**

**(Unaudited)**

The following table presents the assets and liabilities held by the consolidated VIE as of January 31, 2023 and October 31, 2022, which are included in the Condensed Consolidated Balance Sheets. The assets in the table below include those that can be used to settle the obligations of the VIE. Additionally, general creditors do not have recourse to the assets of the VIE.

---

| | | |
|:---|:---|:---|
| | **As of** | **As of** |
| | **January 31, 2023** | **October 31, 2022** |
| Assets held by VIE: | **In millions** | **In millions** |
| Other current assets | $178 | $203 |
| Financing receivables |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Short-term | 766 | 838 |
| &nbsp;&nbsp;&nbsp;&nbsp;Long-term | 931 | 1085 |
| Property, plant and equipment | 1122 | 1323 |
| Liabilities held by VIE: |  |  |
| Notes payable and short-term borrowings, net of unamortized debt issuance costs | 1335 | 1510 |
| Long-term debt, net of unamortized debt issuance costs | $1128 | $1415 |

---

For the three months ended January 31, 2023, no financing receivables and leased equipment were transferred via securitization through the SPE. For the fiscal year ended October 31, 2022, financing receivables and leased equipment transferred via securitization through the SPE were $1.6 billion and $1.2 billion, respectively.

**Note 8: Goodwill** 

Goodwill is tested for impairment at the reporting unit level. As of January 31, 2023, the Company's reporting units are consistent with the reportable segments identified in Note 2, with the exception of Corporate Investments and Other, which contains three reporting units: A & PS, CMS, and Software. The following table represents the carrying value of goodwill, by reportable segment as of January 31, 2023 and October 31, 2022. There has been no change to the accumulated impairment loss from the Company's Annual Report on Form 10-K for the fiscal year ended October 31, 2022.

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| | **Compute** | **HPC & AI** | **Storage** | **Intelligent Edge** | **Financial Services** | **Corporate Investments and Other** | **Total** |
| | **In millions** | **In millions** | **In millions** | **In millions** | **In millions** | **In millions** | **In millions** |
| Balance at October 31, 2022<sup>(1)</sup> | $7692 | $2889 | $4000 | $2555 | $144 | $123 | $17403 |
| Goodwill acquired during the period |  | 18 |  |  |  |  | 18 |
| Balance at January 31, 2023 | $7692 | $2907 | $4000 | $2555 | $144 | $123 | $17421 |

---

(1)&nbsp;&nbsp;&nbsp;&nbsp;As a result of the organizational realignments which were effective as of November 1, 2022, (described in Note 1, "Overview and Summary of Significant Accounting Policies"), $160 million of goodwill was reallocated from the Storage segment to the Compute segment as of the beginning of the period using a relative fair value approach.

The Company evaluates the recoverability of goodwill on an annual basis as of the beginning of its fourth fiscal quarter and whenever events or changes in circumstances indicate there may be a potential impairment.

As of the annual test date in fiscal 2022, the HPC & AI reporting unit had goodwill of $2.9 billion and an excess of fair value over carrying value of net assets of 0%. The HPC & AI reporting unit relies significantly on the income approach which estimates the fair value based on the present value of future cash flows. The HPC & AI business is facing challenges primarily related to supply chain constraints and other operational challenges impacting the Company's ability to achieve certain customer acceptance milestones required for revenue recognition and resulting cost increases associated with fulfilling contracts over longer than originally anticipated timelines. The Company currently believes these challenges will be successfully addressed as the supply chain constraints are improving. If the global macroeconomic or geopolitical conditions worsen, projected revenue growth rates or operating margins decline, weighted average cost of capital increases, or if the Company has significant or sustained decline in its stock price, it is possible its estimates about the HPC & AI reporting unit's ability to

------

<u>[Table of Content](#i2c4659f3642b465bbf905d9dd6ad5f9d_7)</u>

**HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES**

**Notes to Condensed Consolidated Financial Statements (Continued)**

**(Unaudited)**

successfully address the current challenges may change, which could result in the carrying value of the HPC & AI reporting unit exceeding its estimated fair value and potential impairment charges.

As of the annual test date in fiscal 2022, the Software reporting unit had goodwill of $123 million and an excess of fair value over carrying value of net assets of 0%. The Software reporting unit relies significantly on the market approach, which is impacted by market volatility. If global macroeconomic or geopolitical conditions worsen and cause a further decline in the equity market or if revenue expectations are not met, this could result in the carrying value of the Software reporting unit exceeding its estimated fair value and potential impairment charges.

**Note 9: Fair Value**

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date.

The Company uses valuation techniques that are based upon observable and unobservable inputs. Observable inputs are developed using market data such as publicly available information and reflect the assumptions market participants would use, while unobservable inputs are developed using the best information available about the assumptions market participants would use.

The following table presents the Company's assets and liabilities that are measured at fair value on a recurring basis:

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **As of January 31, 2023** | **As of January 31, 2023** | **As of January 31, 2023** | **As of January 31, 2023** | **As of October 31, 2022** | **As of October 31, 2022** | **As of October 31, 2022** | **As of October 31, 2022** |
| | **Fair Value<br>Measured Using** | **Fair Value<br>Measured Using** | **Fair Value<br>Measured Using** | | **Fair Value<br>Measured Using** | **Fair Value<br>Measured Using** | **Fair Value<br>Measured Using** | |
| | **Quoted Prices in Active Markets for Identical Assets**<br>**(Level 1)** | **Significant Other Observable Remaining Inputs (Level 2)** | **Significant Other Unobservable Remaining Inputs** <br>**(Level 3)** |<br>**Total** | **Quoted Prices in Active Markets for Identical Assets**<br>**(Level 1)** | **Significant Other Observable Remaining Inputs (Level 2)** | **Significant Other Unobservable Remaining Inputs** <br>**(Level 3)** |<br>**Total** |
| | **In millions** | **In millions** | **In millions** | **In millions** | **In millions** | **In millions** | **In millions** | **In millions** |
| Assets |  |  |  |  |  |  |  |  |
| Cash Equivalents and Investments: | Cash Equivalents and Investments: | Cash Equivalents and Investments: | Cash Equivalents and Investments: | Cash Equivalents and Investments: | Cash Equivalents and Investments: | Cash Equivalents and Investments: | Cash Equivalents and Investments: | Cash Equivalents and Investments: |
| &nbsp;&nbsp;&nbsp;Time deposits | $— | $631 | $— | $631 | $— | $1516 | $— | $1516 |
| &nbsp;&nbsp;&nbsp;Money market funds | 501 |  |  | 501 | 744 |  |  | 744 |
| &nbsp;&nbsp;&nbsp;Equity securities |  |  | 126 | 126 |  |  | 126 | 126 |
| &nbsp;&nbsp;&nbsp;Foreign bonds |  | 104 |  | 104 |  | 91 |  | 91 |
| &nbsp;&nbsp;&nbsp;Other debt securities |  |  | 33 | 33 |  |  | 33 | 33 |
| Derivative Instruments: |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Foreign exchange contracts |  | 276 |  | 276 |  | 840 |  | 840 |
| &nbsp;&nbsp;&nbsp;Other derivatives |  | 6 |  | 6 |  | 2 |  | 2 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total assets | $501 | $1017 | $159 | $1677 | $744 | $2449 | $159 | $3352 |
| Liabilities |  |  |  |  |  |  |  |  |
| Derivative Instruments: |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Interest rate contracts | $— | $137 | $— | $137 | $— | $178 | $— | $178 |
| Foreign exchange contracts |  | 329 |  | 329 |  | 128 |  | 128 |
| &nbsp;&nbsp;&nbsp;Other derivatives |  |  |  |  |  | 1 |  | 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities | $— | $466 | $— | $466 | $— | $307 | $— | $307 |

---

------

<u>[Table of Content](#i2c4659f3642b465bbf905d9dd6ad5f9d_7)</u>

**HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES**

**Notes to Condensed Consolidated Financial Statements (Continued)**

**(Unaudited)**

*Other Fair Value Disclosures*

Short-Term and Long-Term Debt: As of January 31, 2023 and October 31, 2022, the estimated fair value of the Company's short-term and long-term debt was $13.0 billion and $12.2 billion, respectively. As of January 31, 2023 and October 31, 2022, the carrying value of the Company's short-term and long-term debt was $12.9 billion and $12.5 billion, respectively. If measured at fair value in the Condensed Consolidated Balance Sheets, short-term and long-term debt would be classified in Level 2 of the fair value hierarchy.

Equity investments without readily determinable fair value: Equity investments are recorded at cost and measured at fair value when they are deemed to be impaired or when there is an adjustment from observable price changes. For the three months ended January 31, 2023, the Company recognized an impairment of $10 million on these investments. The Company did not recognize any impairments on these equity investments during the three months ended January 31, 2022. If measured at fair value in the Condensed Consolidated Balance Sheets, these would generally be classified in Level 3 of the fair value hierarchy.

Other financial instruments, including accounts receivable and accounts payable, are carried at cost, which approximates their fair value due to their short-term nature.

Non-Financial Assets: The Company's non-financial assets, such as intangible assets, goodwill, and property, plant and equipment, are recorded at cost. The Company records right-of-use assets based on the lease liability, adjusted for lease prepayments, lease incentives received, and the lessee's initial direct costs. Fair value adjustments are made to these non-financial assets in the period an impairment charge is recognized.

------

<u>[Table of Content](#i2c4659f3642b465bbf905d9dd6ad5f9d_7)</u>

**HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES**

**Notes to Condensed Consolidated Financial Statements (Continued)**

**(Unaudited)**

**Note 10: Financial Instruments**

*Cash Equivalents and Available-for-Sale Debt Investments*

Cash equivalents and available-for-sale debt investments were as follows:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **As of January 31, 2023** | **As of January 31, 2023** | **As of January 31, 2023** | **As of October 31, 2022** | **As of October 31, 2022** | **As of October 31, 2022** |
| | **Cost** | **Gross Unrealized Gains** | **Fair<br>Value** | **Cost** | **Gross Unrealized Gains (Losses)** | **Fair<br>Value** |
| | **In millions** | **In millions** | **In millions** | **In millions** | **In millions** | **In millions** |
| Cash Equivalents: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Time deposits | $631 | $— | $631 | $1516 | $— | $1516 |
| &nbsp;&nbsp;&nbsp;Money market funds | 501 |  | 501 | 744 |  | 744 |
| Total cash equivalents | 1132 |  | 1132 | 2260 |  | 2260 |
| Available-for-Sale Debt Investments: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Foreign bonds | 102 | 2 | 104 | 93 | (2) | 91 |
| &nbsp;&nbsp;&nbsp;Other debt securities | 31 | 2 | 33 | 32 | 1 | 33 |
| Total available-for-sale debt investments | 133 | 4 | 137 | 125 | (1) | 124 |
| Total cash equivalents and available-for-sale debt investments | $1265 | $4 | $1269 | $2385 | $(1) | $2384 |

---

As of January 31, 2023 and October 31, 2022, the carrying amount of cash equivalents approximated fair value due to the short period of time to maturity. Time deposits were primarily issued by institutions outside of the U.S. as of January 31, 2023 and October 31, 2022. The estimated fair value of the available-for-sale debt investments may not be representative of values that will be realized in the future.

Contractual maturities of available-for-sale debt investments were as follows:

---

| | | |
|:---|:---|:---|
| | **As of January 31, 2023** | **As of January 31, 2023** |
| | **Amortized Cost** | **Fair Value** |
| | **In millions** | **In millions** |
| Due in one year | $19 | $19 |
| Due in more than five years | 114 | 118 |
| Total | $133 | $137 |

---

Non-marketable equity investments in privately held companies are included in Long-term financing receivables and other assets in the Condensed Consolidated Balance Sheets. These non-marketable equity investments are carried either at fair value or under the measurement alternative.

The carrying amount of those non-marketable equity investments accounted for under the measurement alternative was $160 million and $175 million as of January 31, 2023 and October 31, 2022, respectively. For the three months ended January 31, 2023, the Company recognized an impairment of $10 million on these investments. The Company did not recognize any impairments on these equity investments during the three months ended January 31, 2022.

The carrying amount of those non-marketable equity investments accounted for under the fair value option was $126 million as of January 31, 2023 and October 31, 2022. During the three months ended January 31, 2022, the Company recorded an unrealized gain of $59 million on these investments.

Investments in equity securities that are accounted for using the equity method are included in Investments in equity interests in the Condensed Consolidated Balance Sheets. The carrying amount of these investments was $2.2 billion as of January 31, 2023 and October 31, 2022. For the three months ended January 31, 2023 and 2022, the Company recorded earnings from equity interests of $58 million and $31 million, respectively, on these investments.

------

<u>[Table of Content](#i2c4659f3642b465bbf905d9dd6ad5f9d_7)</u>

**HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES**

**Notes to Condensed Consolidated Financial Statements (Continued)**

**(Unaudited)**

*Fair Value of Derivative Instruments in the Condensed Consolidated Balance Sheets*

The gross notional and fair value of derivative instruments in the Condensed Consolidated Balance Sheets were as follows:

---

| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **As of January 31, 2023** | **As of January 31, 2023** | **As of January 31, 2023** | **As of January 31, 2023** | **As of January 31, 2023** | **As of October 31, 2022** | **As of October 31, 2022** | **As of October 31, 2022** | **As of October 31, 2022** | **As of October 31, 2022** |
| | | **Fair Value** | **Fair Value** | **Fair Value** | **Fair Value** | | **Fair Value** | **Fair Value** | **Fair Value** | **Fair Value** |
| |<br>**Outstanding<br>Gross<br>Notional** | **Other<br>Current<br>Assets** | **Long-Term<br>Financing<br>Receivables<br>and Other<br>Assets** | **Other<br>Accrued<br>Liabilities** | **Long-Term<br>Other<br>Liabilities** |<br>**Outstanding<br>Gross<br>Notional** | **Other<br>Current<br>Assets** | **Long-Term<br>Financing<br>Receivables<br>and Other<br>Assets** | **Other<br>Accrued<br>Liabilities** | **Long-Term<br>Other<br>Liabilities** |
| | **In millions** | **In millions** | **In millions** | **In millions** | **In millions** | **In millions** | **In millions** | **In millions** | **In millions** | **In millions** |
| Derivatives designated as hedging instruments |  |  |  |  |  |  |  |  |  |  |
| Fair value hedges: |  |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Interest rate contracts | $2500 | $— | $— | $— | $137 | $2500 | $— | $— | $— | $178 |
| Cash flow hedges: |  |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Foreign currency contracts | 7798 | 119 | 96 | 168 | 47 | 7662 | 420 | 246 | 25 | 13 |
| Net investment hedges: |  |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Foreign currency contracts | 1896 | 23 | 25 | 35 | 24 | 1883 | 60 | 74 | 12 | 13 |
| Total derivatives designated as hedging instruments | 12194 | 142 | 121 | 203 | 208 | 12045 | 480 | 320 | 37 | 204 |
| Derivatives not designated as hedging instruments |  |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Foreign currency contracts | 5216 | 10 | 3 | 43 | 12 | 7780 | 36 | 4 | 53 | 12 |
| &nbsp;&nbsp;&nbsp;Other derivatives | 110 | 6 |  |  |  | 95 | 2 |  | 1 |  |
| Total derivatives not designated as hedging instruments | 5326 | 16 | 3 | 43 | 12 | 7875 | 38 | 4 | 54 | 12 |
| Total derivatives | $17520 | $158 | $124 | $246 | $220 | $19920 | $518 | $324 | $91 | $216 |

---

*Offsetting of Derivative Instruments*

The Company recognizes all derivative instruments on a gross basis in the Condensed Consolidated Balance Sheets. The Company's derivative instruments are subject to master netting arrangements and collateral security arrangements. The Company does not offset the fair value of its derivative instruments against the fair value of cash collateral posted under collateral security agreements. The information related to the potential effect of the Company's use of the master netting agreements and collateral security agreements were as follows:

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| | **As of January 31, 2023** | **As of January 31, 2023** | **As of January 31, 2023** | **As of January 31, 2023** | **As of January 31, 2023** | **As of January 31, 2023** | **As of January 31, 2023** |
| | **In the Condensed Consolidated Balance Sheets** | **In the Condensed Consolidated Balance Sheets** | **In the Condensed Consolidated Balance Sheets** | **In the Condensed Consolidated Balance Sheets** | **In the Condensed Consolidated Balance Sheets** | | |
| | | | | **(iv)** | **(v)** | | |
| | | | | **Gross Amounts Not Offset** | **Gross Amounts Not Offset** | | |
| | **(i)**<br>**Gross<br>Amount<br>Recognized** | **(ii)**<br>**Gross<br>Amount<br>Offset** | **(iii) = (i)–(ii)**<br>**Net Amount<br>Presented** | **Derivatives** | **Financial<br>Collateral** | |<br>**(vi) = (iii)–(iv)–(v)**<br>**Net Amount** |
| | **In millions** | **In millions** | **In millions** | **In millions** | **In millions** | **In millions** | **In millions** |
| Derivative assets | $282 | $— | $282 | $128 | $140 | <sup>(1)</sup> | $14 |
| Derivative liabilities | $466 | $— | $466 | $128 | $319 | <sup>(2)</sup> | $19 |

---

------

<u>[Table of Content](#i2c4659f3642b465bbf905d9dd6ad5f9d_7)</u>

**HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES**

**Notes to Condensed Consolidated Financial Statements (Continued)**

**(Unaudited)**

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| | **As of October 31, 2022** | **As of October 31, 2022** | **As of October 31, 2022** | **As of October 31, 2022** | **As of October 31, 2022** | **As of October 31, 2022** | **As of October 31, 2022** |
| | **In the Condensed Consolidated Balance Sheets** | **In the Condensed Consolidated Balance Sheets** | **In the Condensed Consolidated Balance Sheets** | **In the Condensed Consolidated Balance Sheets** | **In the Condensed Consolidated Balance Sheets** | | |
| | | | | **(iv)** | **(v)** | | |
| | | | | **Gross Amounts Not Offset** | **Gross Amounts Not Offset** | | |
| | **(i)**<br>**Gross<br>Amount<br>Recognized** | **(ii)**<br>**Gross<br>Amount<br>Offset** | **(iii) = (i)–(ii)**<br>**Net Amount<br>Presented** | **Derivatives** | **Financial<br>Collateral** | |<br>**(vi) = (iii)–(iv)–(v)**<br>**Net Amount** |
| | **In millions** | **In millions** | **In millions** | **In millions** | **In millions** | **In millions** | **In millions** |
| Derivative assets | $842 | $— | $842 | $199 | $508 | <sup>(1)</sup> | $135 |
| Derivative liabilities | $307 | $— | $307 | $199 | $113 | <sup>(2)</sup> | $(5) |

---

(1)Represents the cash collateral posted by counterparties as of the respective reporting date for the Company's asset position, net of derivative amounts that could be offset, as of, generally, two business days prior to the respective reporting date.

(2)Represents the collateral posted by the Company in cash or through the re-use of counterparty cash collateral as of the respective reporting date for the Company's liability position, net of derivative amounts that could be offset, as of, generally, two business days prior to the respective reporting date. As of January 31, 2023, of the $319 million of collateral posted, $313 million was in cash and $6 million was through the re-use of counterparty collateral. As of October 31, 2022, the entire amount of the collateral posted of $113 million was through the re-use of counterparty collateral.

The amounts recorded on the Condensed Consolidated Balance Sheets related to cumulative basis adjustments for fair value hedges were as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Carrying amount of the hedged liabilities** | **Carrying amount of the hedged liabilities** | **Cumulative amount of fair value hedging adjustment included in the carrying amount of the hedged assets/ (liabilities)** | **Cumulative amount of fair value hedging adjustment included in the carrying amount of the hedged assets/ (liabilities)** |
| | **As of** | **As of** | **As of** | **As of** |
| | **January 31, 2023** | **October 31, 2022** | **January 31, 2023** | **October 31, 2022** |
| | **In millions** | **In millions** | **In millions** | **In millions** |
| Long-term debt | $(2358) | $(2317) | $137 | $178 |

---

The pre-tax effect of derivative instruments in cash flow and net investment hedging relationships recognized in Other Comprehensive Income ("OCI") were as follows:

---

| | | |
|:---|:---|:---|
| | **Gains (Losses) Recognized in OCI on Derivatives** | **Gains (Losses) Recognized in OCI on Derivatives** |
| | **For the three months ended January 31,** | **For the three months ended January 31,** |
| | **2023** | **2022** |
| | **In millions** | **In millions** |
| Derivatives in Cash Flow Hedging relationship |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Foreign exchange contracts | $(518) | $215 |
| Derivatives in Net Investment Hedging relationship |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Foreign exchange contracts | (107) | 11 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | $(625) | $226 |

---

As of January 31, 2023, the Company expects to reclassify an estimated net accumulated other comprehensive loss of approximately $104 million, net of taxes, to earnings in the next twelve months along with the earnings effects of the related forecasted transactions associated with cash flow hedges.

------

<u>[Table of Content](#i2c4659f3642b465bbf905d9dd6ad5f9d_7)</u>

**HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES**

**Notes to Condensed Consolidated Financial Statements (Continued)**

**(Unaudited)**

*Effect of Derivative Instruments on the Condensed Consolidated Statements of Earnings*

The pre-tax effect of derivative instruments on the Condensed Consolidated Statements of Earnings were as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Gains (Losses) Recognized in Income** | **Gains (Losses) Recognized in Income** | **Gains (Losses) Recognized in Income** | **Gains (Losses) Recognized in Income** |
| | **For the three months ended January 31,** | **For the three months ended January 31,** | **For the three months ended January 31,** | **For the three months ended January 31,** |
| | **2023** | **2023** | **2022** | **2022** |
| | **Net revenue** | **Interest and other, net** | **Net revenue** | **Interest and other, net** |
| | **In millions** | **In millions** | **In millions** | **In millions** |
| Total amounts of income and expense line items presented in the Condensed Consolidated Statements of Earnings in which the effects of fair value hedges, cash flow hedges and derivatives not designated as hedging instruments are recorded | $7809 | $(25) | $6961 | $(5) |
| Gains (losses) on derivatives in fair value hedging relationships |  |  |  |  |
| &nbsp;&nbsp;Interest rate contracts |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Hedged items |  | (41) |  | 54 |
| &nbsp;&nbsp;&nbsp;&nbsp;Derivatives designated as hedging instruments |  | 41 |  | (54) |
| Gains (losses) on derivatives in cash flow hedging relationships |  |  |  |  |
| &nbsp;&nbsp;Foreign exchange contracts |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Amount of gains (losses) reclassified from accumulated other comprehensive income into income | 50 | (297) | 65 | 136 |
| Gains (losses) on derivatives not designated as hedging instruments |  |  |  |  |
| &nbsp;&nbsp;Foreign exchange contracts |  | (194) |  | (40) |
| &nbsp;&nbsp;Other derivatives |  |  |  | (9) |
| Total gains (losses) | $50 | $(491) | $65 | $87 |

---

**Note 11: Borrowings**

*Notes Payable, Short-Term Borrowings and Long-Term Debt*

Notes payable, short-term borrowings, including the current portion of long-term debt, and long-terms debt were as follows:

---

| | | |
|:---|:---|:---|
| | **As of** | **As of** |
| | **January 31, 2023** | **October 31, 2022** |
| Current portion of long-term debt<sup>(1)</sup> | $3727 | $3876 |
| Commercial paper | 1439 | 542 |
| Notes payable to banks, lines of credit and other | 183 | 194 |
| Total notes payable and short-term borrowings | 5349 | 4612 |
| Long-term debt | 7577 | 7853 |
| Total | $12926 | $12465 |

---

(1)&nbsp;&nbsp;&nbsp;&nbsp;As of January 31, 2023, the Current portion of long-term debt, net of discount and issuance costs, includes $1.3 billion associated with the asset-backed debt securities issued by the Company.

------

<u>[Table of Content](#i2c4659f3642b465bbf905d9dd6ad5f9d_7)</u>

**HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES**

**Notes to Condensed Consolidated Financial Statements (Continued)**

**(Unaudited)**

*Commercial Paper*

Hewlett Packard Enterprise maintains two commercial paper programs, "the Parent Programs", and a wholly-owned subsidiary maintains a third program. The Parent Program in the U.S. provides for the issuance of U.S. dollar-denominated commercial paper up to a maximum aggregate principal amount of $4.75 billion. The Parent Program outside the U.S. provides for the issuance of commercial paper denominated in U.S. dollars, euros, or British pounds up to a maximum aggregate principal amount of $3.0 billion or the equivalent in those alternative currencies. The combined aggregate principal amount of commercial paper outstanding under those two programs at any one time cannot exceed the $4.75 billion as authorized by Hewlett Packard Enterprise's Board of Directors. In addition, the Hewlett Packard Enterprise subsidiary's euro Commercial Paper/Certificate of Deposit Program provides for the issuance of commercial paper in various currencies of up to a maximum aggregate principal amount of $1.0 billion. As of January 31, 2023, $759 million was outstanding under the Parent Programs. As of October 31, 2022, no borrowings were outstanding under the Parent Programs. As of January 31, 2023 and October 31, 2022, $680 million and $542 million, respectively, were outstanding under the subsidiary's program.

*Revolving Credit Facility*

The Company maintains a senior unsecured revolving credit facility that was entered into in December 2021 with an aggregate lending commitment of $4.75 billion for a period of five years. As of January 31, 2023 and October 31, 2022, no borrowings were outstanding under this credit facility.

**Note 12: Stockholders' Equity**

The components of accumulated other comprehensive loss, net of taxes as of January 31, 2023, and changes during the three months ended January 31, 2023 were as follows:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Net unrealized<br>gains (losses) on<br>available-for-sale<br>securities** | **Net unrealized<br>gains (losses)<br>on cash<br>flow hedges** | **Unrealized<br>components<br>of defined<br>benefit plans** | **Cumulative<br>translation<br>adjustment** | **Accumulated<br>other<br>comprehensive<br>loss** |
| | **In millions** | **In millions** | **In millions** | **In millions** | **In millions** |
| Balance at beginning of period | $(1) | $109 | $(2596) | $(610) | $(3098) |
| Other comprehensive income (loss) before reclassifications | 5 | (518) |  | 20 | (493) |
| Reclassifications of losses into earnings |  | 247 | 35 |  | 282 |
| Tax benefit (provision) |  | 55 | (3) | 1 | 53 |
| Balance at end of period | $4 | $(107) | $(2564) | $(589) | $(3256) |

---

The components of accumulated other comprehensive loss, net of taxes as of January 31, 2022, and changes during the three months ended January 31, 2022 were as follows:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Net unrealized<br>gains (losses) on<br>available-for-sale<br>securities** | **Net unrealized<br>gains (losses)<br>on cash<br>flow hedges** | **Unrealized<br>components<br>of defined<br>benefit plans** | **Cumulative<br>translation<br>adjustment** | **Accumulated<br>other<br>comprehensive<br>loss** |
|  | **In millions** | **In millions** | **In millions** | **In millions** | **In millions** |
| Balance at beginning of period | $15 | $81 | $(2545) | $(466) | $(2915) |
| Other comprehensive (loss) income before reclassifications | (1) | 215 | 6 | (11) | 209 |
| Reclassifications of (gains) losses into earnings |  | (201) | 42 |  | (159) |
| Tax provision |  | (2) | (11) |  | (13) |
| Balance at end of period | $14 | $93 | $(2508) | $(477) | $(2878) |

---

*Share Repurchase Program*

For the three months ended January 31, 2023, the Company repurchased and settled a total of 4.7 million shares under its share repurchase program through open market repurchases, which included 0.3 million shares that were unsettled open market repurchases as of October 31, 2022. Additionally, as of January 31, 2023, the Company had unsettled open market repurchases

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<u>[Table of Content](#i2c4659f3642b465bbf905d9dd6ad5f9d_7)</u>

**HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES**

**Notes to Condensed Consolidated Financial Statements (Continued)**

**(Unaudited)**

of 0.1 million shares. Shares repurchased during the three months ended January 31, 2023 were recorded as a $70 million reduction to stockholders' equity. As of January 31, 2023, the Company had a remaining authorization of $1.3 billion for future share repurchases.

**Note 13: Net Earnings Per Share**

The Company calculates basic net earnings per share ("EPS") using net earnings and the weighted-average number of shares outstanding during the reporting period. Diluted net EPS includes the weighted-average dilutive effect of outstanding restricted stock units, stock options, and performance-based awards.

The reconciliations of the numerators and denominators of each of the basic and diluted net EPS calculations were as follows:

---

| | | |
|:---|:---|:---|
| | **For the three months ended January 31,** | **For the three months ended January 31,** |
| | **2023** | **2022** |
| | **In millions, except per share amounts** | **In millions, except per share amounts** |
| Numerator: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Net earnings | $501 | $513 |
| Denominator: |  |  |
| &nbsp;&nbsp;&nbsp;Weighted-average shares used to compute basic net EPS | 1298 | 1304 |
| &nbsp;&nbsp;&nbsp;Dilutive effect of employee stock plans | 17 | 21 |
| &nbsp;&nbsp;&nbsp;Weighted-average shares used to compute diluted net EPS | 1315 | 1325 |
| Net earnings per share: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Basic | $0.39 | $0.39 |
| &nbsp;&nbsp;&nbsp;&nbsp;Diluted | $0.38 | $0.39 |
| Anti-dilutive weighted-average stock awards<sup>(1)</sup> | 9 | 1 |

---

(1)The Company excludes shares potentially issuable under employee stock plans that could dilute basic net EPS in the future from the calculation of diluted net earnings per share, as their effect, if included, would have been anti-dilutive for the periods presented.

**Note 14: Litigation, Contingencies, and Commitments**

***Litigation***

Hewlett Packard Enterprise is involved in various lawsuits, claims, investigations and proceedings including those consisting of intellectual property, commercial, securities, employment, employee benefits, and environmental matters, which arise in the ordinary course of business. In addition, as part of the Separation and Distribution Agreement (the "Separation and Distribution Agreement") entered into in connection with Hewlett Packard Enterprise's spin-off from HP Inc. (formerly known as "Hewlett-Packard Company") (the "Separation"), Hewlett Packard Enterprise and HP Inc. agreed to cooperate with each other in managing certain existing litigation related to both parties' businesses. The Separation and Distribution Agreement included provisions that allocate liability and financial responsibility for pending litigation involving the parties, as well as provide for cross-indemnification of the parties against liabilities to one party arising out of liabilities allocated to the other party. The Separation and Distribution Agreement also included provisions that assign to the parties responsibility for managing pending and future litigation related to the general corporate matters of HP Inc. arising prior to the Separation. Hewlett Packard Enterprise records a liability when it believes that it is both probable that a liability has been incurred and the amount of loss can be reasonably estimated. Significant judgment is required to determine both the probability of having incurred a liability and the estimated amount of the liability. Hewlett Packard Enterprise reviews these matters at least quarterly and adjusts these liabilities to reflect the impact of negotiations, settlements, rulings, advice of legal counsel, and other updated information and events pertaining to a particular matter. Litigation is inherently unpredictable. However, Hewlett Packard Enterprise believes it has valid defenses with respect to legal matters pending against us. Nevertheless, cash flows or results of operations could be materially affected in any particular period by the resolution of one or more of these contingencies. Hewlett Packard Enterprise believes it has recorded adequate provisions for any such matters and, as of January 31, 2023, it was not reasonably possible that a material loss had been incurred in connection with such matters in excess of the amounts recognized in its financial statements.

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<u>[Table of Content](#i2c4659f3642b465bbf905d9dd6ad5f9d_7)</u>

**HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES**

**Notes to Condensed Consolidated Financial Statements (Continued)**

**(Unaudited)**

*Litigation, Proceedings and Investigations*

*<u>Ross and Rogus v. Hewlett Packard Enterprise Company.</u>* On November 8, 2018, a putative class action complaint was filed in the Superior Court of California, County of Santa Clara alleging that HPE pays its California-based female employees "systemically lower compensation" than HPE pays male employees performing substantially similar work. The complaint alleges various California state law claims, including California's Equal Pay Act, Fair Employment and Housing Act, and Unfair Competition Law, and seeks certification of a California-only class of female employees employed in certain "Covered Positions." The complaint seeks damages, statutory and civil penalties, attorneys' fees and costs. On April 2, 2019, HPE filed a demurrer to all causes of action and an alternative motion to strike portions of the complaint. On July 2, 2019, the court denied HPE's demurrer as to the claims of the putative class and granted HPE's demurrer as to the claims of the individual plaintiffs. The parties have reached an agreement to resolve this litigation. The terms of the class settlement are reflected in Plaintiff's Motion for Preliminary Approval of Class Action Settlement and Certification of Settlement Class, which was filed with the Court on September 26, 2022. On November 3, 2022, the Court granted Plaintiff's motion and preliminarily approved the terms of the class settlement, which defines the settlement class as all "[w]omen actively employed in California by Defendant at any point from November 1, 2015 through the date of Preliminary Approval" who were employed in a covered job code. The settlement class excludes certain individuals, including those who previously executed an arbitration agreement with HPE or an agreement that resulted in a release or waiver of claims. The hearing on final approval of the class settlement is scheduled for April 27, 2023.

*<u>India Directorate of Revenue Intelligence Proceedings</u>.* On April 30 and May 10, 2010, the India Directorate of Revenue Intelligence (the "DRI") issued show cause notices to Hewlett-Packard India Sales Private Ltd ("HP India"), a subsidiary of HP Inc., seven HP India employees and one former HP India employee alleging that HP India underpaid customs duties while importing products and spare parts into India and seeking to recover an aggregate of approximately $370 million, plus penalties. Prior to the issuance of the show cause notices, HP India deposited approximately $16 million with the DRI and agreed to post a provisional bond in exchange for the DRI's agreement to not seize HP India products and spare parts and to not interrupt the transaction of business by HP India.

On April 11, 2012, the Bangalore Commissioner of Customs issued an order on the products-related show cause notice affirming certain duties and penalties against HP India and the named individuals of approximately $386 million, of which HP India had already deposited $9 million. On December 11, 2012, HP India voluntarily deposited an additional $10 million in connection with the products-related show cause notice. On April 20, 2012, the Commissioner issued an order on the parts-related show cause notice affirming certain duties and penalties against HP India and certain of the named individuals of approximately $17 million, of which HP India had already deposited $7 million. After the order, HP India deposited an additional $3 million in connection with the parts-related show cause notice to avoid certain penalties.

HP India filed appeals of the Commissioner's orders before the Customs Tribunal along with applications for waiver of the pre-deposit of remaining demand amounts as a condition for hearing the appeals. The Customs Department has also filed cross-appeals before the Customs Tribunal. On January 24, 2013, the Customs Tribunal ordered HP India to deposit an additional $24 million against the products order, which HP India deposited in March 2013. The Customs Tribunal did not order any additional deposit to be made under the parts order. In December 2013, HP India filed applications before the Customs Tribunal seeking early hearing of the appeals as well as an extension of the stay of deposit as to HP India and the individuals already granted until final disposition of the appeals. On February 7, 2014, the application for extension of the stay of deposit was granted by the Customs Tribunal until disposal of the appeals. On October 27, 2014, the Customs Tribunal commenced hearings on the cross-appeals of the Commissioner's orders. The Customs Tribunal rejected HP India's request to remand the matter to the Commissioner on procedural grounds. The hearings were scheduled to reconvene on April 6, 2015, and again on November 3, 2015, April 11, 2016, and January 15, 2019, but were canceled at the request of the Customs Tribunal. The hearing was again rescheduled for January 20, 2021 but was postponed and has not yet been rescheduled.

*<u>ECT Proceedings</u>.* In January 2011, the postal service of Brazil, Empresa Brasileira de Correios e Telégrafos ("ECT"), notified a former subsidiary of HP Inc. in Brazil ("HP Brazil") that it had initiated administrative proceedings to consider whether to suspend HP Brazil's right to bid and contract with ECT related to alleged improprieties in the bidding and contracting processes whereby employees of HP Brazil and employees of several other companies allegedly coordinated their bids and fixed results for three ECT contracts in 2007 and 2008. In late July 2011, ECT notified HP Brazil it had decided to apply the penalties against HP Brazil and suspend HP Brazil's right to bid and contract with ECT for five years, based upon the evidence before it. In August 2011, HP Brazil appealed ECT's decision. In April 2013, ECT rejected HP Brazil's appeal, and the administrative proceedings were closed with the penalties against HP Brazil remaining in place. In parallel, in September 2011,

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<u>[Table of Content](#i2c4659f3642b465bbf905d9dd6ad5f9d_7)</u>

**HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES**

**Notes to Condensed Consolidated Financial Statements (Continued)**

**(Unaudited)**

HP Brazil filed a civil action against ECT seeking to have ECT's decision revoked. HP Brazil also requested an injunction suspending the application of the penalties until a final ruling on the merits of the case. The court of first instance has not issued a decision on the merits of the case, but it has denied HP Brazil's request for injunctive relief. HP Brazil appealed the denial of its request for injunctive relief to the intermediate appellate court, which issued a preliminary ruling denying the request for injunctive relief but reducing the length of the sanctions from five to two years. HP Brazil appealed that decision and, in December 2011, obtained a ruling staying enforcement of ECT's sanctions until a final ruling on the merits of the case. HP Brazil expects any appeal of the decision on the merits to last several years.

*<u>Forsyth, et al. vs. HP Inc. and Hewlett Packard Enterprise.</u>* This purported class and collective action was filed on August 18, 2016 and an amended complaint was filed on December 19, 2016 in the United States District Court for the Northern District of California, against HP Inc. and Hewlett Packard Enterprise (collectively, "Defendants") alleging Defendants violated the Federal Age Discrimination in Employment Act ("ADEA"), the California Fair Employment and Housing Act, California public policy and the California Business and Professions Code by terminating older workers and replacing them with younger workers. Plaintiffs seek to certify a nationwide collective action under the ADEA comprised of all individuals age 40 years and older who had their employment terminated by an HP entity pursuant to a work force reduction ("WFR") plan on or after December 9, 2014 for individuals terminated in deferral states and on or after April 8, 2015 in non-deferral states. Plaintiffs also seek to certify a Rule 23 class under California law comprised of all persons 40 years or older employed by Defendants in the state of California and terminated pursuant to a WFR plan on or after August 18, 2012. Following the filing of Plaintiffs' Fourth Amended Complaint, Plaintiffs filed a Motion for Preliminary Class Certification on December 30, 2020. On April 14, 2021, Plaintiffs' Motion for Conditional Class Certification was granted. The conditionally certified collective action consists of all individuals who had their employment terminated by Defendants pursuant to a WFR Plan on or after November 1, 2015, and who were 40 years or older at the time of such termination. The collective action excludes all individuals who signed a Waiver and General Release Agreement or an Agreement to Arbitrate Claims. The Court-approved notice was issued to potential class members and the opt-in period is now closed.

*<u>Oracle America, Inc., et al. v. Hewlett Packard Enterprise Company (Terix copyright matter).</u>* On March 22, 2016, Oracle filed a complaint against HPE in the United States District Court for the Northern District of California, alleging copyright infringement, interference with contract, intentional interference with prospective economic relations, and unfair competition. Oracle's claims arise out of HPE's prior use of a third-party maintenance provider named Terix Computer Company, Inc. ("Terix"). Oracle contends that in connection with HPE's use of Terix as a subcontractor for certain customers of HPE's multivendor support business, Oracle's copyrights were infringed, and HPE is liable for vicarious and contributory infringement and related claims. The lawsuit against HPE follows a prior lawsuit brought by Oracle against Terix in 2013 relating to Terix's alleged unauthorized provision of Solaris patches to customers on Oracle hardware. On January 29, 2019, the court granted HPE's Motion for Summary Judgment as to all of Oracle's claims. On February 20, 2019, the court entered judgment in favor of HPE, dismissing Oracle's claims in their entirety. Oracle appealed the trial court's ruling to the United States Court of Appeals for the Ninth Circuit. On August 20, 2020, the United States Court of Appeals for the Ninth Circuit issued its ruling, affirming in part and reversing in part the trial court's decision granting summary judgment in favor of HPE. On October 6, 2020, the matter was remanded to the United States District Court for the Northern District of California. On June 4, 2021, the Court issued an order denying HPE's motion for summary judgment and granting-in-part Oracle's motion for partial summary judgment as to a certain of HPE's defenses. Trial began on May 23, 2022. On June 15, 2022, the jury returned its verdict, awarding $30 million in compensatory damages to Oracle and rejecting Oracle's request for punitive damages. Judgment has not yet been entered by the Court as the parties are engaged in post-verdict motion practice on multiple issues, including HPE's Motion for Judgment as a Matter of Law and Oracle's request for an award of prejudgment interest and attorneys' fees. The parties have since reached an agreement to resolve this dispute. Pursuant to the terms of the settlement, the case has been dismissed, and the matter is closed.

*<u>Q3 Networking Litigation.</u>* On September 21 and September 22, 2020, Q3 Networking LLC filed complaints against HPE, Aruba Networks, Commscope and Netgear in the United States District Court for the District of Delaware and the United States International Trade Commission ("ITC"). Both complaints allege infringement of four patents, and the ITC complaint defines the "accused products" as "routers, access points, controllers, network management servers, other networking products, and hardware and software components thereof." The ITC action was instituted on October 23, 2020. The District of Delaware action has been stayed pending resolution of the ITC action. The evidentiary hearing before the ITC has been completed. On December 7, 2021, the Administrative Law Judge issued his initial determination finding no violation of section 337 of the Tariff Act. On May 3, 2022, the ITC issued its Notice of Final Determination, affirming the initial determination and

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<u>[Table of Content](#i2c4659f3642b465bbf905d9dd6ad5f9d_7)</u>

**HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES**

**Notes to Condensed Consolidated Financial Statements (Continued)**

**(Unaudited)**

terminating the investigation. On June 18, 2022, Q3 Networking filed a petition for review of the ITC ruling with the United States Court of Appeals for the Federal Circuit.

*Shared Litigation with HP Inc., DXC and Micro Focus*

As part of the Separation and Distribution Agreements between Hewlett Packard Enterprise and HP Inc., Hewlett Packard Enterprise and DXC, and Hewlett Packard Enterprise and Seattle SpinCo, the parties to each agreement agreed to cooperate with each other in managing certain existing litigation related to both parties' businesses. The Separation and Distribution Agreements also included provisions that assign to the parties responsibility for managing pending and future litigation related to the general corporate matters of HP Inc. (in the case of the separation of Hewlett Packard Enterprise from HP Inc.) or of Hewlett Packard Enterprise (in the case of the separation of DXC from Hewlett Packard Enterprise and the separation of Seattle SpinCo from Hewlett Packard Enterprise), in each case arising prior to the applicable separation.

*Environmental*

The Company's operations and products are or may in the future become subject to various federal, state, local, and foreign laws and regulations concerning the environment, including laws addressing the discharge of pollutants into the air and water; the management, movement, and disposal of hazardous substances and wastes; the clean-up of contaminated sites; product safety and compliance; the energy consumption of products, services, and operations; and the operational or financial responsibility for recycling, treatment, and disposal of those products. This includes legislation that makes producers of electrical goods, including servers and networking equipment, financially responsible for specified collection, recycling, treatment and disposal of past and future covered products (sometimes referred to as "product take-back legislation"). The Company could incur substantial costs, its products could be restricted from entering certain jurisdictions, and it could face other sanctions, if it were to violate or become liable under environmental laws, including those related to addressing climate change and other environmental related issues, or if its products become non-compliant with such environmental laws. The Company's potential exposure includes impacts on revenue, fines and civil or criminal sanctions, third-party property damage or personal injury claims and clean-up costs. The amount and timing of costs to comply with environmental laws are difficult to predict.

In particular, the Company may become a party to, or otherwise involved in, proceedings brought by U.S. or state environmental agencies under the Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA"), known as "Superfund," or other federal, state or foreign laws and regulations addressing the clean-up of contaminated sites, and may become a party to, or otherwise involved in, proceedings brought by private parties for contribution towards clean-up costs. The Company is also contractually obligated to make financial contributions to address actions related to certain environmental liabilities, both ongoing and arising in the future, pursuant to its Separation and Distribution Agreement with HP Inc.

***Guarantees***

In the ordinary course of business, the Company may issue performance guarantees to certain of its clients, customers, and other parties pursuant to which the Company has guaranteed the performance obligations of third parties. Some of those guarantees may be backed by standby letters of credit or surety bonds. In general, the Company would be obligated to perform over the term of the guarantee in the event a specified triggering event occurs as defined by the guarantee. The Company believes the likelihood of having to perform under a material guarantee is remote.

The Company has entered into service contracts with certain of its clients that are supported by financing arrangements. If a service contract is terminated as a result of the Company's non-performance under the contract or failure to comply with the terms of the financing arrangement, the Company could, under certain circumstances, be required to acquire certain assets related to the service contract. The Company believes the likelihood of having to acquire a material amount of assets under these arrangements is remote.

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<u>[Table of Content](#i2c4659f3642b465bbf905d9dd6ad5f9d_7)</u>

**HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES**

**Notes to Condensed Consolidated Financial Statements (Continued)**

**(Unaudited)**

***Indemnifications***

In the ordinary course of business, the Company enters into contractual arrangements under which the Company may agree to indemnify a third party to such arrangement from any losses incurred relating to the services they perform on behalf of the Company or for losses arising from certain events as defined within the particular contract, which may include, for example, litigation or claims relating to past performance. The Company also provides indemnifications to certain vendors and customers against claims of IP infringement made by third parties arising from the use by such vendors and customers of the Company's software products and support services and certain other matters. Some indemnifications may not be subject to maximum loss clauses. Historically, payments made related to these indemnifications have been immaterial.

**Note 15: Equity Method Investments**

Pursuant to the Shareholders' Agreement among the Company, Unisplendor International Technology Limited ("UNIS"), and H3C Technologies Co Limited ("H3C") dated as of May 1, 2016, as amended from time to time, and most recently on October 28, 2022, the Company delivered a notice to UNIS on December 30, 2022, to exercise its right to put to UNIS, for cash consideration, all of the H3C shares held by the Company, which represent 49% of the total issued share capital of H3C, at a price per share of 15.0 times the last twelve months' post-tax profit of H3C (measured as of the period ending April 30, 2022) divided by the total number of H3C shares outstanding as of December 30, 2022. The determination of the purchase price remains subject to agreement among the parties, taking into account certain adjustments to the post-tax profit of H3C pursuant to the terms of the Shareholders' Agreement and the availability of the necessary information to make such determination. The disposition is also subject to obtaining required regulatory approvals.

**Note 16: Subsequent Events**

Subsequent to January 31, 2023, the Company announced and entered into definitive agreements to acquire Athonet and Axis Security. Athonet is a private cellular network technology provider that delivers mobile core networks to enterprises and communication service providers. Axis Security is a cloud security provider, which will allow the Company to expand its edge-to-cloud security capabilities by offering a Security Access Services Edge solution. The total expected cash purchase price of the acquisitions is approximately $490 million, subject to normal working capital and other closing adjustments. The Company expects both transactions to close during fiscal 2023.

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**<u>[**Table of Contents**](#i2c4659f3642b465bbf905d9dd6ad5f9d_7)</u>**

**Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.**

**HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES**

For purposes of this Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") section, we use the terms "Hewlett Packard Enterprise", "HPE", the "Company", "we", "us" and "our" to refer to Hewlett Packard Enterprise Company. References in the MD&A section to "former Parent" refer to HP Inc.

We intend the discussion of our financial condition and results of operations that follows to provide information that will assist the reader in understanding our Condensed Consolidated Financial Statements, changes in certain key items in these financial statements from period-to-period and the primary factors that accounted for these changes, as well as how certain accounting principles, policies, and estimates affect our Condensed Consolidated Financial Statements. This discussion should be read in conjunction with our Condensed Consolidated Financial Statements and the related notes that appear elsewhere in this document.

The financial discussion and analysis in the following MD&A compares the three months ended January 31, 2023 to the comparable prior-year period and where appropriate, as of January 31, 2023, unless otherwise noted.

This MD&A is organized as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Trends and Uncertainties*. A discussion of material events and uncertainties known to management, such as the ongoing macroeconomic environment of supply chain constraints, uneven customer demand, and inflationary pressures, and recently enacted tax legislation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*• Executive Overview.* A discussion of our business and a summary analysis of our financial performance and other highlights, including non-GAAP financial measures, affecting the Company to provide context to the remainder of the MD&A.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Results of Operations.* A discussion of the results of operations at the consolidated level is followed by a discussion of the results of operations at the segment level.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Critical Accounting Policies and Estimates.* A discussion of accounting policies and estimates that we believe are important to understanding the assumptions and judgments incorporated in our reported financial results.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Liquidity and Capital Resources.* An analysis of changes in our cash flows, financial condition, liquidity, and cash requirements and commitments.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*• GAAP to non-GAAP Reconciliations*. Each non-GAAP financial measure has been reconciled to the most directly comparable GAAP financial measure therein. This section also includes a discussion of the usefulness of non-GAAP financial measures, and material limitations associated with the use of non-GAAP financial measures.

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<u>[Table of Content](#i2c4659f3642b465bbf905d9dd6ad5f9d_7)</u>

**HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES**

**Management's Discussion and Analysis of**

**Financial Condition and Results of Operations (Continued)**

**TRENDS AND UNCERTAINTIES**

The demand environment has slowed during the first quarter of fiscal 2023 with uneven growth across various sectors. At the same time, mild improvements to industry-wide supply constraints have helped to ease certain of the supply chain challenges we encountered in the recent past, including facilitating an initial reduction to the high backlog levels we experienced in fiscal 2022. Nevertheless, we expect supply chain and inflationary pressures to continue to impact our overall costs. Additionally, we expect these pressures, along with possibly uneven demand, to moderate our revenue growth and delay certain unit shipments, resulting in part in an elevated level of order backlog and related inventory at the end of the current period.

To address supply chain challenges, we are taking proactive measures, such as guiding certain customer demand to specific products, enhancing component engineering design, and multi-sourcing with indirect procurement. As previously mentioned, although certain of the supply chain pressures are beginning to ease, we expect the supply chain environment to continue to present challenges in the near term.

Additionally, we are experiencing a challenging foreign exchange environment, which has moderated our revenue and earnings growth. We expect the unfavorable foreign exchange effects and inflationary trend to continue in the longer term. We expect the substantial completion of our HPE Next and cost optimization and prioritization restructuring plans, coupled with related cost reduction measures and operational efficiencies, may moderate the impact of unfavorable foreign exchange effects and inflationary pressures in fiscal 2023.

*Recent U.S. Tax Legislation*

On August 16, 2022, the U.S. government enacted the Inflation Reduction Act of 2022 (the "Inflation Reduction Act") into law. The Inflation Reduction Act includes a new corporate alternative minimum tax (the "Corporate AMT") of 15% on the adjusted financial statement income ("AFSI) of corporations with average AFSI exceeding $1.0 billion over a three-year period. The Corporate AMT is effective for the Company beginning in fiscal 2024. We are evaluating the Corporate AMT and its potential impact on our future U.S. tax expense, cash taxes, and effective tax rate. Additionally, the Inflation Reduction Act imposes an excise tax of 1% tax on the fair market value of net stock repurchases made after December 31, 2022. The impact of this provision will be dependent on the extent of share repurchases made in future periods.

Other than the previous discussion of the ongoing macroeconomic environment of supply chain constraints, inflationary pressures, and recently enacted tax legislation, management believes that there have been no significant changes to the discussion of "Trends and Uncertainties" in Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations", of the Company's Annual Report on Form 10-K for the fiscal year ended October 31, 2022.

**EXECUTIVE OVERVIEW**

We are a global technology leader focused on developing intelligent solutions that allow customers to capture, analyze, and act upon data seamlessly from edge to cloud. We enable customers to accelerate business outcomes by driving new business models, creating new customer and employee experiences, and increasing operational efficiency today and into the future. Our customers range from small-and-medium size businesses to large global enterprises and governmental entities. Our legacy dates to a partnership founded in 1939 by William R. Hewlett and David Packard, and we strive every day to uphold and enhance that legacy through our dedication to providing innovative technological solutions to our customers.

Our operations are organized into six reportable segments for financial reporting purposes: Compute, High Performance Computing and Artificial Intelligence ("HPC & AI"), Storage, Intelligent Edge, Financial Services ("FS"), and Corporate Investments and Other.

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<u>[Table of Content](#i2c4659f3642b465bbf905d9dd6ad5f9d_7)</u>

**HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES**

**Management's Discussion and Analysis of**

**Financial Condition and Results of Operations (Continued)**

**Financial Results**

The following table summarizes our condensed consolidated GAAP financial results:

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| | | | |
|:---|:---|:---|:---|
| | **For the three months ended January 31,** | **For the three months ended January 31,** | **For the three months ended January 31,** |
| | **2023** | **2022** | **Change** |
| | **Dollars in millions, except per share amounts** | **Dollars in millions, except per share amounts** | |
| Net revenue | $7809 | $6961 | 12.2% |
| Gross profit | $2658 | $2344 | 13.4% |
| Gross profit margin | 34.0% | 33.7% | 0.3pts |
| Earnings from operations | $591 | $448 | 31.9% |
| Operating profit margin | 7.6% | 6.4% | 1.2pts |
| Net earnings | $501 | $513 | (2.3)% |
| Diluted net earnings per share | $0.38 | $0.39 | $(0.01) |
| Cash flow used in operations | $(829) | $(76) | $(753) |

---

Net revenue of $7.8 billion represented an increase of 12.2% (increased 17.7% on a constant currency basis) due to a high order backlog and an improving supply chain environment. The net revenue increase was moderated by unfavorable currency fluctuations. The net revenue increase resulted primarily from effective pricing management in server products, supply and operational improvements in HPE Cray Supercomputing, and strong demand for our networking products. The gross profit margin of 34.0% (or $2.7 billion) represents an increase of 0.3 percentage points from the prior-year period as the combination of pricing discipline in server and storage products and a mix shift to higher margin software rich offerings was offset by lower support services revenue. The operating profit margin of 7.6% represents an increase of 1.2 percentage points due primarily to strong expense management moderated by higher variable compensation expense including planned investments in research and development.

The following table summarizes our condensed consolidated non-GAAP financial results:

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| | | | |
|:---|:---|:---|:---|
| | **For the three months ended January 31,** | **For the three months ended January 31,** | **For the three months ended January 31,** |
| | **2023** | **2022** | **Change** |
| | **Dollars in millions, except per share amounts** | **Dollars in millions, except per share amounts** | |
| Net revenue adjusted for currency | $8193 | $6961 | 17.7% |
| Non-GAAP gross profit | $2674 | $2360 | 13.3% |
| Non-GAAP gross profit margin | 34.2% | 33.9% | 0.3pts |
| Non-GAAP earnings from operations | $918 | $768 | 19.5% |
| Non-GAAP operating profit margin | 11.8% | 11.0% | 0.8pts |
| Non-GAAP net earnings | $828 | $697 | 18.8% |
| Non-GAAP diluted net earnings per share | $0.63 | $0.53 | $0.10 |
| Free cash flow | $(1326) | $(577) | $(749) |

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<u>[Table of Content](#i2c4659f3642b465bbf905d9dd6ad5f9d_7)</u>

**HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES**

**Management's Discussion and Analysis of**

**Financial Condition and Results of Operations (Continued)**

Each non-GAAP financial measure has been reconciled to the most directly comparable GAAP financial measure herein. Please refer to the section "GAAP to non-GAAP Reconciliations" included in this MD&A for these reconciliations, a discussion of the usefulness of non-GAAP financial measures and material limitations associated with the use of non-GAAP financial measures.

*Annualized Revenue Run-rate ("ARR")*

ARR represents the annualized revenue of all net HPE GreenLake edge-to-cloud platform services revenue, related financial services revenue (which includes rental income from operating leases and interest income from finance leases), and software-as-a-service, software consumption revenue, and other as-a-service offerings, recognized during a quarter and multiplied by four. We believe that ARR is a metric that allows management to better understand and highlight the potential future performance of our as-a-service business. We also believe ARR provides investors with greater transparency to our financial information and of the performance metric used in our financial and operational decision making and allows investors to see our results "through the eyes of management." We use ARR as a performance metric. ARR should be viewed independently of net revenue and is not intended to be combined with it.

ARR does not have any standardized definition and is therefore unlikely to be comparable to similarly titled measures presented by other companies. ARR is not a forecast and the active contracts at the end of a reporting period used in calculating ARR may or may not be extended or renewed by our customers.

The following presents our ARR as of January 31, 2023 and 2022:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **For the three months ended January 31,** | **For the three months ended January 31,** | **For the three months ended January 31,** | **For the three months ended January 31,** |
| | **2023** | **2023** | **2022** | **2022** |
| | **Dollars in millions** | **Dollars in millions** | **Dollars in millions** | **Dollars in millions** |
| ARR | $ | 1006 | $ | 798 |
| *Year-over-year growth rate* | *26%* | *26%* | *23%* | *23%* |

---

The 26% increase in ARR was due primarily to growth in our HPE GreenLake edge-to-cloud platform and related financial services moderated by unfavorable currency fluctuations. The growth in the HPE GreenLake edge-to-cloud platform was due to an expanding customer installed base. At the segment level, the growth was led by Intelligent Edge as-a-service activity and Storage as-a-service including Zerto.

*Dividends*

Returning capital to our shareholders remains an important part of our capital allocation framework, which also consists of strategic investments. During the first quarter of fiscal 2023, we paid a quarterly dividend of $0.12 per share to our shareholders. On March 2, 2023, we declared a regular cash dividend of $0.12 per share on our common stock, payable on April 14, 2023, to our shareholders of record as of the close of business on March 17, 2023. As of January 31, 2023, we had a remaining authorization of $1.3 billion for future share repurchases.

**RESULTS OF OPERATIONS**

Revenue from our international operations has historically represented, and we expect will continue to represent, a majority of our overall net revenue. As a result, our revenue growth has been impacted, and we expect will continue to be impacted, by fluctuations in foreign currency exchange rates. In order to provide a framework for assessing performance excluding the impact of foreign currency fluctuations, we present the year-over-year percentage change in revenue on a constant currency basis, which assumes no change in foreign currency exchange rates from the prior-year period and does not adjust for any repricing or demand impacts from changes in foreign currency exchange rates. This change in revenue on a constant currency basis is calculated as the quotient of (a) current year revenue converted to U.S. dollars using the prior-year period's foreign currency exchange rates divided by (b) the prior-year period revenue. This information is provided so that revenue can be viewed without the effect of fluctuations in foreign currency exchange rates, which is consistent with how management evaluates our revenue results and trends. This constant currency disclosure is provided in addition to, and not as a substitute for, the year-over-year percentage change in revenue on a GAAP basis. Other companies may calculate and define similarly labeled items differently, which may limit the usefulness of this measure for comparative purposes.

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<u>[Table of Content](#i2c4659f3642b465bbf905d9dd6ad5f9d_7)</u>

**HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES**

**Management's Discussion and Analysis of**

**Financial Condition and Results of Operations (Continued)**

Results of operations in dollars and as a percentage of net revenue were as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **For the three months ended January 31,** | **For the three months ended January 31,** | **For the three months ended January 31,** | **For the three months ended January 31,** |
| | **2023** | **2023** | **2022** | **2022** |
| | **Dollars** | **% of Revenue** | **Dollars** | **% of Revenue** |
| | **Dollars in millions** | **Dollars in millions** | **Dollars in millions** | **Dollars in millions** |
| Net revenue | $7809 | 100.0% | $6961 | 100.0% |
| Cost of sales | 5151 | 66.0 | 4617 | 66.3 |
| &nbsp;&nbsp;&nbsp;&nbsp;Gross profit | 2658 | 34.0 | 2344 | 33.7 |
| Research and development | 623 | 8.0 | 504 | 7.2 |
| Selling, general and administrative | 1257 | 16.1 | 1201 | 17.3 |
| Amortization of intangible assets | 73 | 0.9 | 73 | 1.1 |
| Transformation costs | 102 | 1.3 | 111 | 1.6 |
| Disaster charges (recovery) | 1 |  | (1) |  |
| Acquisition, disposition and other related charges | 11 | 0.1 | 8 | 0.1 |
| &nbsp;&nbsp;&nbsp;&nbsp;Earnings from operations | 591 | 7.6 | 448 | 6.4 |
| Interest and other, net | (25) | (0.3) | (5) |  |
| Tax indemnification and related adjustments | (1) |  | (17) | (0.2) |
| Non-service net periodic benefit credit |  |  | 36 | 0.5 |
| Earnings from equity interests | 58 | 0.7 | 31 | 0.4 |
| &nbsp;&nbsp;&nbsp;&nbsp;Earnings before (provision) benefit for taxes | 623 | 8.0 | 493 | 7.1 |
| (Provision) benefit for taxes | (122) | (1.6) | 20 | 0.3 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net earnings | $501 | 6.4% | $513 | 7.4% |

---

***Net revenue***

Net revenue of $7.8 billion represented an increase of $848 million, or 12.2% (increased 17.7% on a constant currency basis). U.S. net revenue increased by $567 million, or 24.5% to $2.9 billion, and net revenue from outside of the U.S. increased by $281 million, or 6.1%, to $4.9 billion.

From a segment perspective, net revenue increased across most of our segments due to the improved demand environment led by revenue growth of 34%, 25%, 14%, 5% and 4% in HPC & AI, Intelligent Edge, Compute, Storage and Financial Services, respectively, and decreased 10% in Corporate Investments and Other.

The components of the weighted net revenue change by segment were as follows:

---

| | |
|:---|:---|
| | **For the three months ended January 31, 2023** |
| | **Percentage points** |
| Compute | 5.9 |
| HPC & AI | 3.8 |
| Storage | 0.8 |
| Intelligent Edge | 3.2 |
| Financial Services | 0.4 |
| Corporate Investments | (0.3) |
| &nbsp;&nbsp;&nbsp;Total Segment | 13.8 |
| Elimination of Intersegment net revenue and Other | (1.6) |
| &nbsp;&nbsp;&nbsp;&nbsp;Total HPE | 12.2 |

---

------

<u>[Table of Content](#i2c4659f3642b465bbf905d9dd6ad5f9d_7)</u>

**HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES**

**Management's Discussion and Analysis of**

**Financial Condition and Results of Operations (Continued)**

Please refer to the section "Segment Information" further below for a discussion of our results of operations for each reportable segment.

***Gross profit***

Gross profit margin of 34.0%, represents an increase of 0.3 percentage points as the combination of pricing discipline and strong cost management in server and storage products and a mix shift to higher margin software rich offerings was offset by lower support services revenue and higher variable compensation expense.

***Operating expenses***

*Research and development ("R&D")*

R&D expense increased by $119 million, or 24% due primarily to higher employee cost driven by higher variable compensation expense.

*Selling, general and administrative ("SG&A")*

SG&A expense increased by $56 million, or 5% due primarily to higher software expenditures, increased employee cost driven by higher variable compensation expense and increased travel expense as the economy reopens and COVID-19 restrictions ease, all of which contributed 1.6 percentage points, 1.5 percentage points and 1.1 percentage points, respectively, to the change. Additionally, the overall increase in SG&A expense was moderated across various expense categories by favorable currency fluctuations.

*Transformation programs and costs*

Our transformation programs consist of the cost optimization and prioritization plan (launched in 2020) and the HPE Next initiative (launched in 2017).

Transformation costs decreased by $9 million, or 8% due to lower charges incurred in the current period as these plans approach completion through fiscal 2023. For a further discussion, refer to Note 3, "Transformation Programs" to the Condensed Consolidated Financial Statements in Item 1 of Part I.

***Interest and other, net*** 

Interest and other, net expense increased by $20 million due primarily to the impact of the prior period containing gains from equity investments and from the sale of certain assets, and increased interest expense in the current period. This increase was moderated by favorable currency fluctuations and increased interest income from higher interest rates in the current period.

***Tax indemnification and related adjustments***

We record changes to certain pre-separation and pre-divestiture tax liabilities and tax receivables for which we remain liable on behalf of the separated or divested business, but which may not be subject to indemnification. We recorded Tax indemnification and related adjustments expense of $1 million and $17 million for the three months ended January 31, 2023 and 2022, respectively.

***Non-service net periodic benefit credit***

Non-service net periodic benefit credit decreased by $36 million due primarily to increased interest cost resulting from higher discount rates, partially offset by higher expected returns on assets and lower amortized actuarial losses in the current periods.

***Earnings from equity interests***

Earnings from equity interests primarily represents our 49% interest in H3C Technologies Co. Limited ("H3C") and the amortization of our interest in basis difference. Earnings from equity interests increased by $27 million due primarily to the current period containing higher net income earned by H3C.

------

<u>[Table of Content](#i2c4659f3642b465bbf905d9dd6ad5f9d_7)</u>

**HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES**

**Management's Discussion and Analysis of**

**Financial Condition and Results of Operations (Continued)**

***(Provision) benefit for taxes***

For the three months ended January 31, 2023 and 2022, we recorded income tax expense of $122 million and income tax benefit of $20 million, respectively, which reflects an effective tax rate of 19.6% and (4.1)%, respectively. Our effective tax rate generally differs from the U.S. federal statutory rate of 21% due to favorable tax rates associated with certain earnings from our operations in lower tax jurisdictions throughout the world but are also impacted by discrete tax adjustments during each fiscal period.

For further discussion, refer to Note 5, "Taxes on Earnings" to the Condensed Consolidated Financial Statements in Item 1 of Part I.

**Segment Information**

Hewlett Packard Enterprise's organizational structure is based on a number of factors that the Chief Operating Decision Maker, who is the Chief Executive Officer ("CEO"), uses to evaluate, view, and run our business operations, which include, but are not limited to, customer base and homogeneity of products and technology. The segments are based on this organizational structure and information reviewed by Hewlett Packard Enterprise's management to evaluate segment results.

As described in Note 1, "Overview and Summary of Significant Accounting Policies," effective at the beginning of the first quarter of fiscal 2023, HPE implemented an organizational change to align its segment financial reporting more closely with its current business structure resulting in changes to the previously reported segment net revenue and earnings from operations of the Compute and Storage segments. These changes had no impact to HPE's previously reported consolidated GAAP results. A description of the products and services for each segment, along with other pertinent information related to our segments can be found in Note 2, "Segment Information" to the Condensed Consolidated Financial Statements in Item 1 of Part I.

***Segment Results***

The following table and ensuing discussion provide an overview of our key financial metrics by segment for the three months ended January 31, 2023, as compared to the prior-year period:

---

| | | | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **HPE Consolidated** | **HPE Consolidated** | **Compute** | **Compute** | **HPC & AI** | **HPC & AI** | **Storage** | **Storage** | **Intelligent Edge** | **Intelligent Edge** | **Financial Services** | **Financial Services** | **Corporate Investments** | **Corporate Investments** |
| | **Dollars in millions** | **Dollars in millions** | **Dollars in millions** | **Dollars in millions** | **Dollars in millions** | **Dollars in millions** | **Dollars in millions** | **Dollars in millions** | **Dollars in millions** | **Dollars in millions** | **Dollars in millions** | **Dollars in millions** | **Dollars in millions** | **Dollars in millions** |
| Net revenue<sup>(1)</sup> | $7809 | 7809 | $3456 | 3456 | $1056 | 1056 | $1187 | 1187 | $1127 | 1127 | $873 | 873 | $293 | 293 |
| Year-over-year change % | 12.2 | % | 13.5 | % | 33.7 | % | 5.2 | % | 25.1 | % | 3.7 | % | (9.8) | % |
| Earnings (loss) from operations<sup>(2)</sup> | $591 |  | $609 |  | $1 |  | $142 |  | $247 |  | $82 |  | $(55) |  |
| Earnings (loss) from operations as a % of net revenue | 7.6 | % | 17.6 | % | 0.1 | % | 12.0 | % | 21.9 | % | 9.4 | % | (18.8) | % |
| Year-over-year change percentage points | 1.2 | pts | 3.6 | pts | 1.0 | pts | (1.9) | pts | 4.5 | pts | (3.0) | pts | (15.4) | pts |

---

(1)HPE consolidated net revenue excludes intersegment net revenue.

(2)Segment earnings from operations exclude certain unallocated corporate costs and eliminations, stock-based compensation expense, amortization of initial direct costs, amortization of intangible assets, transformation costs, acquisition, disposition and other related charges, and disaster charges (recovery).

***Compute***

---

| | | | |
|:---|:---|:---|:---|
| | **For the three months ended January 31,** | **For the three months ended January 31,** | **For the three months ended January 31,** |
| | **2023** | **2022** | **% Change** |
| | **Dollars in millions** | **Dollars in millions** | |
| Net revenue | $3456 | $3044 | 13.5% |
| Earnings from operations | $609 | $427 | 42.6% |
| Earnings from operations as a % of net revenue | 17.6% | 14.0% |  |

---

------

<u>[Table of Content](#i2c4659f3642b465bbf905d9dd6ad5f9d_7)</u>

**HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES**

**Management's Discussion and Analysis of**

**Financial Condition and Results of Operations (Continued)**

Compute net revenue increased by $412 million, or 13.5% (increased 19.4% on a constant currency basis) driven by a high order backlog and improvements in the supply chain environment. Leading the increase was higher average unit prices resulting from a combination of increased sales of server configurations with more complex component architectures and disciplined pricing actions. Moderating this increase was unfavorable currency fluctuations and lower unit shipments.

Product revenue growth was driven by the rack server category. Services net revenue declined primarily due to unfavorable currency fluctuations.

Compute earnings from operations as a percentage of net revenue increased 3.6 percentage points due to decreases in costs of products and services as a percentage of net revenue and operating expense as a percentage of net revenue. The decrease in costs of products and services as a percentage of net revenue was primarily due to pricing discipline and strong cost management partially offset by unfavorable currency fluctuations and higher variable compensation. Operating expenses as a percentage of net revenue decreased primarily due to our optimized expense structure partially offset by higher variable compensation expense.

***HPC & AI***

---

| | | | |
|:---|:---|:---|:---|
| | **For the three months ended January 31,** | **For the three months ended January 31,** | **For the three months ended January 31,** |
| | **2023** | **2022** | **% Change** |
| | **Dollars in millions** | **Dollars in millions** | |
| Net revenue | $1056 | $790 | 33.7% |
| Earnings (loss) from operations | $1 | $(7) | (114.3)% |
| Earnings (loss) from operations as a % of net revenue | 0.1% | (0.9)% |  |

---

HPC & AI net revenue increased by $266 million, or 33.7% (increased 37.2% on a constant currency basis) driven by a high order backlog and improvements in the supply environment. Leading the increase was growth in HPC led by the HPE Cray Supercomputing product portfolio, as operational and supply improvements addressed recent challenges with achieving certain customer acceptance milestones for revenue recognition. We also experienced revenue growth in the Data Solutions product category. These increases were moderated by an uneven demand environment in HPE Apollo products, and lower services revenue due primarily to an unfavorable portfolio mix of service offerings and unfavorable currency fluctuations.

HPC & AI earnings from operations as a percentage of net revenue increased 1.0 percentage points due to a decrease in operating expenses as a percentage of net revenue, partially offset by an increase in cost of products and services as a percentage of net revenue. The increase in cost of products and services as a percentage of net revenue was due primarily to lower revenue from higher-margin services and higher variable compensation expense. The decrease in operating expenses as a percentage of net revenue was primarily due to our optimized expense structure moderated by higher variable compensation expense.

***Storage***

---

| | | | |
|:---|:---|:---|:---|
| | **For the three months ended January 31,** | **For the three months ended January 31,** | **For the three months ended January 31,** |
| | **2023** | **2022** | **% Change** |
| | **Dollars in millions** | **Dollars in millions** | |
| Net revenue | $1187 | $1128 | 5.2% |
| Earnings from operations | $142 | $157 | (9.6)% |
| Earnings from operations as a % of net revenue | 12.0% | 13.9% |  |

---

Storage net revenue increased by $59 million or 5.2% (increased 10.5% on a constant currency basis) as improvements in the supply environment were partially offset by unfavorable currency fluctuations. Net revenue increased in Storage products moderated by a net revenue decrease in Storage services. The increase in Storage products was led by higher revenue from HPE Alletra, Hyperconverged and HPE Primera products, partially offset by lower HPE 3PAR revenue, as we transition to next generation product platforms, such as HPE Alletra. The decrease in Storage services was due to lower support services revenue as certain hardware products approach their end-of-life and product transitions.

------

<u>[Table of Content](#i2c4659f3642b465bbf905d9dd6ad5f9d_7)</u>

**HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES**

**Management's Discussion and Analysis of**

**Financial Condition and Results of Operations (Continued)**

Storage earnings from operations as a percentage of net revenue decreased 1.9 percentage points due to increases in cost of products and services as a percentage of net revenue and operating expenses as a percentage of net revenue. The increase in cost of products and services as a percentage of net revenue was due primarily to lower revenue from support services as we continue our transition to more software-rich products, unfavorable currency fluctuations, and higher variable compensation expense. These impacts were partially offset by lower supply chain costs to expedite product delivery and disciplined pricing actions. The increase in operating expenses as a percentage of net revenue was due primarily to higher variable compensation expense.

***Intelligent Edge***

---

| | | | |
|:---|:---|:---|:---|
| | **For the three months ended January 31,** | **For the three months ended January 31,** | **For the three months ended January 31,** |
| | **2023** | **2022** | **% Change** |
| | **Dollars in millions** | **Dollars in millions** | |
| Net revenue | $1127 | $901 | 25.1% |
| Earnings from operations | $247 | $157 | 57.3% |
| Earnings from operations as a % of net revenue | 21.9% | 17.4% |  |

---

Intelligent Edge net revenue increased by $226 million, or 25.1% (increased 31.0% on a constant currency basis) primarily due to strong demand, which was reflected in a high backlog, improved supply chain execution, and disciplined pricing actions. As a result, net revenue increased in both products and services, moderated by unfavorable currency fluctuations. The increase in product revenue was primarily driven by the wireless local area network ("WLAN") and switching businesses, which benefited from improvements in the supply environment while services revenue growth was led by our as-a-service offerings.

Intelligent Edge earnings from operations as a percentage of net revenue increased 4.5 percentage points due primarily to decreases in cost of products and services as a percentage of net revenue and operating expenses as a percentage of net revenue. The decrease in cost of product and services as a percentage of net revenue was primarily due to disciplined cost management and pricing actions, moderated by a lower mix of support services revenue and higher variable compensation expense. Operating expenses as a percentage of net revenue decreased primarily due to our cost containment measures partially offset by higher variable compensation expense.

***Financial Services***

---

| | | | |
|:---|:---|:---|:---|
| | **For the three months ended January 31,** | **For the three months ended January 31,** | **For the three months ended January 31,** |
| | **2023** | **2022** | **% Change** |
| | **Dollars in millions** | **Dollars in millions** | |
| Net revenue | $873 | $842 | 3.7% |
| Earnings from operations | $82 | $104 | (21.2)% |
| Earnings from operations as a % of net revenue | 9.4% | 12.4% |  |

---

FS net revenue increased by $31 million, or 3.7% (increased 8.1% on a constant currency basis) due primarily to higher rental revenue from higher average operating leases and higher asset management revenue from lease buyouts, partially offset by unfavorable currency fluctuations.

FS earnings from operations as a percentage of net revenue decreased 3.0 percentage points due to an increase in cost of services as a percentage of net revenue, while operating expenses as a percentage of net revenue were relatively flat. The increase to cost of services as a percentage of net revenue resulted primarily from a combination of higher borrowing costs and higher depreciation expense.

------

<u>[Table of Content](#i2c4659f3642b465bbf905d9dd6ad5f9d_7)</u>

**HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES**

**Management's Discussion and Analysis of**

**Financial Condition and Results of Operations (Continued)**

*Financing Volume*

---

| | | |
|:---|:---|:---|
| | **For the three months ended January 31,** | **For the three months ended January 31,** |
| | **2023** | **2022** |
| | **In millions** | **In millions** |
| Financing volume | $1600 | $1388 |

---

Financing volume, which represents the amount of financing provided to customers for equipment and related software and services, including intercompany activity, increased by 15.3% due primarily to higher financing of HPE and third-party product sales and services, partially offset by unfavorable currency fluctuations.

*Portfolio Assets and Ratios*

The portfolio assets and ratios derived from the segment balance sheets for FS were as follows:

---

| | | |
|:---|:---|:---|
| | **As of** | **As of** |
| | **January 31, 2023** | **October 31, 2022** |
| | **Dollars in millions** | **Dollars in millions** |
| Financing receivables, gross | $8859 | $8359 |
| Net equipment under operating leases | 4267 | 4103 |
| Capitalized profit on intercompany equipment transactions<sup>(1)</sup> | 259 | 241 |
| Intercompany leases<sup>(1)</sup> | 97 | 97 |
| Gross portfolio assets | 13482 | 12800 |
| Allowance for credit losses<sup>(2)</sup> | 238 | 222 |
| Operating lease equipment reserve | 48 | 44 |
| Total reserves | 286 | 266 |
| Net portfolio assets | $13196 | $12534 |
| Reserve coverage | 2.1% | 2.1% |
| Debt-to-equity ratio<sup>(3)</sup> | 7.0x | 7.0x |

---

(1)Intercompany activity is eliminated in consolidation.

(2)Allowance for credit losses for financing receivables includes both the short- and long-term portions.

(3)Debt benefiting FS consists of intercompany equity that is treated as debt for segment reporting purposes, intercompany debt, and borrowing- and funding-related activity associated with FS and its subsidiaries. Debt benefiting FS totaled $12.1 billion and $11.5 billion at January 31, 2023 and October 31, 2022, respectively, and was determined by applying an assumed debt-to-equity ratio, which management believes to be comparable to that of other similar financing companies. FS equity at January 31, 2023 and October 31, 2022 was $1.7 billion and $1.6 billion, respectively.

As of January 31, 2023 and October 31, 2022, FS net cash and cash equivalents balances were approximately $1.0 billion and $0.9 billion, respectively.

Net portfolio assets as of January 31, 2023 increased 5.3% from October 31, 2022. The increase generally resulted from favorable currency fluctuations, along with new financing volume exceeding portfolio runoff during the period.

FS bad debt expense includes charges to general reserves, specific reserves, and write-offs for sales-type, direct-financing, and operating leases. For the three months ended January 31, 2023 and 2022, FS recorded net bad debt expense of $19 million and $23 million, respectively.

As of January 31, 2023, FS experienced an increase in billed finance receivables compared to October 31, 2022, which included a limited impact to collections from customers in Russia. We are currently unable to fully predict the extent to which our exit from Russia and Belarus businesses may adversely impact future collections of our receivables.

------

<u>[Table of Content](#i2c4659f3642b465bbf905d9dd6ad5f9d_7)</u>

**HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES**

**Management's Discussion and Analysis of**

**Financial Condition and Results of Operations (Continued)**

***Corporate Investments and Other***

---

| | | | |
|:---|:---|:---|:---|
| | **For the three months ended January 31,** | **For the three months ended January 31,** | **For the three months ended January 31,** |
| | **2023** | **2022** | **% Change** |
| | **Dollars in millions** | **Dollars in millions** | |
| Net revenue | $293 | $325 | (9.8)% |
| Loss from operations | $(55) | $(11) | (400.0)% |
| Loss from operations as a % of net revenue | (18.8)% | (3.4)% |  |

---

Corporate Investments and Other net revenue decreased by $32 million, or 9.8% (decreased 1.5% on a constant currency basis) due primarily to unfavorable currency fluctuations.

Corporate Investments and Other loss from operations as a percentage of net revenue increased by 15.4 percentage points due primarily to increases in cost of services as a percentage of net revenue and operating expenses as a percentage of net revenue. The increase in cost of services as a percentage of net revenue was due primarily to the scale of the net revenue decline driven by unfavorable currency fluctuations and higher services delivery costs due to higher variable compensation expense. The increase in operating expenses as a percentage of net revenue was due primarily to higher variable compensation expense.

**CRITICAL ACCOUNTING POLICIES AND ESTIMATES**

Our Condensed Consolidated Financial Statements are prepared in accordance with U.S. Generally Accepted Accounting Principles ("GAAP"), which requires us to make estimates, judgments, and assumptions that affect the reported amounts of assets, liabilities, net revenue, and expenses, and the disclosure of contingent liabilities. An accounting policy is deemed to be critical if the nature of the estimate or assumption it incorporates is subject to a material level of judgment related to matters that are highly uncertain, and changes in those estimates and assumptions are reasonably likely to materially impact our Condensed Consolidated Financial Statements.

Estimates and judgments are based on historical experience, forecasted events, and various other assumptions that we believe to be reasonable under the circumstances. Estimates and judgments may vary under different assumptions or conditions. We evaluate our estimates and judgments on an ongoing basis. Accounting policies that are critical in the portrayal of our financial condition and results of operations and require management's most difficult, subjective, or complex judgements include revenue recognition, taxes on earnings, business combinations, impairment assessment of goodwill and intangible assets, and contingencies.

As of January 31, 2023, there have been no significant changes to our critical accounting estimates since our Annual Report on Form 10-K for the fiscal year ended October 31, 2022.

**LIQUIDITY AND CAPITAL RESOURCES**

*Current Overview*

We use cash generated by operations as our primary source of liquidity. We believe that internally generated cash flows will be generally sufficient to support our operating businesses, capital expenditures, product development initiatives, acquisitions, and disposal activities including legal settlements, restructuring activities, transformation costs, indemnifications, maturing debt, interest payments, and income tax payments, in addition to any future investments, share repurchases, and shareholder dividend payments. We expect to supplement this short-term liquidity, if necessary, by accessing the capital markets, issuing commercial paper, and borrowing under credit facilities made available by various domestic and foreign financial institutions. However, our access to capital markets may be constrained and our cost of borrowing may increase under certain business, market, and economic conditions. We anticipate that the funds made available and cash generated from operations, along with our access to capital markets, will be sufficient to meet our liquidity requirements for at least the next twelve months and for the foreseeable future thereafter. Our liquidity is subject to various risks including the risks identified in the section entitled "Risk Factors" in Item 1A of Part II and market risks identified in the section entitled "Quantitative and Qualitative Disclosures about Market Risk" in Item 3 of Part I.

Our cash balances are held in numerous locations throughout the world, with a substantial amount held outside the U.S. as of January 31, 2023. We utilize a variety of planning and financing strategies in an effort to ensure that our worldwide cash is available when and where it is needed.

------

<u>[Table of Content](#i2c4659f3642b465bbf905d9dd6ad5f9d_7)</u>

**HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES**

**Management's Discussion and Analysis of**

**Financial Condition and Results of Operations (Continued)**

Amounts held outside of the U.S. are generally utilized to support our non-U.S. liquidity needs. Repatriations of amounts held outside the U.S. generally will not be taxable from a U.S. federal tax perspective, but may be subject to state income or foreign withholding tax. Where local restrictions prevent an efficient intercompany transfer of funds, our intent is to keep cash balances outside of the U.S. and to meet liquidity needs through ongoing cash flows, external borrowings, or both. We do not expect restrictions or potential taxes incurred on repatriation of amounts held outside of the U.S. to have a material effect on our overall liquidity, financial condition, or results of operations.

In connection with the share repurchase program previously authorized by our Board of Directors, during the first three months of fiscal 2023, we repurchased and settled an aggregate amount of $73 million. As of January 31, 2023, we had a remaining authorization of $1.3 billion for future share repurchases. For more information on our share repurchase program, refer to the section entitled "Unregistered Sales of Equity Securities and Use of Proceeds" in Item 2 of Part II.&nbsp;&nbsp;&nbsp;&nbsp;

Pursuant to the Shareholders' Agreement among us, Unisplendor International Technology Limited ("UNIS"), and H3C dated as of May 1, 2016, as amended from time to time, and most recently on October 28, 2022, we delivered a notice to UNIS on December 30, 2022, to exercise our right to put to UNIS, for cash consideration, all of the H3C shares held by us, which represent 49% of the total issued share capital of H3C, at a price per share of 15.0 times the last twelve months' post-tax profit of H3C (measured as of the period ending April 30, 2022) divided by the total number of H3C shares outstanding as of December 30, 2022. The determination of the purchase price remains subject to agreement among the parties, taking into account certain adjustments to the post-tax profit of H3C pursuant to the terms of the Shareholders' Agreement and the availability of the necessary information to make such determination. Following a determination of the purchase price and the timing of the receipt of proceeds, we intend to consider a range of allocation activities, in line with our practice of pursuing a balanced, returns-based approach for capital allocation decisions, including but not limited to organic and strategic investments, return of capital to shareholders, repayment and/or redemption of outstanding debt, and general corporate purposes. The disposition is also subject to obtaining required regulatory approvals.

***Liquidity***

Our cash, cash equivalents, restricted cash, total debt, and available borrowing resources were as follows:

---

| | | |
|:---|:---|:---|
| | **As of** | **As of** |
| | **January 31, 2023** | **October 31, 2022** |
| | **In millions** | **In millions** |
| Cash, cash equivalents and restricted cash | $2844 | $4763 |
| Total debt | 12926 | 12465 |
| Available borrowing resources | 5260 | 6161 |
| &nbsp;&nbsp;&nbsp;&nbsp;Commercial paper programs<sup>(1)</sup> | 4311 | 5208 |
| &nbsp;&nbsp;&nbsp;&nbsp;Uncommitted lines of credit | $949 | $953 |

---

(1)&nbsp;&nbsp;&nbsp;&nbsp;The maximum aggregate borrowing amount of the commercial paper programs and revolving credit facility is $5.75 billion.

The following tables represent the way in which management reviews cash flows:

---

| | | |
|:---|:---|:---|
| | **For the three months ended January 31,** | **For the three months ended January 31,** |
| | **2023** | **2022** |
| | **In millions** | **In millions** |
| Net cash used in operating activities | $(829) | $(76) |
| Net cash used in investing activities | (1237) | (335) |
| Net cash provided by financing activities | 9 | 355 |
| Effect of exchange rate changes on cash, cash equivalents, and restricted cash | 138 |  |
| &nbsp;&nbsp;Net decrease in cash, cash equivalents and restricted cash | $(1919) | $(56) |

---

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<u>[Table of Content](#i2c4659f3642b465bbf905d9dd6ad5f9d_7)</u>

**HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES**

**Management's Discussion and Analysis of**

**Financial Condition and Results of Operations (Continued)**

*Operating Activities*

For the three months ended January 31, 2023, net cash used in operating activities increased by $0.8 billion, as compared to the corresponding period in fiscal 2022. The increase was primarily due to unfavorable working capital resulting from higher vendor payments, an increase in financing receivables, moderated by unfavorable hedging positions and the prior-year period containing higher cash payouts for variable compensation.

*Our working capital metrics and cash conversion impacts were as follows:*

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| | **As of** | **As of** | | **As of** | **As of** | | |
| | **January 31, 2023** | **October 31, 2022** |<br>**Change** | **January 31, 2022** | **October 31, 2021** |<br>**Change** |<br>**Y/Y Change** |
| Days of sales outstanding in accounts receivable ("DSO") | 48 | 47 | 1 | 44 | 49 | (5) | 4 |
| Days of supply in inventory ("DOS") | 81 | 88 | (7) | 104 | 82 | 22 | (23) |
| Days of purchases outstanding in accounts payable ("DPO") | (114) | (149) | 35 | (128) | (128) |  | 14 |
| &nbsp;&nbsp;&nbsp;Cash conversion cycle | 15 | (14) | 29 | 20 | 3 | 17 | (5) |

---

The cash conversion cycle is the sum of DSO and DOS less DPO. Items which may cause the cash conversion cycle in a particular period to differ include, but are not limited to, changes in business mix, changes in payment terms (including extended payment terms to customers or from suppliers), early or late invoice payments from customers or to suppliers, the extent of receivables factoring, seasonal trends, the timing of the revenue recognition and inventory purchases within the period, the impact of commodity costs, and acquisition activity.

DSO measures the average number of days our receivables are outstanding. DSO is calculated by dividing ending accounts receivable, net of allowance for doubtful accounts, by a 90-day average of net revenue. Compared to the corresponding three-month period in fiscal 2022, the increase in DSO in the current period was primarily due to unfavorable billings linearity and extended payment terms.

DOS measures the average number of days from procurement to sale of our products. DOS is calculated by dividing ending inventory by a 90-day average of cost of goods sold. Compared to the corresponding three-month period in fiscal 2022, the decrease in DOS in the current period was primarily due to lower levels of inventory resulting from a reduction in our backlog positions, and lower replenishment of materials.

DPO measures the average number of days our accounts payable balances are outstanding. DPO is calculated by dividing ending accounts payable by a 90-day average of cost of goods sold. Compared to the corresponding three-month period in fiscal 2022, the decrease in DPO in the current period was primarily due to higher vendor payments from prior period purchases and lower inventory purchases during the current period.

*Investing Activities*

For the three months ended January 31, 2023, net cash used in investing activities increased by $0.9 billion, as compared to the corresponding period in fiscal 2022. The increase was primarily due to higher cash utilized in net financial collateral activities of $0.8 billion and higher cash utilized for investment in property, plant and equipment, net of sales proceeds of $0.1 billion, as compared to the prior-year period.

*Financing Activities*

For the three months ended January 31, 2023, net cash provided by financing activities decreased by $0.3 billion, as compared to the corresponding period in fiscal 2022. This was primarily due to lower proceeds from debt, net of issuance cost moderated by higher cash from short term borrowings, as compared to the prior-year period.

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<u>[Table of Content](#i2c4659f3642b465bbf905d9dd6ad5f9d_7)</u>

**HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES**

**Management's Discussion and Analysis of**

**Financial Condition and Results of Operations (Continued)**

*Free Cash Flow*

---

| | | |
|:---|:---|:---|
| | **For the three months ended January 31,** | **For the three months ended January 31,** |
| | **2023** | **2022** |
| | **In millions** | **In millions** |
| Net cash used in operating activities | $(829) | $(76) |
| Investment in property, plant and equipment | (794) | (624) |
| Proceeds from sale of property, plant and equipment | 159 | 123 |
| Effect of exchange rate changes on cash, cash equivalents, and restricted cash | 138 |  |
| &nbsp;&nbsp;Free cash flow | $(1326) | $(577) |

---

Free cash flow represents cash flow from operations less net capital expenditures (investments in property, plant and equipment ("PP&E") less proceeds from the sale of PP&E), and adjusted for the effect of exchange rate fluctuations on cash, cash equivalents, and restricted cash. For the three months ended January 31, 2023, free cash flow decreased by $0.7 billion, as compared to the corresponding period in fiscal 2022. The decrease was due to lower cash generated from operations due to unfavorable working capital resulting from higher vendor payments, higher cash utilized for investments in PP&E, net of sales proceeds, moderated by a favorable currency impact on cash, cash equivalents, and restricted cash, as compared to the prior-year period.

For more information on the impact of operating assets and liabilities to our cash flows, see Note 6, "Balance Sheet Details" to the Condensed Consolidated Financial Statements in Item 1 of Part I.

***Capital Resources***

We maintain debt levels that we establish through consideration of several factors, including cash flow expectations, cash requirements for operations, investment plans (including acquisitions), share repurchase activities, our cost of capital, and targeted capital structure. We maintain a revolving credit facility and two commercial paper programs, "the Parent Programs", and a wholly-owned subsidiary maintains a third program. There have been no changes to our commercial paper programs, revolving credit facility and shelf registration statement since October 31, 2022. For further information on our capital resources, see Note 11, "Borrowings" to the Condensed Consolidated Financial Statements in Item 1 of Part I.

As of January 31, 2023 and October 31, 2021, no borrowings were outstanding under our $4.75 billion revolving credit facility.

As of January 31, 2023, $759 million was outstanding under the Parent Programs. As of October 31, 2022, no borrowings were outstanding under the Parent Programs. As of January 31, 2023 and October 31, 2022, $680 million and $542 million, respectively, were outstanding under our subsidiary's program. During the first three months of fiscal 2023, we issued $1.9 billion and repaid $1.1 billion of commercial paper.

***Cash Requirements and Commitments***

*Contractual Obligations*

Our contractual obligations have not changed materially outside of the normal course of business since October 31, 2022. For further information see "Cash Requirements and Commitments" in Item 7 of Part II of our Annual Report on Form 10-K for the fiscal year ended October 31, 2022.

*Retirement Benefit Plan Funding*

For the remainder of fiscal 2023, we anticipate making contributions of approximately $122 million to our non-U.S. pension plans. Our policy is to fund our pension plans so that we meet at least the minimum contribution requirements, as established by various authorities including local government and tax authorities.

------

<u>[Table of Content](#i2c4659f3642b465bbf905d9dd6ad5f9d_7)</u>

**HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES**

**Management's Discussion and Analysis of**

**Financial Condition and Results of Operations (Continued)**

*Restructuring Plans*

As of January 31, 2023, we expect to make future cash payments of approximately $420 million in connection with our approved restructuring plans, which includes $280 million expected to be paid through the remainder of fiscal 2023 and $140 million expected to be paid thereafter. For more information on our restructuring activities, see Note 3, "Transformation Programs" to the Condensed Consolidated Financial Statements in Item 1 of Part I.

*Uncertain Tax Positions* 

As of January 31, 2023, we had approximately $320 million of recorded liabilities and related interest and penalties pertaining to uncertain tax positions. These liabilities and related interest and penalties include $36 million expected to be paid within one year. For the remaining amount, we are unable to make a reasonable estimate as to when cash settlement with the tax authorities might occur due to the uncertainties related to these tax matters. Payments of these obligations would result from settlements with taxing authorities. For more information on our uncertain tax positions, see Note 5, "Taxes on Earnings" to the Condensed Consolidated Financial Statements in Item 1 of Part I.

*Off-Balance Sheet Arrangements*

As part of our ongoing business, we have not participated in transactions that generate material relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.

We have third-party revolving short-term financing arrangements intended to facilitate the working capital requirements of certain customers. For more information on our third-party revolving short-term financing arrangements, see Note 6, "Balance Sheet Details", to the Condensed Consolidated Financial Statements in Item 1 of Part I.

**GAAP to non-GAAP Reconciliations**

The following tables provide a reconciliation of each non-GAAP financial measure to the most directly comparable GAAP financial measure for the periods presented:

***Reconciliation of GAAP gross profit and gross profit margin to non-GAAP gross profit and gross profit margin.***

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **For the three months ended January 31,** | **For the three months ended January 31,** | **For the three months ended January 31,** | **For the three months ended January 31,** |
| | **2023** | **2023** | **2022** | **2022** |
| | **Dollars** | **% of<br>Revenue** | **Dollars** | **% of<br>Revenue** |
| | **Dollars in millions** | **Dollars in millions** | **Dollars in millions** | **Dollars in millions** |
| GAAP Net revenue | $7809 | 100% | $6961 | 100% |
| GAAP Cost of sales | 5151 | 66.0% | 4617 | 66.3% |
| GAAP Gross profit | 2658 | 34.0% | 2344 | 33.7% |
| Non-GAAP adjustments |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Amortization of initial direct costs |  | —% | 1 | —% |
| &nbsp;&nbsp;&nbsp;&nbsp;Stock-based compensation expense | 16 | 0.2% | 15 | 0.2% |
| Non-GAAP Gross Profit | $2674 | 34.2% | $2360 | 33.9% |

---

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<u>[Table of Content](#i2c4659f3642b465bbf905d9dd6ad5f9d_7)</u>

**HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES**

**Management's Discussion and Analysis of**

**Financial Condition and Results of Operations (Continued)**

***Reconciliation of GAAP earnings from operations and operating profit margin to non-GAAP earnings from operations and operating profit margin.***

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **For the three months ended January 31,** | **For the three months ended January 31,** | **For the three months ended January 31,** | **For the three months ended January 31,** |
| | **2023** | **2023** | **2022** | **2022** |
| | **Dollars** | **% of<br>Revenue** | **Dollars** | **% of<br>Revenue** |
| | **Dollars in millions** | **Dollars in millions** | **Dollars in millions** | **Dollars in millions** |
| GAAP earnings from operations | $591 | 7.6% | $448 | 6.4% |
| Non-GAAP adjustments: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Amortization of initial direct costs |  | —% | 1 | —% |
| &nbsp;&nbsp;&nbsp;&nbsp;Amortization of intangible assets | 73 | 0.9% | 73 | 1.0% |
| &nbsp;&nbsp;&nbsp;&nbsp;Transformation costs | 102 | 1.3% | 111 | 1.6% |
| &nbsp;&nbsp;&nbsp;&nbsp;Disaster charges (recovery) | 1 | —% | (1) | —% |
| &nbsp;&nbsp;&nbsp;&nbsp;Stock-based compensation expense | 140 | 1.8% | 128 | 1.8% |
| &nbsp;&nbsp;&nbsp;&nbsp;Acquisition, disposition and other related charges | 11 | 0.2% | 8 | 0.2% |
| Non-GAAP earnings from operations | $918 | 11.8% | $768 | 11.0% |

---

***Reconciliation of GAAP net earnings and diluted net earnings per share to non-GAAP net earnings and diluted net earnings per share.***

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **For the three months ended January 31,** | **For the three months ended January 31,** | **For the three months ended January 31,** | **For the three months ended January 31,** |
| | **2023** | **2023** | **2022** | **2022** |
| | **Dollars** | **Diluted net earnings per share** | **Dollars** | **Diluted net earnings per share** |
| | **Dollars in millions** | **Dollars in millions** | **Dollars in millions** | **Dollars in millions** |
| GAAP net earnings | $501 | $0.38 | $513 | $0.39 |
| Non-GAAP adjustments: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Amortization of initial direct costs |  |  | 1 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Amortization of intangible assets | 73 | 0.06 | 73 | 0.06 |
| &nbsp;&nbsp;&nbsp;&nbsp;Transformation costs | 102 | 0.07 | 111 | 0.08 |
| &nbsp;&nbsp;&nbsp;&nbsp;Disaster charges (recovery) | 1 |  | (1) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Stock-based compensation expense | 140 | 0.11 | 128 | 0.10 |
| &nbsp;&nbsp;&nbsp;&nbsp;Acquisition, disposition and other related charges | 11 | 0.01 | 8 | 0.01 |
| &nbsp;&nbsp;&nbsp;&nbsp;Tax indemnification and related adjustments | 1 |  | 17 | 0.01 |
| &nbsp;&nbsp;&nbsp;&nbsp;Non-service net periodic benefit credit |  |  | (36) | (0.03) |
| &nbsp;&nbsp;&nbsp;&nbsp;Earnings from equity interests<sup>(1)</sup> | 12 | 0.01 | 17 | 0.01 |
| &nbsp;&nbsp;&nbsp;&nbsp;Adjustments for taxes | (13) | (0.01) | (134) | (0.10) |
| Non-GAAP net earnings | $828 | $0.63 | $697 | $0.53 |

---

(1)&nbsp;&nbsp;&nbsp;&nbsp;Represents the amortization of basis difference adjustments related to H3C. The three months ended January 31, 2023 includes the Company's portion of intangible asset impairment charges from H3C of $8 million.

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<u>[Table of Content](#i2c4659f3642b465bbf905d9dd6ad5f9d_7)</u>

**HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES**

**Management's Discussion and Analysis of**

**Financial Condition and Results of Operations (Continued)**

***Reconciliation of net cash used in operating activities to free cash flow.***

---

| | | |
|:---|:---|:---|
| | **For the three months ended January 31,** | **For the three months ended January 31,** |
| | **2023** | **2022** |
| | **In millions** | **In millions** |
| Net cash used in operating activities | $(829) | $(76) |
| &nbsp;&nbsp;&nbsp;&nbsp;Investment in property, plant and equipment | (794) | (624) |
| &nbsp;&nbsp;&nbsp;&nbsp;Proceeds from sale of property, plant and equipment | 159 | 123 |
| &nbsp;&nbsp;&nbsp;&nbsp;Effect of exchange rate changes on cash, cash equivalents, and restricted cash | 138 |  |
| Free cash flow | $(1326) | $(577) |

---

*Non-GAAP financial measures*

The non-GAAP financial measures presented are net revenue on a constant currency basis, non-GAAP gross profit, non-GAAP gross profit margin, non-GAAP earnings from operations, non-GAAP operating profit margin (non-GAAP earnings from operations as a percentage of net revenue), non-GAAP net earnings, non-GAAP diluted net earnings per share, and free cash flow. These non-GAAP financial measures are used by management for purposes of evaluating our historical and prospective financial performance, as well as evaluating our performance relative to our competitors. 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 net revenue on a constant currency basis is net revenue. The GAAP measure most directly comparable to non-GAAP gross profit is gross profit. The GAAP measure most directly comparable to non-GAAP gross profit margin is gross profit margin. The GAAP measure most directly comparable to non-GAAP earnings from operations is earnings from operations. The GAAP measure most directly comparable to non-GAAP operating profit margin (non-GAAP earnings from operations as a percentage of net revenue) is operating profit margin (earnings from operations as a percentage of net revenue). 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 free cash flow is cash flow from operations.

Net revenue on a constant currency basis assumes no change in the foreign exchange rate from the prior-year period. Non-GAAP gross profit and non-GAAP gross profit margin are defined to exclude charges related to the amortization of initial direct costs, and stock-based compensation expense. Non-GAAP earnings from operations and non-GAAP operating profit margin (non-GAAP earnings from operations as a percentage of net revenue) consist of earnings from operations excluding any charges related to the amortization of initial direct costs, amortization of intangible assets, transformation costs, stock-based compensation expense, disaster charges (recovery), and acquisition, disposition and other related 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, as well as items such as tax indemnification and related adjustments, non-service net periodic benefit credit, earnings from equity interests, and adjustments for taxes. The Adjustments for taxes line item includes certain income tax valuation allowances and separation taxes, the impact of tax reform, structural rate adjustment, excess tax benefit from stock-based compensation, and adjustments for additional taxes or tax benefits associated with each non-GAAP item. We believe that excluding the items mentioned above from these non-GAAP financial measures allows management to better understand our consolidated financial performance in relation to the operating results of our segments. Management does not believe that the excluded items are reflective of ongoing operating results, and excluding them facilitates a more meaningful evaluation of our current operating performance in comparison to our peers. The excluded items can be inconsistent in amount and frequency and/or not reflective of the operational performance of the business.

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 our results as reported under GAAP. Some of the limitations in relying on these non-GAAP financial measures are that they can have a material impact on the equivalent GAAP earnings measures and cash flows, they may be calculated differently by other companies and may not reflect the full economic effect of the loss in value of certain assets.

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<u>[Table of Content](#i2c4659f3642b465bbf905d9dd6ad5f9d_7)</u>

**HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES**

**Management's Discussion and Analysis of**

**Financial Condition and Results of Operations (Continued)**

We compensate for these limitations on the use of non-GAAP financial measures by relying primarily on our GAAP results and using non-GAAP financial measures only as a supplement. We also provide a reconciliation of each non-GAAP financial measure to its most directly comparable GAAP measure. We believe that providing net revenue on a constant currency basis, non-GAAP gross profit, non-GAAP gross profit margin, non-GAAP earnings from operations, non-GAAP operating profit margin, non-GAAP net earnings, non-GAAP diluted net earnings per share, and free cash flow, in addition to the related GAAP measures provides greater transparency to the information used in our financial and operational decision making and allows the reader of our Condensed Consolidated Financial Statements to see our financial results "through the eyes" of management.

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**<u>[**Table of Contents**](#i2c4659f3642b465bbf905d9dd6ad5f9d_7)</u>**

**Item 3.&nbsp;&nbsp;&nbsp;&nbsp;Quantitative and Qualitative Disclosures About Market Risk.**

For quantitative and qualitative disclosures about market risk affecting HPE, see "Quantitative and Qualitative Disclosures About Market Risk" in Item 7A of Part II of our Annual Report on Form 10-K for the fiscal year ended October 31, 2022. There have been no material changes in our market risk exposures since October 31, 2022.

**Item 4.&nbsp;&nbsp;&nbsp;&nbsp;Controls and Procedures.**

*Evaluation of Disclosure Controls and Procedures*

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act as of the end of the period covered by this report (the "Evaluation Date"). Based on this evaluation, our principal executive officer and principal financial officer concluded as of the Evaluation Date that our disclosure controls and procedures were effective such that the information related to the Company, including our consolidated subsidiaries, required to be disclosed in our SEC reports (i) is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and (ii) is accumulated and communicated to the Company's management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

*Changes in Internal Control Over Financial Reporting*

There were no changes to our internal control over financial reporting during the quarter ended January 31, 2023, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

**PART II. OTHER INFORMATION**

**Item 1. Legal Proceedings.**

Information with respect to this item may be found in Note 14, "Litigation, Contingencies, and Commitments".

**Item 1A. Risk Factors.** 

Our operations and financial results are subject to various risks and uncertainties, including those described in Part I, Item 1A, "Risk Factors" in our Annual Report on Form 10-K for the fiscal period ended October 31, 2022, which could adversely affect our business, financial condition, results of operations, cash flows, and the trading price of our common stock.

**Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.**

**Recent Sales of Unregistered Securities**

There were no unregistered sales of equity securities during the period covered by this report.

**Issuer Purchases of Equity Securities**

---

| | | | | |
|:---|:---|:---|:---|:---|
| **<u>Period</u>** | **Total Number<br>of Shares<br>Purchased and Settled** | **Average<br>Price Paid<br>per Share** | **Total Number of<br>Shares Purchased and Settled as<br>Part of Publicly<br>Announced Plans<br>or Programs** | **Approximate Dollar Value of<br>Shares that May Yet Be<br>Purchased under the Plans<br>or Programs** |
| | **In thousands, except per share amounts** | **In thousands, except per share amounts** | **In thousands, except per share amounts** | **In thousands, except per share amounts** |
| Month 1 (November 2022) | 2084 | $14.88 | 2084 | $1354003 |
| Month 2 (December 2022) | 1432 | 15.92 | 1432 | 1331214 |
| Month 3 (January 2023) | 1162 | 16.25 | 1162 | $1312338 |
| Total | 4678 | $15.54 | 4678 |  |

---

As of January 31, 2023, the Company had a remaining authorization of $1.3 billion for future share repurchases.

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**<u>[**Table of Contents**](#i2c4659f3642b465bbf905d9dd6ad5f9d_7)</u>**

**Item 5. Other Information.**

The following disclosure is being made under Section 13(r) of the Exchange Act:

On March 2, 2021, the U.S. Secretary of State designated the Russian Federal Security Service ("FSB") as a party subject to the provisions of U.S. Executive Order No. 13382 issued in 2005 ("Executive Order 13382"). On the same day, the U.S. Department of the Treasury's Office of Foreign Assets Control ("OFAC") updated General License 1B ("General License 1B") which generally authorizes U.S. companies to engage in certain licensing, permitting, certification, notification, and related transactions with the FSB as may be required for the importation, distribution, or use of information technology products in the Russian Federation. Our local subsidiary may be required to engage with the FSB as a licensing authority and to file documents. There are no gross revenues or net profits directly associated with any such dealings by HPE with the FSB and all such dealings are explicitly authorized by General License 1B. We plan to continue these activities as required to support our orderly and managed wind down of our Russia operations.

For a summary of our revenue recognition policies, see "Revenue Recognition" described in Note 1, "Overview and Summary of Significant Accounting Policies" to the Consolidated Financial Statements in Item 8 of Part II of our Annual Report on Form 10-K for the fiscal year ended October 31, 2022.

**Item 6. Exhibits.** 

The Exhibit Index beginning on page <u>[55](#i2c4659f3642b465bbf905d9dd6ad5f9d_160)</u> of this report sets forth a list of exhibits.

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**<u>[**Table of Contents**](#i2c4659f3642b465bbf905d9dd6ad5f9d_7)</u>**

**HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES**

**EXHIBIT INDEX**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | | **Incorporated by Reference** | **Incorporated by Reference** | **Incorporated by Reference** | **Incorporated by Reference** |
|<br>**Exhibit<br>Number** |<br>**Exhibit Description** | **Form** | **File No.** | **Exhibit(s)** | **Filing Date** |
| 2.1 | <u>[Separation and Distribution Agreement, dated as of October 31, 2015, by and among Hewlett-Packard Company, Hewlett Packard Enterprise Company and the Other Parties Thereto](http://www.sec.gov/Archives/edgar/data/1645590/000119312515368376/d98001dex21.htm)</u> | 8-K | 001-37483 | 2.1 | November 5, 2015 |
| 2.2 | <u>[Transition Services Agreement, dated as of November 1, 2015, by and between Hewlett-Packard Company and Hewlett Packard Enterprise Company](http://www.sec.gov/Archives/edgar/data/1645590/000119312515368376/d98001dex22.htm)</u> | 8-K | 001-37483 | 2.2 | November 5, 2015 |
| 2.3 | <u>[Employee Matters Agreement, dated as of October 31, 2015, by and between Hewlett-Packard Company and Hewlett Packard Enterprise Company](http://www.sec.gov/Archives/edgar/data/1645590/000119312515368376/d98001dex24.htm)</u> | 8-K | 001-37483 | 2.4 | November 5, 2015 |
| 2.4 | <u>[Real Estate Matters Agreement, dated as of October 31, 2015, by and between Hewlett-Packard Company and Hewlett Packard Enterprise Company](http://www.sec.gov/Archives/edgar/data/1645590/000119312515368376/d98001dex25.htm)</u> | 8-K | 001-37483 | 2.5 | November 5, 2015 |
| 2.5 | <u>[Master Commercial Agreement, dated as of November 1, 2015, by and between Hewlett-Packard Company and Hewlett Packard Enterprise Company](http://www.sec.gov/Archives/edgar/data/1645590/000119312515368376/d98001dex26.htm)</u> | 8-K | 001-37483 | 2.6 | November 5, 2015 |
| 2.6 | <u>[Information Technology Service Agreement, dated as of November 1, 2015, by and between Hewlett-Packard Company and HP Enterprise Services, LLC](http://www.sec.gov/Archives/edgar/data/1645590/000119312515368376/d98001dex27.htm)</u> | 8-K | 001-37483 | 2.7 | November 5, 2015 |
| 2.7 | <u>[Agreement and Plan of Merger, dated as of May 24, 2016, by and among Hewlett Packard Enterprise Company, Everett SpinCo, Inc., Computer Sciences Corporation, and Everett Merger Sub, Inc.](http://www.sec.gov/Archives/edgar/data/1645590/000110465916123518/a16-12150_2ex2d1.htm)</u> | 8-K | 001-37483 | 2.1 | May 26, 2016 |
| 2.8 | <u>[Separation and Distribution Agreement, dated as of May 24, 2016, by and between Hewlett Packard Enterprise Company and Everett SpinCo, Inc.](http://www.sec.gov/Archives/edgar/data/1645590/000110465916123518/a16-12150_2ex2d2.htm)</u> | 8-K | 001-37483 | 2.2 | May 26, 2016 |
| 2.9 | <u>[Agreement and Plan of Merger, dated as of September 7, 2016, by and among Hewlett Packard Enterprise Company, Seattle SpinCo, Inc., Micro Focus International plc, Seattle Holdings, Inc. and Seattle MergerSub, Inc.](http://www.sec.gov/Archives/edgar/data/1645590/000119312516703457/d251902dex21.htm)</u> | 8-K | 001-37483 | 2.1 | September 7, 2016 |
| 2.10 | <u>[Separation and Distribution Agreement, dated as of September 7, 2016, by and between Hewlett Packard Enterprise Company and Seattle SpinCo, Inc.](http://www.sec.gov/Archives/edgar/data/1645590/000119312516703457/d251902dex22.htm)</u> | 8-K | 001-37483 | 2.2 | September 7, 2016 |
| 2.11 | <u>[Employee Matters Agreement, dated as of September 7, 2016, by and between Hewlett Packard Enterprise Company, Seattle SpinCo, Inc. and Micro Focus International plc](http://www.sec.gov/Archives/edgar/data/1645590/000119312516703457/d251902dex23.htm)</u> | 8-K | 001-37483 | 2.3 | September 7, 2016 |
| 2.12 | <u>[First Amendment to the Agreement and Plan of Merger, dated as of November 2, 2016, by and among Hewlett Packard Enterprise Company, Everett SpinCo, Inc., New Everett Merger Sub Inc., Computer Sciences Corporation, and Everett Merger Sub, Inc.](http://www.sec.gov/Archives/edgar/data/1645590/000110465916154181/a16-20762_1ex2d1.htm)</u> | 8-K | 001-37483 | 2.1 | November 2, 2016 |
| 2.13 | <u>[First Amendment to the Separation and Distribution Agreement, dated as of November 2, 2016, by and between Hewlett Packard Enterprise Company and Everett SpinCo, Inc.](http://www.sec.gov/Archives/edgar/data/1645590/000110465916154181/a16-20762_1ex2d2.htm)</u> | 8-K | 001-37483 | 2.2 | November 2, 2016 |
| 2.14 | <u>[Agreement and Plan of Merger, dated as of March 6, 2017, by and among Hewlett Packard Enterprise Company, Nebraska Merger Sub, Inc., and Nimble Storage, Inc.](http://www.sec.gov/Archives/edgar/data/1645590/000119312517072462/d351864dex991.htm)</u> | 8-K | 001-37483 | 99.1 | March 7, 2017 |
| 2.15 | <u>[Tender and Support Agreement, dated as of March 6, 2017, by and among Hewlett Packard Enterprise Company, Nebraska Merger Sub, Inc. and each of the persons set forth on Schedule A thereto](http://www.sec.gov/Archives/edgar/data/1645590/000119312517072462/d351864dex992.htm)</u> | 8-K | 001-37483 | 99.2 | March 7, 2017 |

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2.16 <u>[Employee Matters Agreement, dated March 31, 2017, by and between Hewlett Packard Enterprise Company, Everett SpinCo, Inc., and Computer Sciences Corporation,](http://www.sec.gov/Archives/edgar/data/1688568/000119312517112036/d250548dex21.htm)</u> 8-K 001-38033 2.1 April 6, 2017

2.17 <u>[Tax Matters Agreement, dated March 31, 2017, by and among Hewlett Packard Enterprise Company, Everett SpinCo, Inc., and Computer Sciences Corporation](http://www.sec.gov/Archives/edgar/data/1688568/000119312517112036/d250548dex22.htm)</u> 8-K 001-38033 2.2 April 6, 2017

2.18 <u>[IP Matters Agreement, dated March 31, 2017, by and between Hewlett Packard Enterprise Company, Hewlett Packard Enterprise Development LP, and Everett SpinCo, Inc.](http://www.sec.gov/Archives/edgar/data/1688568/000119312517112036/d250548dex23.htm)</u> 8-K 001-38033 2.3 April 6, 2017

2.19 <u>[Transition Services Agreement, dated March 31, 2017, by and between Hewlett Packard Enterprise Company and Everett SpinCo, Inc.](http://www.sec.gov/Archives/edgar/data/1688568/000119312517112036/d250548dex24.htm)</u> 8-K 001-38033 2.4 April 6, 2017

2.20 <u>[Real Estate Matters Agreement, dated March 31, 2017, by and between Hewlett Packard Enterprise Company and Everett SpinCo, Inc.](http://www.sec.gov/Archives/edgar/data/1688568/000119312517112036/d250548dex25.htm)</u> 8-K 001-38033 2.5 April 6, 2017

2.21 <u>[Fourth Amendment to the Separation and Distribution Agreement, dated March 31, 2017, by and between Hewlett Packard Enterprise Company and Everett SpinCo, Inc.](http://www.sec.gov/Archives/edgar/data/1688568/000119312517112036/d250548dex26.htm)</u> 8-K 001-38033 2.6 April 6, 2017

2.22 <u>[Tax Matters Agreement, dated September 1, 2017, by and among Hewlett Packard Enterprise Company, Seattle SpinCo, Inc., and Micro Focus International plc](http://www.sec.gov/Archives/edgar/data/1645590/000156761917001826/s001851x1_ex2-1.htm)</u> 8-K 001-37483 2.1 September 1, 2017

2.23 <u>[Intellectual Property Matters Agreement, dated September 1, 2017, by and between Hewlett Packard Enterprise Company, Hewlett Packard Enterprise Development LP, and Seattle SpinCo, Inc.](http://www.sec.gov/Archives/edgar/data/1645590/000156761917001826/s001851x1_ex2-2.htm)</u> 8-K 001-37483 2.2 September 1, 2017

2.24 <u>[Transition Services Agreement, dated September 1, 2017, by and between Hewlett Packard Enterprise Company and Seattle SpinCo, Inc.](http://www.sec.gov/Archives/edgar/data/1645590/000156761917001826/s001851x1_ex2-3.htm)</u> 8-K 001-37483 2.3 September 1, 2017

2.25 <u>[Real Estate Matters Agreement, dated September 1, 2017, by and between Hewlett Packard Enterprise Company and Seattle SpinCo, Inc.](http://www.sec.gov/Archives/edgar/data/1645590/000156761917001826/s001851x1_ex2-4.htm)</u> 8-K 001-37483 2.4 September 1, 2017

2.26 <u>[Agreement and Plan of Merger, dated as of May 16, 2019, by and among Hewlett Packard Enterprise Company, Canopy Merger Sub, Inc., and Cray Inc.](http://www.sec.gov/Archives/edgar/data/1645590/000110465919030135/a19-10089_1ex2d1.htm)</u> 8-K 001-37483 2.1 May 17, 2019

2.27 <u>[Agreement and Plan of Merger, dated as of July 11, 2020, by and among Hewlett Packard Enterprise Company, Santorini Merger Sub, Inc., Silver Peak Systems, Inc., and certain other parties thereto](http://www.sec.gov/Archives/edgar/data/1645590/000164559020000032/exh21mergeragreement.htm)</u> 8-K 001-37483 2.1 July 13, 2020

3.1 <u>[Registrant's Amended and Restated Certificate of Incorporation](http://www.sec.gov/Archives/edgar/data/1645590/000119312515368376/d98001dex31.htm)</u> 8-K 001-37483 3.1 November 5, 2015

3.2 <u>[Registrant's Amended and Restated Bylaws effective October 31, 2015](http://www.sec.gov/Archives/edgar/data/1645590/000119312515368376/d98001dex32.htm)</u> 8-K 001-37483 3.2 November 5, 2015

3.3 <u>[Certificate of Designation of Series A Junior Participating Redeemable Preferred Stock of Hewlett Packard Enterprise Company](http://www.sec.gov/Archives/edgar/data/1645590/000162828017002714/ex31-3172017x8k.htm)</u> 8-K 001-37483 3.1 March 20, 2017

3.4 <u>[Certificate of Designation of Series B Junior Participating Redeemable Preferred Stock of Hewlett Packard Enterprise Company](http://www.sec.gov/Archives/edgar/data/1645590/000162828017002714/ex32-3172017x8k.htm)</u> 8-K 001-37483 3.2 March 20, 2017

4.1 <u>[Indenture, dated as of October 9, 2015, between Hewlett Packard Enterprise Company and The Bank of New York Mellon Trust Company, N.A., as Trustee](http://www.sec.gov/Archives/edgar/data/1645590/000119312515341954/d31058dex41.htm)</u> 8-K 001-37483 4.1 October 13, 2015

4.2 <u>[Fifth Supplemental Indenture, dated as of October 9, 2015, between Hewlett Packard Enterprise Company and The Bank of New York Mellon Trust Company, N.A., as Trustee, relating to Hewlett Packard Enterprise Company's 4.900% notes due 2025](http://www.sec.gov/Archives/edgar/data/1645590/000119312515341954/d31058dex46.htm)</u> 8-K 001-37483 4.6 October 13, 2015

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4.3 <u>[Sixth Supplemental Indenture, dated as of October 9, 2015, between Hewlett Packard Enterprise Company and The Bank of New York Mellon Trust Company, N.A., as Trustee, relating to Hewlett Packard Enterprise Company's 6.200% notes due 2035](http://www.sec.gov/Archives/edgar/data/1645590/000119312515341954/d31058dex47.htm)</u> 8-K 001-37483 4.7 October 13, 2015

4.4 <u>[Seventh Supplemental Indenture, dated as of October 9, 2015, between Hewlett Packard Enterprise Company and The Bank of New York Mellon Trust Company, N.A., as Trustee, relating to Hewlett Packard Enterprise Company's 6.350% notes due 2045](http://www.sec.gov/Archives/edgar/data/1645590/000119312515341954/d31058dex48.htm)</u> 8-K 001-37483 4.8 October 13, 2015

4.5 <u>[Thirteenth Supplemental Indenture, dated as of September 13, 2019, between Hewlett Packard Enterprise Company and The Bank of New York Mellon Trust Company, N.A., as Trustee, relating to Hewlett Packard Enterprise Company's 2.250% notes due 2023](http://www.sec.gov/Archives/edgar/data/1645590/000119312519244872/d821321dex42.htm)</u> 8-K 001-37483 4.2 September 13, 2019

4.6 <u>[Fifteenth Supplemental Indenture, dated as of April 9, 2020, between Hewlett Packard Enterprise Company and The Bank of New York Mellon Trust Company, N.A., as Trustee, relating to Hewlett Packard Enterprise Company's 4.450% notes due 2023](http://www.sec.gov/Archives/edgar/data/1645590/000119312520102623/d914555dex42.htm)</u> 8-K 001-37483 4.2 April 9, 2020

4.7 <u>[Seventeenth Supplemental Indenture, dated as of July 17, 2020, between Hewlett Packard Enterprise Company and The Bank of New York Mellon Trust Company, N.A., as Trustee, relating to Hewlett Packard Enterprise Company's 1.450% notes due 2024](http://www.sec.gov/Archives/edgar/data/1645590/000114036120016321/nt10013377x6_ex4-2.htm)</u> 8-K 001-37483 4.2 July 17, 2020

4.8 <u>[Eighteenth Supplemental Indenture, dated as of July 17, 2020, between Hewlett Packard Enterprise Company and The Bank of New York Mellon Trust Company, N.A., as Trustee, relating to Hewlett Packard Enterprise Company's 1.750% notes due 2026](http://www.sec.gov/Archives/edgar/data/1645590/000114036120016321/nt10013377x6_ex4-3.htm)</u> 8-K 001-37483 4.3 July 17, 2020

4.9 <u>[Registration Rights Agreement, dated as of October 9, 2015, by and among Hewlett Packard Enterprise Company, Hewlett-Packard Company, and the representatives of the initial purchasers of the Notes](http://www.sec.gov/Archives/edgar/data/1645590/000119312515341954/d31058dex412.htm)</u> 8-K 001-37483 4.12 October 13, 2015

4.10 <u>[Form of Subordinated Indenture between Hewlett Packard Enterprise Company and The Bank of New York Mellon Trust Company, N.A., as Trustee](http://www.sec.gov/Archives/edgar/data/1645590/000164559017000010/a45hpe-subordinatedindentu.htm)</u> S-3ASR 333-222102 4.5 December 15, 2017

4.11 <u>[Description of the Registrant's Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934](http://www.sec.gov/Archives/edgar/data/1645590/000164559020000056/ex-416x10312020ng.htm)</u> 10-K 001-37483 4.16 December 10, 2020

10.1 <u>[Hewlett Packard Enterprise Company 2015 Stock Incentive Plan (amended and restated January 25, 2017)\*](http://www.sec.gov/Archives/edgar/data/1645590/000162828017000624/ex101-hpex2015xstockincent.htm)</u> 8-K 001-37483 10.1 January 30, 2017

10.2 <u>[Hewlett Packard Enterprise Company 2021 Stock Incentive Plan\*](https://www.sec.gov/Archives/edgar/data/1645590/000164559021000028/ex-44x2021stockincentivepl.htm)</u> S-8 333-255839 4.4 May 6, 2021

10.3 <u>[Amendment No. 1 to the Hewlett Packard Enterprise Company 2021 Stock Incentive Plan\*](https://www.sec.gov/Archives/edgar/data/1645590/000164559022000029/ex-47xhpe2021stockincentiv.htm)</u> S-8 333-265378 4.7 June 2, 2022

10.4 <u>[Hewlett Packard Enterprise Severance and Long-Term Incentive Change in Control Plan for Executive Officers\*](http://www.sec.gov/Archives/edgar/data/1645590/000119312515330987/d944600dex104.htm)</u> 10-12B/A 001-37483 10.4 September 28, 2015

10.5 <u>[Hewlett Packard Enterprise Grandfathered Executive Deferred Compensation Plan\*](http://www.sec.gov/Archives/edgar/data/1645590/000004721715000053/edcpex4-4_102-15.htm)</u> S-8 333-207679 4.4 October 30, 2015

10.6 <u>[Form of Non-Qualified Stock Option Grant Agreement\*](http://www.sec.gov/Archives/edgar/data/1645590/000119312515368376/d98001dex104.htm)</u> 8-K 001-37483 10.4 November 5, 2015

10.7 <u>[Form of Performance-Contingent Non-Qualified Stock Option Grant Agreement\*](http://www.sec.gov/Archives/edgar/data/1645590/000119312515368376/d98001dex108.htm)</u> 8-K 001-37483 10.8 November 5, 2015

10.8 <u>[Form of Non-Employee Director Restricted Stock Units Grant Agreement\*](http://www.sec.gov/Archives/edgar/data/1645590/000119312515368376/d98001dex1010.htm)</u> 8-K 001-37483 10.10 November 5, 2015

10.9 <u>[Form of Performance-Adjusted Restricted Stock Units Grant Agreement, as amended and restated effective January 1, 2016\*](http://www.sec.gov/Archives/edgar/data/1645590/000104746916010994/a2227444zex-10_15.htm)</u> 10-Q 001-37483 10.15 March 10, 2016

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10.10 <u>[Description of Amendment to Equity Awards (incorporated by reference to Item 5.02 of the 8-K filed on May 26, 2016)\*](http://www.sec.gov/Archives/edgar/data/1645590/000110465916123518/a16-12150_28k.htm)</u> 8-K 001-37483 10.1 May 26, 2016

10.11 <u>[Niara, Inc. 2013 Equity Incentive Plan\*](http://www.sec.gov/Archives/edgar/data/1645590/000162828017002217/ex43-niaraxequityincentive.htm)</u> S-8 333-216481 4.3 March 6, 2017

10.12 <u>[Nimble Storage, Inc. 2008 Equity Incentive Plan, as amended\*](http://www.sec.gov/Archives/edgar/data/1645590/000119312517126402/d370445dex43.htm)</u> S-8 333-217349 4.3 April 18, 2017

10.13 <u>[SimpliVity Corporation 2009 Stock Plan\*](http://www.sec.gov/Archives/edgar/data/1645590/000162828017004233/ex43-simplivt09stockplan.htm)</u> S-8 333-217438 4.3 April 24, 2017

10.14 <u>[Silicon Graphics International Corp. 2005 Equity Incentive Plan, as amended\*](http://www.sec.gov/Archives/edgar/data/1316625/000131662512000041/fy1210-kexhibit1032005equi.htm)</u> 10-K 000-51333 10.3 September 10, 2012

10.15 <u>[Cloud Technology Partners, Inc. 2011 Equity Incentive Plan\*](http://www.sec.gov/Archives/edgar/data/1645590/000164559017000004/cloudtp2011equityincentive.htm)</u> S-8 333-221254 4.3 November 1, 2017

10.16 <u>[Amendment to the Cloud Technology Partners, Inc. 2011 Equity Incentive Plan\*](http://www.sec.gov/Archives/edgar/data/1645590/000164559017000004/amendmenttothecloudtechnol.htm)</u> S-8 333-221254 4.4 November 1, 2017

10.17 <u>[Plexxi Inc. 2011 Stock Plan\*](http://www.sec.gov/Archives/edgar/data/1645590/000162828018009219/plexxi_seriesa-2011stockpl.htm)</u> S-8 333-226181 4.3 July 16, 2018

10.18 <u>[Hewlett Packard Enterprise Company 2015 Employee Stock Purchase Plan (as amended and restated on July 18, 2018, effective as of October 8, 2015)](http://www.sec.gov/Archives/edgar/data/1645590/000162828018011596/hpe-07312018xex1029.htm)</u> 10-Q 001-37483 10.29 September 4, 2018

10.19 <u>[Form of Restricted Stock Units Grant Agreement](http://www.sec.gov/Archives/edgar/data/1645590/000162828018011596/hpe-07312018xex1030.htm)</u> 10-Q 001-37483 10.30 September 4, 2018

10.20 <u>[Hewlett Packard Enterprise Executive Deferred Compensation Plan (as amended and restated December 1, 2018)\*](http://www.sec.gov/Archives/edgar/data/1645590/000162828018015054/ex-1027x10312018.htm)</u> 10-K 001-37483 10.27 December 12, 2018

10.21 <u>[First Amendment to the Hewlett Packard Enterprise Company Severance and Long-Term Incentive Change in Control Plan for Executive Officers\*](http://www.sec.gov/Archives/edgar/data/1645590/000162828018015054/ex-1029x10312018.htm)</u> 10-K 001-37483 10.29 December 12, 2018

10.22 <u>[BlueData Software Inc. 2012 Stock Incentive Plan\*](http://www.sec.gov/Archives/edgar/data/1645590/000164559019000001/bluedatasoftwareinc-2012st.htm)</u> S-8 333-229449 4.3 January 31, 2019

10.23 <u>[Cray Inc. 2013 Equity Incentive Plan (as amended and restated June 11, 2019)\*](http://www.sec.gov/Archives/edgar/data/1645590/000162828019012062/ex43crayar2013plan.htm)</u> S-8 333-234033 4.3 October 1, 2019

10.24 <u>[Termination and Mutual Release Agreement dated as of October 30, 2019 by and between HP Inc. and Hewlett Packard Enterprise Company](https://www.sec.gov/Archives/edgar/data/1645590/000164559019000044/ex-1031x10312019.htm)</u> 10-K 001-37483 10.31 December 13, 2019

10.25 <u>[Aircraft Time Sharing Agreement, dated as of December 13, 2019, between Hewlett Packard Enterprise and Antonio Neri\*](http://www.sec.gov/Archives/edgar/data/1645590/000164559020000009/hpe-01312020xex1032avi.htm)</u> 10-Q 001-37483 10.32 March 9, 2020

10.26 <u>[Silver Peak Systems, Inc. (fka Cheyenne Networks, Inc.) 2004 Stock Plan, as amended\*](http://www.sec.gov/Archives/edgar/data/1645590/000164559020000047/a2004stockplan.htm)</u> S-8 333-249731 4.3 October 29, 2020

10.27 <u>[Silver Peak Systems, Inc. 2014 Equity Incentive Plan, as amended\*](http://www.sec.gov/Archives/edgar/data/1645590/000164559020000047/a2014equityincentiveplan.htm)</u> S-8 333-249731 4.4 October 29, 2020

10.28 <u>[2021 Stock Incentive Plan – Form of Restricted Stock Units Grant Agreement\*](http://www.sec.gov/Archives/edgar/data/1645590/000164559021000068/ex-1030xrsuagreement.htm)</u> 10-K 001-37483 10.30 December 10, 2021

10.29 <u>[2021 Stock Incentive Plan – Form of Performance-Adjusted Restricted Stock Units Grant Agreement\*](http://www.sec.gov/Archives/edgar/data/1645590/000164559021000068/ex-1031xparsuagreement.htm)</u> 10-K 001-37483 10.31 December 10, 2021

10.30 <u>[Five-Year Credit Agreement dated as of December 10, 2021 among Hewlett Packard Enterprise Company, the Lenders Party Hereto, JPMorgan Chase Bank, N.A., as Administrative Processing Agent and Co-Administrative Agent and Citibank, N.A., as Co-Administrative Agent](http://www.sec.gov/Archives/edgar/data/1645590/000164559022000016/ex-1033xhpe_creditagreemen.htm)</u> 10-Q 001-37483 10.33 March 3, 2022

10.31 <u>[2021 Stock Incentive Plan - Form of Performance-Adjusted Restricted Stock Units Grant Agreement (for grants beginning December 2022)\*](http://www.sec.gov/Archives/edgar/data/1645590/000164559022000071/ex-1031xparsuagreementfy23.htm)</u> 10-K 001-37483 10.31 December 8, 2022

31.1 <u>[Certification of Chief Executive Officer pursuant to Rule 13a- 14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended‡](hpe-01312023xex311q1.htm)</u>

31.2 <u>[Certification of Chief Financial Officer pursuant to Rule 13a- 14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended‡](hpe-01312023xex312q1.htm)</u>

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| | |
|:---|:---|
| 32 | <u>[Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002†](hpe-01312023xex32q1.htm)</u> |
| 101.INS | Inline XBRL Instance Document‡ |
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document‡ |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document‡ |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document‡ |
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document‡ |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document‡ |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |

---

&nbsp;&nbsp;&nbsp;&nbsp;

\*&nbsp;&nbsp;&nbsp;&nbsp;Indicates management contract or compensation plan, contract or arrangement

‡&nbsp;&nbsp;&nbsp;&nbsp;Filed herewith

†&nbsp;&nbsp;&nbsp;&nbsp;Furnished herewith

The registrant agrees to furnish to the Commission supplementally upon request a copy of any instrument with respect to long-term debt not filed herewith as to which the total amount of securities authorized thereunder does not exceed 10% of the total assets of the registrant and its subsidiaries on a consolidated basis.

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**SIGNATURE**

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

---

| |
|:---|
| HEWLETT PACKARD ENTERPRISE COMPANY |
| /s/ TAREK A. ROBBIATI |
| Tarek A. Robbiati<br> *Executive Vice President and Chief Financial Officer*<br>*(Principal Financial Officer and Authorized*<br>*Signatory)* |

---

Date: March 7, 2023

## Exhibit 31.1

**Exhibit 31.1**

**CERTIFICATION**

I, Antonio F. Neri, certify that:

1.&nbsp;&nbsp;&nbsp;&nbsp;I have reviewed this Quarterly Report on Form 10-Q of Hewlett Packard Enterprise Company;

2.&nbsp;&nbsp;&nbsp;&nbsp;Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.&nbsp;&nbsp;&nbsp;&nbsp;Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.&nbsp;&nbsp;&nbsp;&nbsp;The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.&nbsp;&nbsp;&nbsp;&nbsp;The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: March 7, 2023

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| |
|:---|
| /s/ ANTONIO F. NERI |
| Antonio F. Neri<br>*President and Chief Executive Officer*<br>*(Principal Executive Officer)* |

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## Exhibit 31.2

**Exhibit 31.2**

**CERTIFICATION**

I, Tarek A. Robbiati, certify that:

1.&nbsp;&nbsp;&nbsp;&nbsp;I have reviewed this Quarterly Report on Form 10-Q of Hewlett Packard Enterprise Company;

2.&nbsp;&nbsp;&nbsp;&nbsp;Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.&nbsp;&nbsp;&nbsp;&nbsp;Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.&nbsp;&nbsp;&nbsp;&nbsp;The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)Evaluated the effectiveness of the registrant's disclosure controls and procedures, and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.&nbsp;&nbsp;&nbsp;&nbsp;The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: March 7, 2023

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| |
|:---|
| /s/ TAREK A. ROBBIATI |
| Tarek A. Robbiati<br> *Executive Vice President and Chief Financial Officer*<br>*(Principal Financial Officer)* |

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## Ex-32

**Exhibit 32**

**CERTIFICATION**

**PURSUANT TO 18 U.S.C. 1350, AS ADOPTED PURSUANT TO**

**SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**

Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, Antonio F. Neri, the Chief Executive Officer, and Tarek A. Robbiati, the Chief Financial Officer, of Hewlett Packard Enterprise Company hereby certify that, to their knowledge:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;&nbsp;&nbsp;&nbsp;The Quarterly Report on Form 10-Q of Hewlett Packard Enterprise Company for the first quarter ended January 31, 2023, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;&nbsp;&nbsp;&nbsp;The information contained in such Quarterly Report on Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of Hewlett Packard Enterprise Company.

March 7, 2023

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| | |
|:---|:---|
| By: | /s/ Antonio F. Neri |
|  | Antonio F. Neri<br>*President and Chief Executive Officer* |

---

---

| | |
|:---|:---|
| By: | /s/ Tarek A. Robbiati |
|  | Tarek A. Robbiati<br> *Executive Vice President and Chief Financial Officer* |

---

A signed original of this written statement required by Section 906 has been provided to Hewlett Packard Enterprise Company and will be retained by Hewlett Packard Enterprise Company and furnished to the Securities and Exchange Commission or its staff upon request.

<br>