HP Inc. Reports Fiscal 2019 Second Quarter Results

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

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

	Six months ended
	April 30, 2019						April 30, 2018
	Amounts			Diluted net earnings per share			Amounts			Diluted net earnings per share
GAAP net earnings	$	1,585		$	1.02		$	2,996		$	1.81
Non-GAAP adjustments:
Restructuring and other charges	124			0.07			88			0.05
Acquisition-related charges	21			0.01			87			0.05
Amortization of intangible assets	58			0.04			40			0.02
Non-operating retirement-related credits	(22		)	(0.01		)	(109		)	(0.07		)
Defined benefit plan settlement charges	—			—			1			—
Debt extinguishment costs	—			—			126			0.08
Tax adjustments^(a)	(136		)	(0.08		)	(1,628		)	(0.97		)
Non-GAAP net earnings	$	1,630		$	1.05		$	1,601		$	0.97

GAAP earnings from operations^(b)	$	1,854					$	1,819
Non-GAAP adjustments:
Restructuring and other charges	124						88
Acquisition-related charges	21						87
Amortization of intangible assets	58						40
Non-GAAP earnings	$	2,057					$	2,034

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

Includes tax impact on non-GAAP adjustments.

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