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
CONSOLIDATED CONDENSED BALANCE SHEETS
(Unaudited)
(In millions)

	As of
	April 30, 2019			October 31, 2018
ASSETS
Current assets:
Cash and cash equivalents	$	3,556		$	5,166
Accounts receivable, net	5,414			5,113
Inventory	5,394			6,062
Other current assets	3,921			5,046
Total current assets	18,285			21,387
Property, plant and equipment, net	2,412			2,198
Goodwill	6,349			5,968
Other non-current assets	4,900			5,069
Total assets	$	31,946		$	34,622

LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Notes payable and short-term borrowings	$	290		$	1,463
Accounts payable	13,839			14,816
Employee compensation and benefits	826			1,136
Taxes on earnings	206			340
Other accrued liabilities	8,042			7,376
Total current liabilities	23,203			25,131
Long-term debt	4,749			4,524
Other non-current liabilities	5,481			5,606
Stockholders' deficit	(1,487		)	(639		)
Total liabilities and stockholders' deficit	$	31,946		$	34,622

HP INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
(In millions)

	Three months ended
	April 30, 2019			April 30, 2018
Cash flows from operating activities:
Net earnings	$	782		$	1,058
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization	181			127
Stock-based compensation expense	66			63
Restructuring and other charges	69			57
Deferred taxes on earnings	15			397
Other, net	118			185
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable	(314		)	(234		)
Inventory	171			86
Accounts payable	(779		)	201
Taxes on earnings	(11		)	(1,528		)
Restructuring and other	(33		)	(44		)
Other assets and liabilities	596			682
Net cash provided by operating activities	861			1,050
Cash flows from investing activities:
Investment in property, plant and equipment	(114		)	(113		)
Purchases of available-for-sale securities and other investments	—			(36		)
Maturities and sales of available-for-sale securities and other investments	410			206
Collateral posted for derivative instruments	(2		)	(293		)
Collateral returned for derivative instruments	2			857
Net cash provided by investing activities	296			621
Cash flows from financing activities:
(Payment of) Proceeds from short-term borrowings with original maturities less than 90 days, net	(1		)	943
Proceeds from short-term borrowings with original maturities greater than 90 days	—			100
Proceeds from debt, net of issuance costs	24			—
Payment of short-term borrowings with original maturities greater than 90 days	—			(969		)
Payment of debt	(62		)	(1,985		)
Stock-based award activities	7			40
Repurchase of common stock	(691		)	(801		)
Cash dividends paid	(245		)	(227		)
Net cash used in financing activities	(968		)	(2,899		)
Increase (Decrease) in cash and cash equivalents	189			(1,228		)
Cash and cash equivalents at beginning of period	3,367			5,475
Cash and cash equivalents at end of period	$	3,556		$	4,247

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