| (a) | Effective first quarter of fiscal 2024, HP presents consolidated net revenue and cost of revenue bifurcated between products and services. HP has reflected this change to its prior reporting periods on an as-if basis. The reporting change had no impact to previously reported segment net revenue, consolidated net revenue, earnings from operations, net earnings or net earnings per share ("EPS"). Services include revenues from support and maintenance contracts and other services, and excludes product hardware and supplies revenues associated with as-a-service offerings and instant ink subscriptions which are categorized within product revenues. |
| HP INC. AND SUBSIDIARIES
ADJUSTMENTS TO GAAP NET EARNINGS, EARNINGS FROM OPERATIONS, OPERATING MARGIN AND DILUTED NET EARNINGS PER SHARE (Unaudited) (In millions, except per share amounts) |
| Three months ended | ||||||||||||||||||||||
| January 31, 2024 | October 31, 2023 | January 31, 2023 | ||||||||||||||||||||
| Amounts |
Diluted
net earnings per share | Amounts |
Diluted
net earnings per share | Amounts |
Diluted
net earnings per share | |||||||||||||||||
| GAAP net earnings | $ | 622 | $ | 0.62 | $ | 974 | $ | 0.97 | $ | 469 | $ | 0.47 | ||||||||||
| Non-GAAP adjustments: | ||||||||||||||||||||||
| Restructuring and other charges | 63 | 0.06 | 111 | 0.11 | 141 | 0.14 | ||||||||||||||||
| Acquisition and divestiture charges | 27 | 0.03 | 34 | 0.03 | 84 | 0.08 | ||||||||||||||||
| Amortization of intangible assets | 81 | 0.08 | 88 | 0.09 | 85 | 0.09 | ||||||||||||||||
| Debt extinguishment costs | — | — | — | — | 8 | 0.01 | ||||||||||||||||
| Non-operating retirement-related credits | (2 | ) | — | (11 | ) | (0.01 | ) | (10 | ) | (0.01 | ) | |||||||||||
| Tax adjustments (a) | 17 | 0.02 | (294 | ) | (0.29 | ) | (46 | ) | (0.05 | ) | ||||||||||||
| Non-GAAP net earnings | $ | 808 | $ | 0.81 | $ | 902 | $ | 0.90 | $ | 731 | $ | 0.73 | ||||||||||
| GAAP earnings from operations | $ | 935 | $ | 1,014 | $ | 743 | ||||||||||||||||
| Non-GAAP adjustments: | ||||||||||||||||||||||
| Restructuring and other charges | 63 | 111 | 141 | |||||||||||||||||||
| Acquisition and divestiture charges | 27 | 34 | 84 | |||||||||||||||||||
| Amortization of intangible assets | 81 | 88 | 85 | |||||||||||||||||||
| Non-GAAP earnings from operations | $ | 1,106 | $ | 1,247 | $ | 1,053 | ||||||||||||||||
| GAAP operating margin | 7.1 | % | 7.3 | % | 5.4 | % | ||||||||||||||||
| Non-GAAP adjustments | 1.3 | % | 1.7 | % | 2.2 | % | ||||||||||||||||
| Non-GAAP operating margin | 8.4 | % | 9.0 | % | 7.6 | % | ||||||||||||||||
(a) Includes tax impact on non-GAAP adjustments.
