Additional Information

Reconciliation of GAAP Measures to Non-GAAP Measures

In this proxy statement, HP discloses the following non-GAAP financial measures:

  • Non-GAAP operating profit: Non-GAAP operating profit is a non-GAAP measure that is defined as GAAP operating profit, exclusive of costs related to restructuring and other charges, acquisition-related charges, and amortization of intangible assets. Management uses non-GAAP operating profit to evaluate and forecast our performance before gains, losses, or other charges that are considered by management to be outside of our core business segment operating results. We believe that presenting non-GAAP operating profit provides investors with greater visibility with respect to the information used by management in its financial and operational decision making. We further believe that providing this additional non-GAAP information helps investors understand our operating performance and evaluate the efficacy of the methodology and information used by management to evaluate and measure such performance. This additional non-GAAP information is not intended to be considered in isolation or as a substitute for GAAP operating profit.
  • Non-GAAP diluted net EPS: Non-GAAP diluted net EPS is a non-GAAP measure that is defined as GAAP diluted net EPS, exclusive of costs related to restructuring and other charges, acquisition-related charges, amortization of intangible assets, debt extinguishment costs, Oracle litigation proceeds, defined benefit plan settlement (gains) charges, and non-operating retirement-related credits. Management uses non-GAAP diluted net EPS to evaluate and forecast our performance before gains, losses, or other charges that are considered by management to be outside of our core business segment operating results. We believe that presenting non-GAAP diluted net EPS provides investors with greater visibility with respect to the information used by management in its financial and operational decision making. We further believe that providing this additional non-GAAP information helps investors understand our operating performance and evaluate the efficacy of the methodology and information used by management to evaluate and measure such performance. This additional non-GAAP information is not intended to be considered in isolation or as a substitute for GAAP diluted net EPS.
  • Non-GAAP free cash flow: Non-GAAP free cash flow is a non-GAAP measure that is defined as net cash provided by operating activities adjusted for net investments in leases and net investments in property, plant and equipment and one-time Oracle litigation proceeds received during the fourth quarter of fiscal 2021. HP’s management uses non-GAAP free cash flow for the purpose of determining the amount of cash available for investment in HP’s businesses, repurchasing stock and other purposes. HP’s management also uses non-GAAP free cash flow to evaluate HP’s historical and prospective liquidity. This additional non-GAAP information is not intended to be considered in isolation or as a substitute for net cash provided by operating activities.
(in millions) Twelve months ended
October 31, 2021 October 31, 2016
GAAP operating profit $5,302 $3,549
Non-GAAP adjustments:    
     Restructuring and other charges 245 205
     Acquisition-related charges 68 7
     Amortization of intangible assets 154 16
     Non-operating retirement-related credits(1) (146)
     Defined benefit plan settlement charges(1) 179
Non-GAAP operating profit $5,769 $3,810
(1)

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.

(in millions, except per share amounts) Twelve months ended
October 31, 2021 October 31, 2016

Amounts
Diluted net EPS
Amounts
Diluted net EPS
GAAP net earnings $ 6,503 $ 5.33 $ 2,666 $ 1.53
Non-GAAP adjustments:        
     Restructuring and other charges 245 0.20 205 0.12
     Acquisition-related charges 68 0.06 7
     Amortization of intangible assets 154 0.13 16 0.01
     Debt extinguishment costs 16 0.01
     Oracle litigation proceeds (2,304) (1.89)
     Defined benefit plan settlement (gains) charges (37) (0.03) 179 0.10
     Non-operating retirement-related credits (153) (0.13) (146) (0.08)
Tax adjustments(a) 128 0.11 332 0.19
Tax indemnification credits (472) (0.27)
Non-GAAP net earnings $ 4,620 $ 3.79 $ 2,787 $ 1.60
(a)

Includes tax impact on non-GAAP adjustments.

(in millions) Twelve months ended
October 31, 2021 October 31, 2016
GAAP net cash provided by operating activities $6,409 $3,230
Non-GAAP adjustments:    
     Net investments in property, plant and equipment (582) (427)
     Net investments in leases (111)
     Net Oracle litigation proceeds (1,771)
Non-GAAP free cash flow $4,167 $2,803