Retirement and Post-Retirement Benefit Plans

Pension Benefit Expense

The Company's total net pension benefit cost recognized in the Condensed Consolidated Statements of Earnings was $46 million and $41 million for the three months ended April 30, 2017 and 2016, respectively, and $111 million and $70 million for the six months ended April 30, 2017 and 2016, respectively. The amount for the three months ended April 30, 2017 includes a pre-tax benefit of $17 million resulting from remeasurements of certain Hewlett Packard Enterprise pension plans in association with the Everett Transaction, $16 million of which has been recorded within Defined benefit plan settlement charges and remeasurement (benefit) in the Condensed Consolidated Statement of Earnings, with the remainder recorded within discontinued operations. For the three months ended April 30, 2017, discontinued operations also includes incremental pre-tax pension expense of $23 million arising from the Everett Transaction.



	Three months ended April 30,
	Non-U.S. Defined Benefit Plans						Post-Retirement Benefit Plans
	2017			2016			2017			2016
	In millions
Service cost	$	30		$	50		$	1		$	1
Interest cost	52			78			1			2
Expected return on plan assets	(131		)	(161		)	—			—
Amortization and deferrals:
Actuarial loss (gain)	64			54			(1		)	(1		)
Prior service benefit	(4		)	(4		)	—			—
Net periodic benefit cost	11			17			1			2
Settlement loss	3			1			—			—
Special termination benefits	1			1			—			—
Plan expense allocation	(5		)	(2		)	—			—
Net benefit cost from continuing operations	10			17			1			2
Summary of net benefit cost:
Continuing operations	10			17			1			2
Discontinued operations	35			22			—			—
Net benefit cost	$	45		$	39		$	1		$	2



	Six months ended April 30,
	Non-U.S. Defined Benefit Plans						Post-Retirement Benefit Plans
	2017			2016			2017			2016
	In millions
Service cost	$	70		$	100		$	2		$	2
Interest cost	102			158			2			4
Expected return on plan assets	(264		)	(331		)	—			(1		)
Amortization and deferrals:
Actuarial loss (gain)	140			109			(2		)	(2		)
Prior service benefit	(8		)	(9		)	—			—
Net periodic benefit cost	40			27			2			3
Settlement loss	3			1			—			—
Special termination benefits	2			3			—			—
Plan expense allocation	(15		)	(4		)	(1		)	—
Net benefit cost from continuing operations	30			27			1			3
Summary of net benefit cost:
Continuing operations	30			27			1			3
Discontinued operations	79			40			1			—
Net benefit cost	$	109		$	67		$	2		$	3

Employer Contributions and Funding Policy

The Company's policy is to fund its pension plans so that it makes at least the minimum contribution required by local government, funding and taxing authorities.

During the six months ended April 30, 2017, the Company contributed approximately $2.1 billion to its non-U.S. pension plans, which includes a funding payment of approximately $1.9 billion associated with the Everett Transaction, and paid $1 million to cover benefit claims under the Company's post-retirement benefit plans.

HPE previously disclosed in its Consolidated Financial Statements for the fiscal year ended October 31, 2016, that excluding the above-mentioned pension funding payment related to the Everett Transaction, the Company expected to contribute approximately $348 million to its non-U.S. pension plans in fiscal 2017, approximately $2 million to cover benefit payments to its U.S. non-qualified plan participants and approximately $3 million to cover benefit claims for the Company's post-retirement benefit plans.

As a result of the Everett Transaction, revisions to expected contributions for certain pension plans, and the impact of foreign currency, the Company’s expected fiscal 2017 contribution to its non-U.S. pension plans was reduced to approximately $299 million. During the remainder of fiscal 2017, HPE now anticipates that it will make contributions of approximately $79 million to its non-U.S. pension plans, approximately $1 million to its U.S. non-qualified plan participants and approximately $2 million to cover benefit claims under the Company's post-retirement benefit plans.

The Company's pension and other post-retirement benefit costs and obligations depend on various assumptions. Differences between expected and actual returns on investments and changes in discount rates and other actuarial assumptions are reflected as unrecognized gains or losses, and such gains or losses are amortized to earnings in future periods. A deterioration in the funded status of a plan could result in a need for additional company contributions or an increase in net pension and post-retirement benefit costs in future periods. Actuarial gains or losses are determined at the measurement date and amortized over the remaining service life for active and closed plans or the life expectancy of plan participants for frozen plans. During the first quarter of fiscal 2017, the Company changed its method used to estimate the service and interest cost components of net periodic benefit cost for defined benefit plans to a full yield curve approach with costs calculated at individual annual spot rates.