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Segment Information | 12 Months Ended
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Oct. 31, 2018
Segment Reporting [Abstract] |
Segment Information | Segment Information HP is a leading global provider of personal computing and other access devices, imaging and printing products, and related technologies, solutions and services. HP sells to individual consumers, SMBs and large enterprises, including customers in the government, health and education sectors. HP’s operations are organized into three reportable segments: Personal Systems, Printing and Corporate Investments. HP’s organizational structure is based on many factors that the chief operating decision maker uses to evaluate, view and run its business operations, which include, but are not limited to, customer base and homogeneity of products and technology. The segments are based on this organizational structure and information reviewed by HP’s chief operating decision maker to evaluate segment results. The chief operating decision maker uses several metrics to evaluate the performance of the overall business, including earnings from operations, and uses these results to allocate resources to each of the segments. A summary description of each segment is as follows: Personal Systems offers Commercial and Consumer desktop and notebook PCs, Workstations, thin clients, Commercial mobility devices, retail POS systems, displays and other related accessories, software, support and services. HP groups Commercial notebooks, Commercial desktops, Commercial services, Commercial mobility devices, Commercial detachables and convertibles, Workstations, retail POS systems and thin clients into Commercial PCs and Consumer notebooks, Consumer desktops, Consumer services and Consumer detachables into Consumer PCs when describing performance in these markets. Described below are HP’s global business capabilities within Personal Systems:
• | Commercial PCs are optimized for use by customers, including enterprise, public sector and SMB customers, with a focus on robust designs, security, serviceability, connectivity, reliability and manageability in networked and cloud based environments. Additionally, HP offers a range of services and solutions to enterprise, public sector and SMB customers to help them manage the lifecycle of their PC and mobility installed base.
• | Consumer PCs are optimized for consumer usage, focusing on gaming, consuming multi-media for entertainment, personal life activities, staying connected, sharing information, getting things done for work including creating content, staying informed and security.
Personal Systems groups its global business capabilities into the following business units when reporting business performance:
• | Notebooks consists of Consumer notebooks, Commercial notebooks, Mobile workstations and Commercial mobility devices;
• Desktops includes Consumer desktops, Commercial desktops, thin clients, and retail POS systems;
• | Workstations consists of desktop, workstations and accessories; and
• | Other consists of Consumer and Commercial services as well as other Personal Systems capabilities.
Printing provides Consumer and Commercial printer hardware, Supplies, solutions and services, as well as scanning devices. Printing is also focused on imaging solutions in the commercial and industrial markets. Described below are HP’s global business capabilities within Printing.
• | Office Printing Solutions delivers HP’s office printers, Supplies, services and solutions to SMBs and large enterprises. It also includes Samsung- branded and OEM hardware, supplies and solutions. HP goes to market through its extensive channel network and directly with HP sales. Ongoing key initiatives include the design and deployment of A3 products and solutions for the copier and multifunction printer market, printer security solutions, PageWide solutions and award-winning JetIntelligence LaserJet products.
• | Home Printing Solutions delivers innovative printing products and solutions for the home, home business and micro business customers utilizing both HP’s Ink and Laser technologies. Initiatives such as Instant Ink and Continuous Ink Supply System provide business model innovation to benefit and expand HP’s existing customer base, while new technologies like Photo Lifestyle products drive print relevance for a mobile generation.
• | Graphics Solutions delivers large-format, commercial and industrial solutions to print service providers and packaging converters through a wide portfolio of printers and presses (HP DesignJet, HP Latex, HP Scitex, HP Indigo and HP PageWide Web Presses).
• | 3D Printing delivers the HP Multi-Jet Fusion 3D Printing Solution designed for prototyping and production of functional parts and functioning on an open platform facilitating the development of new 3D printing materials.
Printing groups its global business capabilities into the following business units when reporting business performance:
• | Commercial Hardware consists of Office Printing Solutions, Graphics Solutions and 3D Printing, excluding supplies;
• | Consumer Hardware includes Home Printing Solutions, excluding supplies; and
• | Supplies comprises a set of highly innovative consumable products, ranging from Ink and Laser cartridges to media, graphics supplies, 3D printing supplies and Samsung-branded A4 and A3 supplies and OEM supplies, for recurring use in Consumer and Commercial Hardware.
Corporate Investments includes HP Labs and certain business incubation projects. The accounting policies HP uses to derive segment results are substantially the same as those used by HP in preparing these financial statements. HP derives the results of the business segments directly from its internal management reporting system. HP does not allocate certain operating expenses, which it manages at the corporate level, to its segments. These unallocated amounts include certain corporate governance costs and market-related retirement credits, stock-based compensation expense, restructuring and other charges, acquisition-related charges, amortization of intangible assets and defined benefit plan settlement charges. Realignment Effective at the beginning of its first quarter of fiscal year 2018, HP implemented an organizational change to align its segment and business unit financial reporting more closely with its current business structure. The organizational change resulted in the transfer of long life consumables from Commercial to Supplies within the Printing segment. Certain revenues related to service arrangements, which are being eliminated for the purposes of reporting HP’s consolidated net revenue, have now been reclassified from Other to segments. HP has reflected this change to its segment and business unit information in prior reporting periods on an as-if basis. The reporting change had no impact on previously reported consolidated net revenue, earnings from operations, net earnings or net EPS. Segment Operating Results from Continuing Operations and the reconciliation to HP consolidated results were as follows:
| For the fiscal years ended October 31,
| 2018 |  | 2017 |  | 2016
|  |  | In millions |  |
Net revenue: |  |  |  |  |  |  |  |
Personal Systems | $ | 37,661 |  |  | $ | 33,321 |  |  | $ | 29,946 |
Printing | 20,805 |  |  | 18,728 |  |  | 18,123 |
Corporate Investments | 5 |  |  | 8 |  |  | 7 |
Total segments | $ | 58,471 |  |  | $ | 52,057 |  |  | $ | 48,076 |
Other (1) | 1 |  |  | (1 | ) |  | 162 |
Total net revenue | $ | 58,472 |  |  | $ | 52,056 |  |  | $ | 48,238 |
Earnings from continuing operations before taxes: |  |  |  |  |  |  |
Personal Systems | $ | 1,411 |  |  | $ | 1,210 |  |  | $ | 1,150 |
Printing | 3,323 |  |  | 3,146 |  |  | 3,114 |
Corporate Investments | (82 | ) |  | (87 | ) |  | (98 | )
Total segment earnings from operations | $ | 4,652 |  |  | $ | 4,269 |  |  | $ | 4,166 |
Corporate and unallocated costs and other | 22 |  |  | (33 | ) |  | (28 | )
Stock-based compensation expense | (268 | ) |  | (224 | ) |  | (182 | )
Restructuring and other charges | (132 | ) |  | (362 | ) |  | (205 | )
Acquisition-related charges | (123 | ) |  | (125 | ) |  | (7 | )
Amortization of intangible assets | (80 | ) |  | (1 | ) |  | (16 | )
Defined benefit plan settlement charges | (7 | ) |  | (5 | ) |  | (179 | )
Interest and other, net | (1,051 | ) |  | (243 | ) |  | 212 |
Total earnings from continuing operations before taxes | $ | 3,013 |  |  | $ | 3,276 |  |  | $ | 3,761 |
(1) | For the fiscal year 2016, the amount includes the recognition of revenue previously deferred in relation to sales to the
pre-Separation finance entity. Segment Assets HP allocates assets to its business segments based on the segments primarily benefiting from the assets. Total assets by segment and the reconciliation of segment assets to HP consolidated assets were as follows:
| As of October 31
| 2018 |  | 2017
| In millions
Personal Systems | $ | 13,447 |  |  | $ | 12,156 |
Printing | 13,706 |  |  | 10,548 |
Corporate Investments | 5 |  |  | 3 |
Corporate and unallocated assets | 7,464 |  |  | 10,206 |
Total assets | $ | 34,622 |  |  | $ | 32,913 |
Major Customers No single customer represented 10% or more of HP’s net revenue in any fiscal year presented. Geographic Information Net revenue by country is based upon the sales location that predominately represents the customer location. For each of the fiscal years of 2018, 2017 and 2016, other than the United States, no country represented more than 10% of HP net revenue. Net revenue by country in which HP operates was as follows:
| For the fiscal years ended October 31
| 2018 |  | 2017 |  | 2016
|  |  | In millions |  |
United States | $ | 20,602 |  |  | $ | 19,321 |  |  | $ | 18,042 |
Other countries | 37,870 |  |  | 32,735 |  |  | 30,196 |
Total net revenue | $ | 58,472 |  |  | $ | 52,056 |  |  | $ | 48,238 |
Net property, plant and equipment by country in which HP operates was as follows
| As of October 31
| 2018 |  | 2017
| In millions
United States | $ | 935 |  |  | $ | 866 |
Singapore | 371 |  |  | 372 |
Other countries | 892 |  |  | 640 |
Total property, plant and equipment, net | $ | 2,198 |  |  | $ | 1,878 |
No single country other than those represented above exceeds 10% or more of HP’s total net property, plant and equipment in any fiscal year presented. Net revenue by segment and business unit was as follows:
| For the fiscal years ended October 31
| 2018 |  | 2017 |  | 2016
|  |  | In millions |  |
Notebooks | $ | 22,547 |  |  | $ | 19,782 |  |  | $ | 16,982 |
Desktops | 11,567 |  |  | 10,298 |  |  | 9,956 |
Workstations | 2,246 |  |  | 2,042 |  |  | 1,870 |
Other | 1,301 |  |  | 1,199 |  |  | 1,138 |
Personal Systems | 37,661 |  |  | 33,321 |  |  | 29,946 |
Supplies | 13,575 |  |  | 12,524 |  |  | 11,981 |
Commercial Hardware | 4,674 |  |  | 3,792 |  |  | 3,792 |
Consumer Hardware | 2,556 |  |  | 2,412 |  |  | 2,350 |
Printing | 20,805 |  |  | 18,728 |  |  | 18,123 |
Corporate Investments | 5 |  |  | 8 |  |  | 7 |
Total segment net revenue | 58,471 |  |  | 52,057 |  |  | 48,076 |
Other | 1 |  |  | (1 | ) |  | 162 |
Total net revenue | $ | 58,472 |  |  | $ | 52,056 |  |  | $ | 48,238 |

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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