Stock-Based Compensation (Table)

12 Months Ended

Oct. 31, 2018

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Schedule of Stock-Based Compensation Expense and the Resulting Tax Benefits

Stock-based compensation expense and the resulting tax benefits for operations were as follows:



	For the fiscal years ended October 31
	2018			2017			2016
	In millions
Stock-based compensation expense	$	268		$	224		$	182
Income tax benefit	(59		)	(71		)	(63		)
Stock-based compensation expense, net of tax	$	209		$	153		$	119

Weighted-Average Fair Value and Assumptions Used to Measure Fair Value of Restricted Stock Units

The weighted-average fair value and the assumptions used to measure the fair value of restricted stock units subject to performance-adjusted vesting conditions in the Monte Carlo simulation model were as follows:



	For the fiscal years ended October 31
	2018			2017			2016
Weighted-average fair value⁽¹⁾	$	24		$	20		$	13
Expected volatility⁽²⁾	29.5		%	30.5		%	32.5		%
Risk-free interest rate⁽³⁾	1.9		%	1.4		%	1.2		%
Expected performance period in years⁽⁴⁾	2.9			2.9			2.9


⁽¹⁾	The weighted-average fair value was based on performance-adjusted restricted stock units granted during the period.


⁽²⁾	The expected volatility was estimated using the historical volatility derived from HP’s common stock.


⁽³⁾	The risk-free interest rate was estimated based on the yield on U.S. Treasury zero-coupon issues.


⁽⁴⁾	The expected performance period was estimated based on the length of the remaining performance period from the grant date.

Summary of Restricted Stock Awards Activity

A summary of restricted stock units activity is as follows:



	As of October 31
	2018				2017				2016
	Shares		Weighted- Average Grant Date Fair Value Per Share		Shares		Weighted- Average Grant Date Fair Value Per Share		Shares		Weighted- Average Grant Date Fair Value Per Share
	In thousands				In thousands				In thousands
Outstanding at beginning of year	31,822		$	14	28,710		$	13	29,717		$	32
Granted	16,364		$	21	15,858		$	16	29,286		$	10
Vested	(15,339	)	$	15	(11,915	)	$	14	(4,161	)	$	13
Awards canceled due to Separation	—		$	—	—		$	—	(23,926	)	$	32
Forfeited	(2,063	)	$	17	(831	)	$	14	(2,206	)	$	14
Outstanding at end of year	30,784		$	18	31,822		$	14	28,710		$	13

Weighted-Average Fair Value and Assumptions Used to Measure Fair Value of Stock Options

The weighted-average fair value and the assumptions used to measure fair value were as follows:



	For the fiscal years ended October 31
	2018			2017			2016
Weighted-average fair value⁽¹⁾	$	5		$	4		$	4
Expected volatility⁽²⁾	29.4		%	28.0		%	36.2		%
Risk-free interest rate⁽³⁾	2.5		%	1.9		%	1.8		%
Expected dividend yield⁽⁴⁾	2.6		%	2.8		%	3.5		%
Expected term in years⁽⁵⁾	5.0			5.5			6.0


⁽¹⁾	The weighted-average fair value was based on stock options granted during the period.

⁽²⁾

For all awards granted in fiscal year 2018, expected volatility was estimated based on a blended volatility (50% historical volatility and 50% implied volatility from traded options on HP's common stock). For the awards granted in fiscal year 2017 and 2016, expected volatility was estimated using the leverage-adjusted average of the term-matching volatilities of peer companies due to the lack of volume of forward traded options, which precluded the use of implied volatility.


⁽³⁾	The risk-free interest rate was estimated based on the yield on U.S. Treasury zero-coupon issues.


⁽⁴⁾	The expected dividend yield represents a constant dividend yield applied for the duration of the expected term of the award.


⁽⁵⁾	For awards subject to service-based vesting, due to the lack of historical exercise and post-vesting termination patterns of the post-Separation employee base, the expected term was estimated using a simplified method; and for performance-contingent awards, the expected term represents an output from the lattice model.

Summary of Stock Options Activity

A summary of stock options activity is as follows:



	As of October 31
	2018							2017							2016
	Shares		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term	Aggregate Intrinsic Value		Shares		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term	Aggregate Intrinsic Value		Shares		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term	Aggregate Intrinsic Value
	In thousands				In years	In millions		In thousands				In years	In millions		In thousands				In years	In millions
Outstanding at beginning of year	18,067		$	13				28,218		$	12				36,278		$	26
Granted and assumed through acquisition	54		$	21				104		$	19				25,425		$	6
Exercised	(10,644	)	$	13				(9,407	)	$	11				(4,714	)	$	8
Awards canceled due to Separation	—		$	—				—		$	—				(26,252	)	$	26
Forfeited/canceled/expired	(391	)	$	16				(848	)	$	17				(2,519	)	$	17
Outstanding at end of year	7,086		$	14	4.2	$	73	18,067		$	13	4.2	$	152	28,218		$	12	5.0	$	73
Vested and expected to vest	7,084		$	14	4.2	$	73	17,692		$	13	4.1	$	149	26,850		$	12	4.9	$	71
Exercisable	4,707		$	14	3.7	$	49	10,898		$	12	3.1	$	102	15,418		$	11	3.7	$	62

Summary of Significant Ranges of Outstanding and Exercisable Stock Options

The following table summarizes significant ranges of outstanding and exercisable stock options:



	As of October 31, 2018
	Options Outstanding				Options Exercisable
Range of Exercise Prices	Shares Outstanding	Weighted- Average Remaining Contractual Term	Weighted- Average Exercise Price		Shares Exercisable	Weighted- Average Exercise Price
	In thousands	In years	In thousands
$0-$9.99	451	2.3	$	7	451	$	7
$10-$19.99	6,522	4.3	$	14	4,143	$	14
$20-$29.99	113	5.3	$	23	113	$	23
	7,086				4,707

Schedule of Shares Available for Future Grant and Shares Reserved for Future Issuance

Shares available for future grant and shares reserved for future issuance under the stock-based incentive compensation plans and the 2011 ESPP were as follows:



	As of October 31
	2018	2017	2016
	In thousands
Shares available for future grant	305,767	419,071	453,865
Shares reserved for future issuance	343,076	468,531	510,176