HEWLETT PACKARD ENTERPRISE COMPANY (NYSE:HPE) Files An 8-K Financial Statements and ExhibitsItem 9.01(b) of the Initial 8-K to include previously omitted pro forma financial information related to the Separation, which is attached hereto as Exhibit 99.1, and to provide supplemental pro forma consolidated information, which is attached hereto as Exhibit 99.2. The supplemental unaudited pro forma financial information reflects the Company’s financial performance as if the Transactions occurred on November 1, 2015. The Company provides supplemental unaudited pro forma non-GAAP earnings from operations, EBITDA (non-GAAP), adjusted EBITDA (which represents EBITDA (non-GAAP) plus stock-based compensation expense), adjusted EBITDA less net capital expenditures, segment net revenue, business unit net revenue, combined segment net revenue, segment earnings, and geographic net revenue.
The information contained in Exhibit 99.2 shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Exchange Act or the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing. The information previously reported in the Initial 8-K is hereby incorporated by reference into this Form 8-K/A.
Use of Non-GAAP and adjusted financial information
HPE has included non-GAAP financial measures in the supplemental financial information in Exhibit 99.2 to supplement the Company’s condensed consolidated and combined financial statements presented on a GAAP basis.
HPE’s management uses net revenue on a constant currency basis, net revenue adjusted for divestitures and currency, non-GAAP income tax rate, non-GAAP net earnings from continuing operations, non-GAAP net earnings from discontinued operations, non-GAAP diluted net earnings per share from continuing operations, non-GAAP diluted net earnings per share from discontinued operations and non-GAAP earnings before interest, tax, depreciation and amortization to evaluate and forecast HPE's performance before gains, losses or other charges that are considered by HPE's management to be outside of HPE's core business segment operating results. Gross cash, net cash, adjusted net cash, adjusted gross cash, free cash flow, normalized free cash flow and net capital expenditures are liquidity measures that provide useful information to management about the amount of cash available for investment in HPE's businesses, funding acquisitions, repurchasing stock and other purposes. Net cash and net debt provide useful information to management about the state of HPE's condensed consolidated balance sheet. Operating company net cash and operating company net debt provide additional useful information to management about the state of HPE's condensed consolidated balance sheet by providing more transparency into the financial components of the operating company separate from HPE's financing business, which has different capital structure requirements and requires much greater leverage to run effectively.
These non-GAAP financial measures may have limitations as analytical tools, and these measures should not be considered in isolation or as a substitute for analysis of HPE's results as reported under GAAP. For example, items such as amortization of intangible assets, though not directly affecting HPE's cash position, represent the loss in value of intangible assets over time. The expense associated with this loss in value is not included in non-GAAP operating profit, non-GAAP operating profit as % of revenue, non-GAAP income tax rate, non-GAAP net earnings from continuing operations, non-GAAP net earnings from discontinued operations, non-GAAP diluted net earnings per share from continuing operations , non-GAAP diluted net earnings per share from discontinued operations and non-GAAP earnings before interest, tax depreciation and amortization and therefore does not reflect the full economic effect of the loss in value of those data center and intangible assets. In addition, items such as separation costs, restructuring charges, defined benefit plan settlement charges and remeasurement benefit and acquisition-related charges that are excluded from non-GAAP operating expense, non-GAAP operating profit, non-GAAP operating profit as % of revenue, non-GAAP tax rate, non-GAAP net earnings from continuing operations, non-GAAP net (loss) earnings from discontinued operations, non-GAAP diluted net earnings per share from continuing operations, non-GAAP diluted net (loss) earnings per share from discontinued operations and non-GAAP earnings before interest, tax, depreciation and amortization can have a material impact on the equivalent GAAP earnings measures and cash flow. Items such as income tax indemnification, valuation allowances, net, and the related tax impact from other non-GAAP measures that are excluded from the non-GAAP tax rate, non-GAAP net earnings from continuing operations, non-GAAP net (loss) earnings from discontinued operations, non-GAAP diluted net earnings per share from continuing operations, non-GAAP diluted net (loss) earnings per share from discontinued operations and non-GAAP earnings before interest, tax, depreciation and amortization can also have a material impact on the equivalent GAAP earnings measures and cash flow. HPE may not be able to liquidate the short-term and long-term investments included in gross cash immediately, which may limit the usefulness of gross cash as a liquidity measure. In addition, free cash flow, which includes net capital expenditures, does not represent the total increase or decrease in cash for the period. The non-GAAP financial information that we provide also may differ from the non-GAAP information provided by other companies.
HPE compensates for the limitations on our use of these non-GAAP financial measures by relying primarily on our GAAP financial statements and using non-GAAP financial measures only supplementally. HPE also provides robust and detailed reconciliations of each non-GAAP financial measure to the most directly comparable GAAP measure, and HPE encourages investors to review carefully those reconciliations.
HPE believes that providing these non-GAAP financial measures, in addition to the related GAAP measures provides investors with greater transparency to the information used by HPE's management in its financial and operational decision-making and allows investors to see HPE's results “through the eyes” of management. HPE further believes that providing this information better enables investors to understand HPE's operating performance and financial condition and to evaluate the efficacy of the methodology and information used by management to evaluate and measure such performance and financial condition.
Item 9.01. Financial Statements and Exhibits.
(d)Exhibits.
Hewlett Packard Enterprise Co ExhibitEX-99.1 2 hpe-seattle090620178kaxex991.htm EXHIBIT 99.1 Exhibit Exhibit 99.1UNAUDITED PRO FORMA CONDENSED CONSOLIDATED AND COMBINED FINANCIAL STATEMENTSOn September 1,…To view the full exhibit click here
About HEWLETT PACKARD ENTERPRISE COMPANY (NYSE:HPE)
Hewlett Packard Enterprise Company is a provider of technology solutions. The Company operates through five segments: Enterprise Group, Software, Enterprise Services, Financial Services and Corporate Investments. The Enterprise Group segment provides its customers with the technology infrastructure they need to optimize traditional information technology (IT). The Software segment allows its customers to automate IT operations to simplify, accelerate and secure business processes and drives the analytics that turn raw data into actionable knowledge. The Enterprise Services segment brings all of its solutions together through its consulting and support professionals. The Financial Services segment enables flexible IT consumption models, financial architectures and customized investment solutions for its customers. The Corporate Investments segment includes Hewlett Packard Labs and certain business incubation projects, among others.