Hewlett Packard Enterprise Co - FORM 8-K - EX-99.2 - EXHIBIT 99.2 - September 6, 2017

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Exhibit 99.2
Hewlett Packard Enterprise Company and Subsidiaries
 Supplemental Unaudited Pro Forma Consolidated and Combined Financial Information
 
 
 
 
 
 
 
 
 
Fiscal year ended October 31,
 
Six months ended April 30,
 
2015
 
2016
 
2016
 
2017
 
(In millions)
Net revenue:
 
 
 
 
 
 
 
Products
$
19,135

 
$
18,843

 
$
9,818

 
$
8,229

Services
11,581

 
11,073

 
5,624

 
5,292

Financing income
361

 
364

 
176

 
189

Total net revenue
31,077

 
30,280

 
15,618

 
13,710

Costs and expenses:
 
 
 
 
 
 
 
Cost of products
13,294

 
13,041

 
6,760

 
5,882

Cost of services
7,479

 
7,217

 
3,680

 
3,475

Financing interest
240

 
249

 
119

 
131

Research and development
1,676

 
1,714

 
899

 
732

Selling, general and administrative
5,142

 
5,380

 
2,823

 
2,433

Amortization of intangible assets
229

 
272

 
142

 
138

Restructuring charges
197

 
417

 
200

 
152

Acquisition and other related charges
84

 
145

 
79

 
94

Separation costs
797

 
362

 
169

 
41

Defined benefit plan settlement charges and remeasurement (benefit)
(7
)
 
—

 
—

 
(16
)
Gain on H3C and MphasiS divestitures
—

 
(2,420
)
 
—

 
—

Total costs and expenses
29,131

 
26,377

 
14,871

 
13,062

Earnings from operations
1,946

 
3,903

 
747

 
648

Interest and other, net
(9
)
 
(284
)
 
(125
)
 
(164
)
Tax indemnification adjustments
—

 
317

 
(54
)
 
(11
)
Loss from equity interests
(2
)
 
(76
)
 
—

 
(25
)
Earnings before taxes
1,935

 
3,860

 
568

 
448

Benefit / provision for taxes
705

 
(623
)
 
(65
)
 
(675
)
Net earnings (loss) from continuing operations
$
2,640

 
$
3,237

 
$
503

 
$
(227
)
 
 
 
 
 
 
 
 
Other Data:

 
 
 
 
 

Depreciation expense
$
2,247

 
$
1,979

 
$
989

 
$
1,024

Stock-based compensation expense
$
368

 
$
401

 
$
205

 
$
253

Net capital expenditures
$
2,731

 
$
2,514

 
$
1,237

 
$
1,400

 
 
 
 
 
 
 
 
Walk from GAAP earnings from operations to Non-GAAP earnings from operations, Adjusted EBITDA, and Adjusted EBITDA less net capital expenditures:
GAAP earnings from operations
$
1,946

 
$
3,903

 
$
745

 
$
648

Non-GAAP adjustments:
 
 
 
 
 
 
 
   Amortization of intangible assets
229

 
272

 
142

 
138

   Restructuring charges
197

 
417

 
200

 
152





   Acquisition and other related charges
84

 
145

 
79

 
94

   Separation costs
797

 
362

 
169

 
41

Defined benefit plan settlement charges and remeasurement (benefit)
(7
)
 
—

 
—

 
(16
)
   Gain on H3C and MphasiS divestitures
—

 
(2,420
)
 
—

 
—

Non-GAAP earnings from operations
$
3,246

 
$
2,679

 
$
1,335

 
$
1,057

 
 
 
 
 
 
 
 
EBITDA (Non-GAAP)
$
5,493

 
$
4,658

 
$
2,324

 
$
2,081

 
 
 
 
 
 
 
 
Adjusted EBITDA(1)
$
5,861

 
$
5,059

 
$
2,529

 
$
2,334

 


 
 
 
 
 


Adjusted EBITDA less net capital expenditures
$
3,130

 
$
2,545

 
$
1,292

 
$
934

 
(1)
Adjusted EBITDA represents EBITDA (Non-GAAP) plus stock-based compensation expense.





Hewlett Packard Enterprise Company and Subsidiaries
 Supplemental Unaudited Pro Forma Consolidated and Combined Financial Information
 
 
 
 
 
 
 
 
 
Fiscal year ended October 31,
 
Six months ended April 30,
 
2015
 
2016
 
2016
 
2017
 
(In millions)
Net Revenue by Business Unit and Segment:
 
 
 
 
 
 
 
Servers
$
14,202

 
$
13,813

 
$
7,034

 
$
6,094

Storage
3,180

 
3,235

 
1,645

 
1,429

Networking
2,863

 
2,820

 
1,658

 
1,131

Technology Services
8,266

 
7,911

 
4,004

 
3,914

Enterprise Group
28,511

 
27,779

 
14,341

 
12,568

Financial Services
3,216

 
3,190

 
1,564

 
1,695

Corporate Investments
684

 
591

 
348

 
—

Total segment net revenue
32,411

 
31,560

 
16,253

 
14,263

Eliminations
(1,334
)
 
(1,280
)
 
(635
)
 
(553
)
Total combined net revenue
$
31,077

 
$
30,280

 
$
15,618

 
$
13,710

 
 
 
 
 
 
 
 
Segment Earnings:
 
 
 
 
 
 
 
Enterprise Group
$
3,999

 
$
3,569

 
$
1,811

 
$
1,350

Segment operating margin
14.0
%
 
12.8
%
 
12.6
%
 
10.7
%
Financial Services
$
349

 
$
336

 
$
173

 
$
156

Segment operating margin
10.9
%
 
10.5
%
 
11.1
%
 
9.2
%
 


 


 


 


 
Fiscal year ended October 31,
 
Six months ended April 30,
 
2015
 
2016
 
2016
 
2017
 
(In millions)
Net Revenue by Geography:
 
 
 
 
 
 
 
Americas
$
12,855

 
$
13,047

 
$
6,290

 
$
6,065

Europe, Middle East and Africa
10,811

 
10,580

 
5,472

 
5,011

Asia Pacific
8,061

 
7,342

 
4,143

 
3,187

 
31,727

 
30,969

 
15,905

 
14,263

Corporate Investments and eliminations
(650
)
 
(689
)
 
(287
)
 
(553
)
Total combined net revenue
$
31,077

 
$
30,280

 
$
15,618

 
$
13,710

 
 
 
 
 
 
 
 
Net Revenue by Geography %:
 
 
 
 
 
 
 
Americas
41
%
 
42
%
 
40
%
 
43
%
Europe, Middle East and Africa
34
%
 
34
%
 
34
%
 
35
%
Asia Pacific
25
%
 
24
%
 
26
%
 
22
%



Hewlett Packard Enterprise Co Reports