Balance Sheet: Liabilities and Stockholders’ Equity

The balance sheet provides creditors, investors, and analysts with information on company resources (assets) and its sources of capital (its equity and liabilities). It normally also provides information about the future earnings capacity of a company assets as well as an indication of cash flows that may come from receivables and inventories.

Liabilities represents obligations of a company arising from past events, the settlement of which is expected to result in an outflow of economic benefits from the entity.

HP Inc., consolidated balance sheet: liabilities and stockholders’ equity

US$ in millions

	Oct 31, 2018	Oct 31, 2017	Oct 31, 2016	Oct 31, 2015	Oct 31, 2014	Oct 31, 2013
Notes payable and short-term borrowings	1,463)	1,072)	78)	2,885)	3,486)	5,979)
Accounts payable	14,816)	13,279)	11,103)	15,956)	15,903)	14,019)
Employee compensation and benefits	1,136)	894)	759)	3,608)	4,209)	4,436)
Taxes on earnings	340)	214)	231)	830)	1,017)	1,203)
Accrued restructuring	—)	—)	—)	689)	898)	901)
Other accrued taxes	982)	895)	755)	2,371)	2,269)	2,703)
Warranty	673)	660)	729)	1,147)	1,325)	1,390)
Deferred revenue	1,095)	1,012)	919)	6,199)	6,143)	6,477)
Sales and marketing programs	2,758)	2,441)	2,312)	3,089)	2,986)	2,823)
Other	1,868)	1,945)	1,922)	5,417)	5,499)	5,590)
Other accrued liabilities	7,376)	6,953)	6,637)	18,223)	18,222)	18,983)
Current liabilities	25,131)	22,412)	18,808)	42,191)	43,735)	45,521)
Long-term debt, excluding current portion	4,524)	6,747)	6,758)	21,780)	16,039)	16,608)
Pension, post-retirement, and post-employment liabilities	1,645)	1,999)	2,705)	5,630)	6,379)	5,098)
Deferred tax liability	100)	1,410)	1,116)	295)	1,124)	2,668)
Tax liability	2,063)	2,005)	1,910)	2,593)	2,861)	2,213)
Deferred revenue	1,005)	921)	865)	4,373)	3,931)	3,907)
Other	793)	827)	737)	1,869)	2,010)	2,005)
Other non-current liabilities	5,606)	7,162)	7,333)	14,760)	16,305)	15,891)
Non-current liabilities	10,130)	13,909)	14,091)	36,540)	32,344)	32,499)
Total liabilities	35,261)	36,321)	32,899)	78,731)	76,079)	78,020)
Preferred stock, $0.01 par value; none issued	—)	—)	—)	—)	—)	—)
Common stock, $0.01 par value	16)	16)	17)	18)	18)	19)
Additional paid-in capital	663)	380)	1,030)	1,963)	3,430)	5,465)
Retained earnings (accumulated deficit)	(473)	(2,386)	(3,498)	32,089)	29,164)	25,563)
Accumulated other comprehensive loss	(845)	(1,418)	(1,438)	(6,302)	(5,881)	(3,778)
Total HP stockholders’ equity (deficit)	(639)	(3,408)	(3,889)	27,768)	26,731)	27,269)
Non-controlling interests	—)	—)	—)	383)	396)	387)
Total stockholders’ equity (deficit)	(639)	(3,408)	(3,889)	28,151)	27,127)	27,656)
Total liabilities and stockholders’ equity (deficit)	34,622)	32,913)	29,010)	106,882)	103,206)	105,676)

Based on: 10-K (reporting date: 2018-10-31), 10-K (reporting date: 2017-10-31), 10-K (reporting date: 2016-10-31), 10-K (reporting date: 2015-10-31), 10-K (reporting date: 2014-10-31), 10-K (reporting date: 2013-10-31).

Current Liabilities: Current liabilities demonstrate a notable decline between 2013 and 2016, dropping from $45.5 billion to $18.8 billion. Following this reduction, current liabilities increased gradually in 2017 and 2018, reaching $25.1 billion. This trend is reflected across many components such as notes payable and short-term borrowings, which fell sharply to $78 million in 2016 before rising to $1.46 billion in 2018. Accounts payable show a similar pattern, with a significant dip in 2016 and a subsequent steady recovery.
Long-Term Debt and Non-Current Liabilities: Long-term debt, excluding the current portion, exhibits volatility with an initial increase from $16.6 billion in 2013 to $21.8 billion in 2015 followed by a steep decline to $4.5 billion in 2018. Non-current liabilities also show a substantial decrease, particularly after 2015, falling from $36.5 billion to $10.1 billion in 2018. The reduction in long-term debt and non-current liabilities likely contributed significantly to the total liabilities decline observed after 2015.
Total Liabilities: Total liabilities remained relatively stable from 2013 to 2015, fluctuating around $78 billion. However, beginning in 2016, total liabilities fell dramatically to $32.9 billion, before inclining slightly to $35.3 billion by 2018. This substantial reduction coincides with decreases in both current and non-current liabilities, indicating a strategic effort to reduce overall indebtedness and obligations during that period.
Employee Compensation, Taxes, and Accruals: Employee compensation and benefits expenses dropped sharply from $4.4 billion in 2013 to under $1.1 billion in 2018, with the most pronounced decline occurring in 2016. Taxes on earnings followed a similar decreasing trend, reaching a low point in 2017 but rising slightly in 2018. Various accrued liabilities, including restructuring, other accrued taxes, and warranty liabilities, generally decreased over the periods, especially after 2015, which aligns with the overall contracting liabilities profile.
Revenue-Related Accruals: Deferred revenue shows a strong decline from about $6.5 billion in 2013 to around $900 million in 2016, followed by a modest increase through 2018. This decrease may reflect changes in billing practices or recognition policies affecting liability classification related to customer advances and obligations.
Stockholders’ Equity and Capital Structure: Stockholders’ equity displays a marked downturn starting in 2016, shifting from a positive equity position around $27 billion in 2015 to a deficit reaching nearly $0.6 billion by 2018. Retained earnings shifted from a sizable positive balance to a deficit over the same period, indicating losses or distributions exceeding earnings. Additional paid-in capital also diminished significantly. These changes suggest financial stress or restructuring impacting equity, possibly coinciding with the large liability reductions.
Total Liabilities and Stockholders’ Equity: The sum of total liabilities and stockholders' equity mirrors the liability trends, decreasing sharply from above $105 billion in 2015 to about $29 billion in 2016. A gradual increase was seen up to $34.6 billion in 2018. This movement reflects the substantial changes in both liabilities and equity, pointing to major balance sheet restructuring and shifts in financing strategy during these years.

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HP Inc. (NYSE:HPQ)

Balance Sheet: Liabilities and Stockholders’ Equity