Name: HP Inc. (NYSE:HPQ) | Cash Flow Statement
Creator: Stock Analysis on Net

Cash Flow Statement

The cash flow statement provides information about a company cash receipts and cash payments during an accounting period, showing how these cash flows link the ending cash balance to the beginning balance shown on the company balance sheet.

The cash flow statement consists of three parts: cash flows provided by (used in) operating activities, cash flows provided by (used in) investing activities, and cash flows provided by (used in) financing activities.

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HP Inc., consolidated cash flow statement

US$ in millions

12 months ended:	Oct 31, 2018	Oct 31, 2017	Oct 31, 2016	Oct 31, 2015	Oct 31, 2014	Oct 31, 2013
Net earnings	5,327)	2,526)	2,496)	4,554)	5,013)	5,113)
Depreciation and amortization	528)	354)	332)	4,061)	4,334)	4,611)
Stock-based compensation expense	268)	224)	182)	709)	560)	500)
Provision for doubtful accounts	—)	—)	65)	71)	55)	61)
Provision for inventory	—)	—)	95)	305)	211)	275)
Restructuring and other charges	132)	362)	200)	1,017)	1,619)	990)
Deferred taxes on earnings	(3,653)	238)	401)	(700)	(34)	(410)
Excess tax benefit from stock-based compensation	—)	—)	(6)	(145)	(58)	(2)
Other, net	319)	134)	(198)	1,031)	81)	443)
Accounts receivable	(491)	(453)	565)	572)	2,017)	530)
Financing receivables	—)	—)	—)	(65)	420)	484)
Inventory	(136)	(1,346)	(291)	(330)	(580)	(4)
Accounts payable	1,429)	2,161)	928)	31)	1,912)	541)
Taxes on earnings	389)	73)	106)	(137)	310)	417)
Restructuring and other	(237)	(233)	(157)	(1,243)	(1,506)	(904)
Other assets and liabilities	653)	(363)	(1,488)	(3,241)	(2,021)	(1,037)
Changes in operating assets and liabilities, net of acquisitions	1,607)	(161)	(337)	(4,413)	552)	27)
Adjustments to reconcile net earnings to net cash provided by operating activities	(799)	1,151)	734)	1,936)	7,320)	6,495)
Net cash provided by operating activities	4,528)	3,677)	3,230)	6,490)	12,333)	11,608)
Investment in property, plant and equipment	(546)	(402)	(433)	(3,603)	(3,853)	(3,199)
Proceeds from sale of property, plant and equipment	172)	69)	6)	424)	843)	653)
Purchases of available-for-sale securities and other investments	(367)	(1,400)	(126)	(259)	(1,086)	(1,243)
Maturities and sales of available-for-sale securities and other investments	847)	231)	133)	302)	1,347)	1,153)
Collateral posted for derivative instruments	(1,165)	(1,170)	—)	—)	—)	—)
Collateral returned for derivative instruments	1,379)	955)	—)	—)	—)	—)
Payments made in connection with business acquisitions, net of cash acquired	(1,036)	—)	(7)	(2,644)	(49)	(167)
Proceeds from business divestitures, net	—)	—)	475)	246)	6)	—)
Net cash (used in) provided by investing activities	(716)	(1,717)	48)	(5,534)	(2,792)	(2,803)
Proceeds from (payment of) short-term borrowings with original maturities less than 90 days, net	743)	202)	97)	74)	148)	(154)
Proceeds from short-term borrowings with original maturities greater than 90 days	712)	887)	—)	6,023)	—)	—)
Proceeds from debt, net of issuance costs	—)	5)	4)	14,735)	2,875)	279)
Payment of short term borrowings with original maturities greater than 90 days	(1,596)	(3)	—)	(6,296)	—)	—)
Payment of debt	(2,098)	(84)	(2,188)	(9,571)	(6,037)	(5,721)
Settlement of cash flow hedges	—)	(9)	4)	(4)	—)	—)
Net transfer of cash and cash equivalents to Hewlett Packard Enterprise Company	—)	—)	(10,375)	—)	—)	—)
Net proceeds related to stock-based award activities	52)	57)	—)	—)	—)	—)
Issuance of common stock under employee stock plans	—)	—)	48)	371)	297)	288)
Repurchase of common stock	(2,557)	(1,412)	(1,161)	(2,883)	(2,728)	(1,532)
Excess tax benefit from stock-based compensation	—)	—)	6)	145)	58)	2)
Cash dividends paid	(899)	(894)	(858)	(1,250)	(1,184)	(1,105)
Net cash provided by (used in) financing activities	(5,643)	(1,251)	(14,423)	1,344)	(6,571)	(7,943)
Increase (decrease) in cash and cash equivalents	(1,831)	709)	(11,145)	2,300)	2,970)	862)
Cash and cash equivalents at beginning of period	6,997)	6,288)	17,433)	15,133)	12,163)	11,301)
Cash and cash equivalents at end of period	5,166)	6,997)	6,288)	17,433)	15,133)	12,163)

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).

The financial performance from 2013 to 2018 is characterized by a significant structural transition occurring around 2016, which fundamentally altered the cash flow profile of the organization. Operating cash flows, which began at high levels exceeding 11 billion USD, experienced a sharp contraction by 2016 before beginning a gradual recovery.

Operating Activities and Earnings Quality: Net earnings exhibited volatility, peaking at 5.3 billion USD in 2018 after a notable trough in 2016. A critical shift is observed in depreciation and amortization, which fell from over 4 billion USD in 2015 to approximately 332 million USD in 2016, suggesting a substantial reduction in the asset base or a change in accounting structure. The net cash provided by operating activities showed a downward trend from 2013 to 2016, moving from 11.6 billion USD to 3.2 billion USD, though it recovered to 4.5 billion USD by 2018.
Investing Strategy and Capital Expenditure: Capital expenditures for property, plant, and equipment saw a dramatic decline, dropping from an average of over 3.5 billion USD between 2013 and 2015 to under 600 million USD between 2016 and 2018. This indicates a shift toward a less capital-intensive operational model. Strategic investments remained active, with a significant cash outflow of 2.6 billion USD for business acquisitions in 2015 and another 1 billion USD in 2018.
Financing and Capital Structure: Financing activities were dominated by a massive liquidity event in 2016, involving a net transfer of 10.3 billion USD to Hewlett Packard Enterprise Company. Debt management was highly active in 2015, with 14.7 billion USD in new debt proceeds offset by 9.5 billion USD in debt payments. Shareholder returns remained a priority throughout the period, with consistent common stock repurchases ranging from 1.1 billion USD to 2.8 billion USD annually and stable dividend payments hovering around 900 million to 1.2 billion USD.
Liquidity and Cash Position: The cash and cash equivalents position peaked in 2015 at 17.4 billion USD but declined sharply following the 2016 corporate separation. By October 31, 2018, the ending cash balance stood at 5.1 billion USD. The overall trend indicates a transition from a period of high liquidity and heavy capital investment to a leaner operational structure with a more moderate cash reserve.

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