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.

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).

Net Earnings: Net earnings show a fluctuating trend over the period analyzed. Starting at $5,113 million in 2013, there was a gradual decline reaching a low of $2,496 million in 2016. Earnings then slightly improved in 2017 and sharply increased to $5,327 million in 2018, indicating a strong recovery after a trough period.
Depreciation and Amortization: This item reveals a significant decline from $4,611 million in 2013 down to $332 million in 2016, followed by a modest increase to $528 million in 2018. Such a trend may reflect changes in asset base or accounting policies during these years.
Stock-Based Compensation Expense: The expense increased steadily from $500 million in 2013 to a peak of $709 million in 2015, then dropped to $182 million in 2016 before rising again to $268 million by 2018. This volatility could be associated with changes in employee incentive plans.
Provisions for Doubtful Accounts and Inventory: Provisions for doubtful accounts remain relatively stable around the $60-$70 million range until 2016, with data unavailable thereafter. Provision for inventory follows a similar pattern with slight variations, declining notably from $275 million in 2013 to $95 million in 2016, without subsequent data.
Restructuring and Other Charges: These charges exhibit high volatility, peaking at $1,619 million in 2014, then decreasing substantially to $132 million in 2018. This decline suggests a reduction in restructuring activities or other associated costs over time.
Deferred Taxes on Earnings: Deferred taxes fluctuate markedly, with negative values in some years (notably -$4,113 million in 2018) and positives in others, indicating tax adjustments or recognition of deferred tax assets/liabilities impacting earnings variably.
Other, Net: This item shows inconsistency, peaking at $1,031 million in 2015 and turning negative in 2016, then recovering by 2018. The volatility implies irregular or nonrecurring transactions affecting this line item.
Changes in Working Capital Components: Accounts receivable and payable demonstrate large swings. Accounts receivable rose sharply in 2014 but turned negative in the later years, whereas accounts payable increased notably in 2017 before declining again. Inventory primarily stays negative, indicating a reduction in inventory levels. Net changes in operating assets and liabilities show considerable fluctuation, with a major negative impact in 2015 (-$4,413 million) and recovery in 2018 (+$1,607 million).
Cash Flow from Operating Activities: Operating cash flow declines steadily from $11,608 million in 2013 to $3,230 million in 2016, then gradually recovers to $4,528 million in 2018. The significant drop coincides with net earnings and operational adjustments during these years.
Investment Activities: Investment in property, plant, and equipment (PPE) peaks in 2014 at nearly $3,853 million, then decreases sharply to below $600 million annually after 2015. Proceeds from sale of PPE generally decline but remain positive. Purchases of available-for-sale securities spike negatively in 2017 (-$1,400 million) but moderate in 2018. Net cash used in investing activities is largest in 2015 (-$5,534 million), with positive cash flow only in 2016 before returning to negative territory.
Financing Activities: Financing cash flow shows a negative balance in most years except 2015, indicating net use of cash for financing activities. Debt issuance peaked in 2015 with net proceeds of $14,735 million, followed by substantial repayments and fluctuations in short-term borrowings. Common stock repurchases increased over the period, notably accelerating in 2018 to $2,557 million.
Liquidity Position: Cash and cash equivalents increased through 2015, reaching $17,433 million, then declined sharply in 2016 to $6,288 million, followed by moderate fluctuations. The large decrease corresponds with a substantial net transfer of cash related to corporate restructuring activities and heavy investing outflows in 2016.
Overall Insights: The data signals a period of significant operational and financial adjustments, particularly around 2015-2016, marked by decreases in earnings, operating cash flows, and liquidity. Restructuring charges, asset base changes, and tax adjustments contributed to volatility. Recovery trends appear in the latter years, with improving net earnings and operating cash flows. Investment activities show a scaling back post-2015, while financing strategies emphasize debt management and increased share repurchases. The company's cash position reflects these dynamics with notable swings over the timeframe.

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HP Inc. (NYSE:HPQ)

Cash Flow Statement