Name: Hewlett Packard Enterprise Co. (NYSE:HPE) | 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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Hewlett Packard Enterprise Co., consolidated cash flow statement

US$ in millions

12 months ended:	Oct 31, 2023	Oct 31, 2022	Oct 31, 2021	Oct 31, 2020	Oct 31, 2019	Oct 31, 2018
Net earnings (loss) attributable to HPE	2,025)	868)	3,427)	(322)	1,049)	1,908)
Depreciation and amortization	2,616)	2,480)	2,597)	2,625)	2,535)	2,576)
Impairment of goodwill	—)	905)	—)	865)	—)	88)
Stock-based compensation expense	428)	391)	382)	274)	268)	286)
Provision for inventory and doubtful accounts	230)	262)	176)	308)	240)	198)
Restructuring charges	242)	214)	620)	769)	221)	550)
Deferred taxes on earnings	(67)	(249)	(167)	(294)	1,079)	2,229)
Earnings from equity interests	(245)	(215)	(180)	(67)	(20)	(38)
Dividends received from equity investees	200)	197)	184)	165)	156)	164)
Other, net	31)	310)	202)	163)	204)	(158)
Accounts receivable	577)	(186)	(591)	(461)	374)	(220)
Financing receivables	(607)	694)	(165)	(487)	(410)	(366)
Inventory	400)	(713)	(1,959)	(527)	46)	(260)
Accounts payable	(1,655)	1,707)	1,608)	(225)	(525)	(27)
Taxes on earnings	(34)	150)	(73)	(122)	(1,093)	(4,516)
Restructuring	(275)	(334)	(527)	(478)	(331)	(647)
Other assets and liabilities	562)	(1,888)	337)	54)	204)	1,197)
Changes in operating assets and liabilities, net of acquisitions	(1,032)	(570)	(1,370)	(2,246)	(1,735)	(4,839)
Adjustments to reconcile net Net earnings (loss) attributable to HPE to net cash provided by operating activities	2,403)	3,725)	2,444)	2,562)	2,948)	1,056)
Net cash provided by operating activities	4,428)	4,593)	5,871)	2,240)	3,997)	2,964)
Investment in property, plant and equipment	(2,828)	(3,122)	(2,502)	(2,383)	(2,856)	(2,956)
Proceeds from sale of property, plant and equipment	602)	602)	354)	703)	597)	1,094)
Purchases of investments	(15)	(55)	(60)	(101)	(39)	(33)
Proceeds from maturities and sales of investments	9)	262)	15)	48)	26)	98)
Financial collateral posted	(1,443)	(148)	(903)	(644)	(403)	(1,547)
Financial collateral received	1,152)	374)	805)	665)	744)	1,467)
Payments made in connection with business acquisitions, net of cash acquired	(761)	—)	(505)	(866)	(1,526)	(207)
Proceeds from business divestitures, net	—)	—)	—)	—)	—)	13)
Net cash used in investing activities	(3,284)	(2,087)	(2,796)	(2,578)	(3,457)	(2,071)
Short-term borrowings with original maturities less than 90 days, net	(47)	100)	(36)	(9)	(53)	5)
Proceeds from debt, net of issuance costs	4,725)	3,296)	3,022)	7,007)	3,517)	2,457)
Payment of debt	(4,887)	(3,992)	(5,465)	(5,099)	(2,203)	(4,138)
Cash settlement for derivative hedging debt	(7)	(8)	—)	—)	—)	—)
Net proceeds (payments) related to stock-based award activities	(106)	(53)	(29)	(36)	48)	116)
Repurchase of common stock	(421)	(512)	(213)	(355)	(2,249)	(3,568)
Net transfer of cash and cash equivalents to Everett	—)	—)	—)	—)	—)	(41)
Net transfer of cash and cash equivalents from Seattle	—)	—)	—)	—)	—)	156)
Cash dividends paid to non-controlling interests, net of contributions	—)	(6)	(18)	(7)	—)	(9)
Cash dividends paid to shareholders	(619)	(621)	(625)	(618)	(608)	(570)
Net cash provided by (used in) financing activities	(1,362)	(1,796)	(3,364)	883)	(1,548)	(5,592)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash	36)	(279)	—)	—)	—)	—)
Increase (decrease) in cash, cash equivalents and restricted cash	(182)	431)	(289)	545)	(1,008)	(4,699)
Cash, cash equivalents and restricted cash at beginning of period	4,763)	4,332)	4,621)	4,076)	5,084)	9,579)
Cash, cash equivalents and restricted cash at end of period	4,581)	4,763)	4,332)	4,621)	4,076)	4,880)

Based on: 10-K (reporting date: 2023-10-31), 10-K (reporting date: 2022-10-31), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-10-31), 10-K (reporting date: 2019-10-31), 10-K (reporting date: 2018-10-31).

The analysis of cash flow activities over the six-year period reveals a company managing significant capital requirements while maintaining stable shareholder distributions. Operating cash flows have remained positive despite volatility in net earnings, indicating a robust ability to generate cash from core business activities.

Operating Cash Flow Dynamics: Net cash provided by operating activities experienced significant fluctuation, peaking at 5,871 million US$ in 2021. While net earnings were volatile—including a loss of 322 million US$ in 2020—cash flow remained resilient, bolstered by consistent non-cash charges. Depreciation and amortization remained stable, averaging approximately 2.5 billion US$ annually. A notable trend is the consistent negative impact of changes in operating assets and liabilities, which peaked as a cash outflow of 4,839 million US$ in 2018 before moderating to 1,032 million US$ by 2023.
Investing Activity and Capital Allocation: Investing activities consistently resulted in net cash outflows, ranging from 2,071 million US$ to 3,457 million US$ annually. This trend is primarily driven by sustained investment in property, plant, and equipment, which typically exceeded 2.3 billion US$ per year. These expenditures were partially offset by proceeds from the sale of property, plant, and equipment, which averaged between 354 million US$ and 1,094 million US$. Business acquisitions also represented a periodic cash drain, most significantly in 2019 with a net outflow of 1,526 million US$.
Financing Strategy and Shareholder Returns: Financing activities demonstrate a reliance on debt markets to manage liquidity and fund operations. Debt proceeds were particularly high in 2020, reaching 7,007 million US$, which offset substantial debt repayments of 5,099 million US$ in the same period. Shareholder returns via dividends remained remarkably consistent, with annual payments holding steady between 570 million US$ and 625 million US$. Conversely, stock repurchases saw a sharp decline from a peak of 3,568 million US$ in 2018 to 421 million US$ by 2023, suggesting a shift in capital allocation priorities away from aggressive buybacks.
Liquidity and Cash Position: The company's overall liquidity position stabilized following a sharp decline between 2018 and 2019. After ending 2018 with 4,880 million US$, the cash, cash equivalents, and restricted cash balances have fluctuated within a narrow range, ending the 2023 period at 4,581 million US$. This suggests a disciplined approach to maintaining a baseline liquidity level despite the varying demands of investing and financing activities.

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