SEC Comment Letter for Hewlett Packard Enterprise Co (HPE, HPE-PC) (CIK 0001645590) (HPE) — Sep 23, 2015
Hewlett Packard Enterprise Co (HPE, HPE-PC) (CIK 0001645590)
Date: Sept. 23, 2015 · CIK: 0001645590 · Accession: 0000000000-15-046816
AI Filing Summary & Sentiment
Referenced dates: August 10, 2015
Letter
Mail Stop 4561 September 22, 2015 Margaret C. Whitman, Chief Executive Officer Hewlett Packard Enterprise Company 3000 Hanover Street Palo Alto, California, 94304
Re: Hewlett Packard Enterprise Company Amendment No. 2 to Form 10 Filed September 4, 2015 Amendment No. 3 to Form 10 Filed September 15, 2015 File No. 001 -37483
Dear Ms. Whitman:
We have reviewed your amendments and have the following comments. Where we refer to page numbers we are referring to the pagination of you r amendment filed on September 15, 2015. In some of our comments, we may ask you to provide us with information so we may better understand your disclosure.
Please respond to this letter by amending your registration statement and providing the requested information. If you do not believe our comments apply to your facts and circumstances or do not believe an amendment is appropriate, please tell us why in your response.
After reviewing any amendment to your registration statement and the information you provide in response to these comments, we may have additional comments. Unless we note otherwise, our references to prior comm ents are to comments in our August 28, 2015 letter.
Information Statement Summary
The Separation and Distribution, page 5
1. We note your revisions in response to prior comment 2 where you include total debt and unsecured revolving credit facility amounts . Please revise to disclose oth er relevant terms as they are finalized, including repayment terms, interest rates and any sig nificant debt covenants. Additionally, to the extent such information is available prior to effectiveness of your filing, expand your discussion here, and elsewhere as appropriate, to quantify th e portion of notes that you may issue to HP Co. as partial c onsideration for the transfer of assets.
Margaret C. Whitman Hewlett Packard Enterprise Company September 22, 2015 Page 2
Unaudited Pro Forma Combined Financial Statements, page 41
2. We note your disclosures on page 6 and 172 that you anticipate issuing senior notes, possibly in combination with commercial paper programs and other short -term debt issuances, such that $16 billion in total debt is outstanding as of the distribution date, and that you may issue a portion of these notes to HP Co. as partial consideration for the transfer of assets from HP Co. to you and not for cash. Howeve r, we note your disclosure on page 46 that you may also undertake debt exchanges with respect to certain of HP Co.’s existing debt obligations. Clarify whether you still expect to undertake debt exchanges with respect to certain of HP Co.’s existing debt obligations, and the specific debt that will be exchanged.
3. We note your disclosure on page 6 that you intend to use the net proceeds from the sale of senior notes to finance the payment of a distribution to HP Co. in connection with the separation. Revise your disclosures to explain how this distribution has been reflected and disclosed in your pro forma financial statements. Clarify whether the adjustment to parent company investments account represents this distribution. In addition, disclose how the $16 billion proceeds will be used in order to reconcile to t he $8.7 of cash and cash equivalents that remain.
4. We note your revised disclosure on page 48 that as of July 31, 2015 you expect to incur future separation costs of up to $ 0.6 billion during the remainder of fiscal 2015 and 2016. In addition, you expe ct to make net foreign tax payments arising from the separation over the same period. We note that you had previously disclosed in your amendment filed on August 5, 2015 that as of April 30, 2015, you expected future cash payments of up to $1.5 billion in connection with your separation costs and net foreign tax payments. Clarify why your disclosure no longer includes an estimate of foreign tax payments that you expect to pay arising from the separation.
5. We note your response to prior comment 17 from yo ur letter dated August 10, 2015 that the Company will incorporate the effects of the referenced agreements, if necessary, as pro forma adjustments in a subsequent amendment to the registration statement, once the information becomes available. Please tell us the status of these agreements and your consideration of pro forma adjustments.
Management’s Discussion and Analysis of Financial Condition and Results of Operations, page 51
6. We note your disclosure in note 18 to your financial statements stating t hat your parent recently approved a restructuring plan in connection with the separation that will result in aggregate pre -tax charges between fiscal 2016 and 2018 of approximately $2.7 billion to be taken by the Company. Please revise your disclosure her e, and elsewhere in the filing where you discuss the separation plan , to disclose the material terms of the restructuring plan, including the business segments that are expected to be impacted, the resulting
Margaret C. Whitman Hewlett Packard Enterprise Company September 22, 2015 Page 3
financial charges, whether you expect to exit an y lines of business, and the expected impact on future revenues. In addition, include similar disclosures within your pro forma combined financial statements and ensure that you distinguish clearly this plan from the 2012 restructuring plan.
Liquidity and Capital Resources, page 80
7. We note your response to prior comment 28 from your letter dated August 10, 2015 that once the Company has determined which jurisdictions will hold the approximately $10 billion of post -separation cash, it will re -evaluate w hether additional disclosure is appropriate. Please tell us the status of this determination and your consideration of additional disclosure.
You may contact Amanda Kim, Staff Accountant, at (202) 551 -3241 or Laura Veator, Senior Staff Accountant, at ( 202) 551 -3716, if you have questions regarding comments on the financial statements and related matters. Please contact Ivan Griswold, Attorney -Adviser, at (202) 551 -3853 or me at (202) 551 -3487 with any other questions.
Sincerely,
/s/ Barbara C. Jacobs
Show Raw Text
Mail Stop 4561
September 22, 2015
Margaret C. Whitman, Chief Executive Officer
Hewlett Packard Enterprise Company
3000 Hanover Street
Palo Alto, California, 94304
Re: Hewlett Packard Enterprise Company
Amendment No. 2 to Form 10
Filed September 4, 2015
Amendment No. 3 to Form 10
Filed September 15, 2015
File No. 001 -37483
Dear Ms. Whitman:
We have reviewed your amendments and have the following comments. Where we refer
to page numbers we are referring to the pagination of you r amendment filed on September 15,
2015. In some of our comments, we may ask you to provide us with information so we may
better understand your disclosure.
Please respond to this letter by amending your registration statement and providing the
requested information. If you do not believe our comments apply to your facts and
circumstances or do not believe an amendment is appropriate, please tell us why in your
response.
After reviewing any amendment to your registration statement and the information you
provide in response to these comments, we may have additional comments. Unless we note
otherwise, our references to prior comm ents are to comments in our August 28, 2015 letter.
Information Statement Summary
The Separation and Distribution, page 5
1. We note your revisions in response to prior comment 2 where you include total debt and
unsecured revolving credit facility amounts . Please revise to disclose oth er relevant
terms as they are finalized, including repayment terms, interest rates and any sig nificant
debt covenants. Additionally, to the extent such information is available prior to
effectiveness of your filing, expand your discussion here, and elsewhere as appropriate,
to quantify th e portion of notes that you may issue to HP Co. as partial c onsideration for
the transfer of assets.
Margaret C. Whitman
Hewlett Packard Enterprise Company
September 22, 2015
Page 2
Unaudited Pro Forma Combined Financial Statements, page 41
2. We note your disclosures on page 6 and 172 that you anticipate issuing senior notes,
possibly in combination with commercial paper programs and other short -term debt
issuances, such that $16 billion in total debt is outstanding as of the distribution date, and
that you may issue a portion of these notes to HP Co. as partial consideration for the
transfer of assets from HP Co. to you and not for cash. Howeve r, we note your disclosure
on page 46 that you may also undertake debt exchanges with respect to certain of HP
Co.’s existing debt obligations. Clarify whether you still expect to undertake debt
exchanges with respect to certain of HP Co.’s existing debt obligations, and the specific
debt that will be exchanged.
3. We note your disclosure on page 6 that you intend to use the net proceeds from the sale
of senior notes to finance the payment of a distribution to HP Co. in connection with the
separation. Revise your disclosures to explain how this distribution has been reflected
and disclosed in your pro forma financial statements. Clarify whether the adjustment to
parent company investments account represents this distribution. In addition, disclose
how the $16 billion proceeds will be used in order to reconcile to t he $8.7 of cash and
cash equivalents that remain.
4. We note your revised disclosure on page 48 that as of July 31, 2015 you expect to incur
future separation costs of up to $ 0.6 billion during the remainder of fiscal 2015 and 2016.
In addition, you expe ct to make net foreign tax payments arising from the separation over
the same period. We note that you had previously disclosed in your amendment filed on
August 5, 2015 that as of April 30, 2015, you expected future cash payments of up to
$1.5 billion in connection with your separation costs and net foreign tax payments.
Clarify why your disclosure no longer includes an estimate of foreign tax payments that
you expect to pay arising from the separation.
5. We note your response to prior comment 17 from yo ur letter dated August 10, 2015 that
the Company will incorporate the effects of the referenced agreements, if necessary, as
pro forma adjustments in a subsequent amendment to the registration statement, once the
information becomes available. Please tell us the status of these agreements and your
consideration of pro forma adjustments.
Management’s Discussion and Analysis of Financial Condition and Results of Operations,
page 51
6. We note your disclosure in note 18 to your financial statements stating t hat your parent
recently approved a restructuring plan in connection with the separation that will result in
aggregate pre -tax charges between fiscal 2016 and 2018 of approximately $2.7 billion to
be taken by the Company. Please revise your disclosure her e, and elsewhere in the filing
where you discuss the separation plan , to disclose the material terms of the restructuring
plan, including the business segments that are expected to be impacted, the resulting
Margaret C. Whitman
Hewlett Packard Enterprise Company
September 22, 2015
Page 3
financial charges, whether you expect to exit an y lines of business, and the expected
impact on future revenues. In addition, include similar disclosures within your pro forma
combined financial statements and ensure that you distinguish clearly this plan from the
2012 restructuring plan.
Liquidity and Capital Resources, page 80
7. We note your response to prior comment 28 from your letter dated August 10, 2015 that
once the Company has determined which jurisdictions will hold the approximately $10
billion of post -separation cash, it will re -evaluate w hether additional disclosure is
appropriate. Please tell us the status of this determination and your consideration of
additional disclosure.
You may contact Amanda Kim, Staff Accountant, at (202) 551 -3241 or Laura Veator,
Senior Staff Accountant, at ( 202) 551 -3716, if you have questions regarding comments on the
financial statements and related matters. Please contact Ivan Griswold, Attorney -Adviser, at
(202) 551 -3853 or me at (202) 551 -3487 with any other questions.
Sincerely,
/s/ Barbara C. Jacobs
Barbara C. Jacobs
Assistant Director
Office of Information Technologies
and Services
cc: Benjamin M. Roth, Esq.
Wachtell, Lipton, Rosen & Katz