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How to get your
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Micro Focus "Seattle SpinCo" US tax liability on 2017 return.
Hewlett Packard Enterprise shareholders received
stock in Micro Focus, a UK company, in the September
spinoff of the software business -- and may have realized gains reportable on their 2017 tax returns.
Micro Focus stock issues
Micro Focus UK and US Headquarters (scroll down) Other
Summary of Micro Focus business and employment outlook: Expects to increase revenue for the HPE products from $185K/employee to
$273K/employee -- counting "all full time employees, contractors, a
headcount transfer from the HPE Global Marketing Team and estimates for
staff transferring from central corporate functions."
New CEO of Micro Focus was former COO of HPE. Pre-merger 4,500
employees. HPES added roughly 14,000 employees.
"Since the interim
results on 8 January 2018, the rate of year-on-year revenue
decline has been greater than anticipated." CFO and CEO
MFGP stock price history
article summarizing breakup of Hewlett-Packard into HP Inc,
Hewlett Packard Enterprise, DXC, and Micro Focus.
– what to do before losing access to company internal
systems... and in the following few weeks.
and HPE options
am I a former employee or retiree of? HPI, or HPE, or
For those transitioning to Micro Focus:
401(k) Members report that the next 401(k) match payout
will be on the date of their transition.
- You are classified as a former employee or retiree of HPE. Treated as though you
left HPE to join any other company. Entitled to whatever retiree
coverage you qualified for at the time you left HPE. (If qualified for
"Pre-2003" retirement program,
classified as a retiree of HPE but medical benefits
administered by HPI.)
About the company's business strategy and employment
Specializes in "sticky" mature corporate infrastructure
software with recurring license and maintenance revenue.
To subscribe to information from Micro Focus:
January 8, 2018:
"Severance and legal
costs of $9.8m for the six months ended 31 October 2017
(2016: $4.0m) relate mostly to termination costs for HPE
Software employees after acquisition."
in the six months to 31 October 2017 were $1,234.5m ...with
HPE Software contributing $569.8m..."
growth of $549.8m (80.3%) driven by:
- Acquisition of HPE Software contributed $569.8m;
- SUSE Product Portfolio where reported revenues grew by
11.5% and CCY revenues grew in line with the market for
- Offset by anticipated declines in the existing Micro Focus
Product Portfolio which declined by 6.9%."
Interim Results January 8, 2018
July 2017 Micro Focus stock prospectus:
"The Micro Focus Group has more than 4,500 employees in over
90 global locations" (page 4)
"HPE Software had approximately 12,200 regular active
employees as of 31 October 2016. Upon Completion, HPE
Software’s total headcount will also include certain staff
transferring from the HPE Global Marketing Team and central
corporate functions of HPE in the Separation. Including
these employees, the total headcount for HPE Software would
have comprised approximately 16,900 employees as of 31
October 2016." (page 137)
"As part of the 2015 Plan, it is expected up to
approximately 2,900 employees will exit Seattle [HPE
Software] by the end of 2018. The changes to the workforce
will vary by country, based on local legal requirements and
consultations with employee works councils and other
employee representatives, as appropriate." (page 195)
There are country-by-country employee-count breakdowns for
Micro Focus and HPE Software on pages 273-276. (For example,
in Norway, Micro Focus has 2 employees and HPE Software 10.)
The various stock incentive plans for both companies are
detailed on pages 293-304.
Micro Focus Stock Prospectus
July 2017 Micro Focus analyst presentation:
Autonomy products less than 10% of HPE Software
revenues, mainly SaaS (page 8)
Organization chart -- color-coded as to whether from HPE
or Micro Focus (page 10)
Software Integration Planning Update (page 28) No
mention of HPE-related headcount.
Micro Focus Analyst Presentation
Micro Focus financial results:
September 2016 the Company announced it had agreed with
Hewlett Packard Enterprises [sic] ("HPE") to merge with
the software business assets of HPE ("HPE Software") by
way of merger with a wholly owned subsidiary of HPE. The
transaction is expected to complete at the beginning of
September this year with the listing of consideration
shares on the London Stock Exchange ("LSE") and the
simultaneous listing of the American Depositary Shares
("ADS") on the New York Stock Exchange ("NYSE")...
"Mergers and acquisitions continue to be a key component
of our strategy. Whilst the key strategic announcement
in the period was the HPE Software transaction we also
completed the acquisitions of Serena, GWAVA Inc.,
OpenATTIC, and the OpenStack IaaS and Cloud Foundry PaaS
talent and technology assets. Over the last six years we
have completed and successfully integrated 10
acquisitions and on completion of the HPE Software
transaction will have increased the revenue of the
business approximately 10 fold since 2011.
"John Schultz, the Executive Vice President
and General Counsel of HPE, will join the board... Chris Hsu
[former HPE COO], who will become CEO of Micro Focus
upon Completion, will join the board at that time.
--results for the year ended 30 April 2017 (Published 12
Micro Focus results
Find out what Micro Focus is telling Wall Street about
employment prospects and strategic issues that will
affect your career. You can read the most
recent announcements at
Micro Focus Presentations
The company's strategy over the past nine
years has been to acquire software product lines -- such as Novell,
Attachmate, Borland, and Compuware -- which have "lost value chasing
Diagram of Micro Focus product
history, including the product lines being acquired from HPE --
Peregrine, Mercury, Opsware, Tower, ArcSight, Vertica, Autonomy --
with the original HP acquisition price for each.
MicroFocus-HPES Portfolio 4/1/17
"Micro Focus believes it is possible to
improve the margin delivered by HPE Software's mature software assets to
Micro Focus’ level by Apr-2021."
The company expects to increase revenue for the HPE products from $185K/employee to
$273K/employee, counting "all full time employees, contractors, a
headcount transfer from the HPE Global Marketing Team and estimates for
staff transferring from central corporate functions." (page 27)
Micro Focus Lender Presentation
April 4, 2017
"We identified areas of the business that were not aligned
with our go-forward strategy... Application Delivery
Management, Big Data, Enterprise Security, Information
Management & Governance and IT Operations Management
businesses... Micro Focus’s approach to managing both
growing and mature software assets will ensure higher levels
of investment in growth areas like big data analytics and
security, while maintaining a stable platform for
mission-critical software products that customers rely on...
"For employees, Micro Focus’s approach will mean each product
line will have a clear and important role in the overall
company performance, and employees will have a high level of
clarity on the strategy for their organization. It also
means employees will get to work on long-term,
customer-focused projects -- and the software technology
that they love."
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