HP INC - FORM 8-K - EX-99.2 - EXHIBIT 99.2 - August 18, 2011

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8-K - Q32011 FORM 8-K - HP INCq3form8-k_082011.htm
EX-99.1 - EXHIBIT 99.1 - HP INCex99-1_082011.htm
EX-99.4 - EXHIBIT 99.4 - HP INCex99-4_082011.htm
EX-99.3 - EXHIBIT 99.3 - HP INCex99-3_082011.htm
EXHIBIT 99.2
 
HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS
(Unaudited)
(In millions except per share amounts)
                   
                   
   
Three months ended
   
July 31,
2011
  
April 30,
2011
  
July 31,
2010
                   
Net revenue
   $ 31,189     $ 31,632     $ 30,729  
                         
Costs and Expenses: (a)
                        
             Cost of sales
     23,929       23,860       23,365  
             Research and development
     812       815       742  
             Selling, general and administrative
     3,402       3,397       3,191  
             Amortization of purchased intangible assets
     358       413       383  
             Restructuring charges
     150       158       598  
             Acquisition-related charges
     18       21       127  
                      Total costs and expenses
     28,669       28,664       28,406  
                         
Earnings from operations
     2,520       2,968       2,323  
                         
Interest and other, net
     (121 )     (76 )     (134 )
                         
Earnings before taxes
     2,399       2,892       2,189  
                         
Provision for taxes
     473       588       416  
                         
Net earnings
   $ 1,926     $ 2,304     $ 1,773  
                         
Net earnings per share:
                        
             Basic
   $ 0.94     $ 1.07     $ 0.76  
             Diluted
   $ 0.93     $ 1.05     $ 0.75  
                         
Cash dividends declared per share
   $ 0.24     $ -     $ 0.16  
                         
Weighted-average shares used to compute net earnings per share:
          
             Basic
     2,054       2,150       2,322  
             Diluted
     2,080       2,184       2,376  
 
(a)  In connection with organizational realignments implemented in the first quarter of fiscal 2011, certain costs previously reported as Cost of Sales have been reclassified as Selling, General and Administrative expenses to better align those costs with the functional areas that benefit from those expenditures.

 
1
 
 
 
HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS
(Unaudited)
(In millions except per share amounts)
             
             
   
Nine months ended
   
July 31,
   
2011
  
2010
             
Net revenue
   $ 95,123     $ 92,755  
                 
Costs and expenses: (a)
                
             Cost of sales
     72,197       70,961  
             Research and development
     2,425       2,145  
             Selling, general and administrative
     9,889       9,254  
             Amortization of purchased intangible assets
     1,196       1,060  
             Restructuring charges
     466       909  
             Acquisition-related charges
     68       242  
                      Total costs and expenses
     86,241       84,571  
                 
Earnings from operations
     8,882       8,184  
                 
Interest and other, net
     (294 )     (424 )
                 
Earnings before taxes
     8,588       7,760  
                 
Provision for taxes
     1,753       1,537  
                 
Net earnings
   $ 6,835     $ 6,223  
                 
Net earnings per share:
                
             Basic
   $ 3.21     $ 2.66  
             Diluted
   $ 3.16     $ 2.60  
                 
Cash dividends declared per share
   $ 0.40     $ 0.32  
                 
Weighted-average shares used to compute net earnings per share:
          
             Basic
     2,129       2,342  
             Diluted
     2,161       2,398  
 
(a)
In connection with organizational realignments implemented in the first quarter of fiscal 2011, certain costs previously reported as Cost of Sales have been reclassified as Selling, General and Administrative expenses to better align those costs with the functional areas that benefit from those expenditures.

 
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HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(In millions)
             
             
   
July 31,
2011
  
October 31,
2010
   
(unaudited)
        
ASSETS
            
             
Current assets:
            
             Cash and cash equivalents
   $ 12,953     $ 10,929  
             Accounts receivable
     18,121       18,481  
             Financing receivables
     3,167       2,986  
             Inventory
     7,427       6,466  
             Other current assets
     14,611       15,322  
                      Total current assets
     56,279       54,184  
                 
Property, plant and equipment
     11,959       11,763  
                 
Long-term financing receivables and other assets
     11,178       12,225  
                 
Goodwill and purchased intangible assets
     45,501       46,331  
                 
Total assets
   $ 124,917     $ 124,503  
                 
                 
LIABILITIES AND STOCKHOLDERS' EQUITY
                
                 
Current liabilities:
                
             Notes payable and short-term borrowings
   $ 6,666     $ 7,046  
             Accounts payable
     14,489       14,365  
             Employee compensation and benefits
     3,728       4,256  
             Taxes on earnings
     788       802  
             Deferred revenue
     7,390       6,727  
             Other accrued liabilities
     15,877       16,207  
                      Total current liabilities
     48,938       49,403  
                 
Long-term debt
     19,030       15,258  
                 
Other liabilities
     17,731       19,061  
                 
Stockholders' equity:
                
             HP stockholders' equity
     38,823       40,449  
             Non-controlling interests
     395       332  
                      Total stockholders' equity
     39,218       40,781  
                 
Total liabilities and stockholders' equity
   $ 124,917     $ 124,503  
                 

 
3
 
 
 
  HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
  SEGMENT INFORMATION
  (Unaudited)
  (In millions)
                     
     
Three months ended
     
July 31,
2011
  
April 30,
2011
  
July 31,
2010
                     
Net revenue: (a)
                  
 
Services
   $ 9,089     $ 8,977     $ 8,772  
 
Enterprise Servers, Storage and Networking
     5,396       5,556       5,021  
 
HP Software
     780       764       650  
 
Personal Systems Group
     9,592       9,415       9,918  
 
Imaging and Printing Group
     6,087       6,745       6,167  
 
HP Financial Services
     932       885       764  
 
Corporate Investments
     266       72       85  
 
        Total Segments
     32,142       32,414       31,377  
 
Eliminations of intersegment net revenue and other
 (953 )     (782 )     (648 )
                           
 
        Total HP Consolidated Net Revenue
   $ 31,189     $ 31,632     $ 30,729  
                           
Earnings from operations: (a)
                        
                           
 
Services
   $ 1,225     $ 1,361     $ 1,381  
 
Enterprise Servers, Storage and Networking
     699       766       706  
 
HP Software
     151       154       182  
 
Personal Systems Group
     567       533       469  
 
Imaging and Printing Group
     892       1,144       1,040  
 
HP Financial Services
     88       83       72  
 
Corporate Investments
     (332 )     (198 )     (88 )
 
        Total Segments
     3,290       3,843       3,762  
                           
 
Corporate and unallocated costs and eliminations
     (114 )     (153 )     (175 )
 
Unallocated costs related to stock-based compensation expense
 (130 )     (130 )     (156 )
 
Amortization of purchased intangible assets
     (358 )     (413 )     (383 )
 
Restructuring charges
     (150 )     (158 )     (598 )
 
Acquisition-related charges
     (18 )     (21 )     (127 )
 
Interest and other, net
     (121 )     (76 )     (134 )
 
 
                        
Total HP Consolidated Earnings Before Taxes
   $ 2,399     $ 2,892     $ 2,189  
                           
(a)
Certain fiscal 2011 organizational reclassifications have been reflected retroactively to provide improved visibility and comparability. For each of the quarters in fiscal year 2010, the reclassifications resulted in the transfer of revenue and operating profit among the Enterprise Servers, Storage and Networking, Services, HP Software and Corporate Investments financial reporting segments. Reclassifications between segments included the transfer of the networking business from Corporate Investments to Enterprise Servers, Storage and Networking, the transfer of the communications and media solutions business from HP Software to Services, and the transfer of the business intelligence business from HP Software to Corporate Investments. There was no impact on the previously reported financial results for the Personal Systems Group, HP Financial Services and Imaging and Printing Group segments.

 
4
 
 

 
 
HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
SEGMENT INFORMATION
(Unaudited)
(In millions)
               
               
     
Nine months ended
     
July 31,
     
2011
  
2010
               
Net revenue: (a)
            
 
Services
   $ 26,673     $ 26,404  
 
Enterprise Servers, Storage and Networking
     16,586       14,468  
 
HP Software
     2,241       1,966  
 
Personal Systems Group
     29,456       30,458  
 
Imaging and Printing Group
     19,462       18,769  
 
HP Financial Services
     2,644       2,238  
 
Corporate Investments
     416       211  
 
        Total Segments
     97,478       94,514  
 
Eliminations of intersegment net revenue and other
     (2,355 )     (1,759 )
                   
 
        Total HP Consolidated Net Revenue
   $ 95,123     $ 92,755  
                   
Earnings from operations: (a)
                
                   
 
Services
   $ 3,961     $ 4,161  
 
Enterprise Servers, Storage and Networking
     2,293       1,937  
 
HP Software
     428       521  
 
Personal Systems Group
     1,772       1,464  
 
Imaging and Printing Group
     3,165       3,192  
 
HP Financial Services
     250       208  
 
Corporate Investments
     (713 )     (209 )
 
        Total Segments
     11,156       11,274  
                   
 
Corporate and unallocated costs and eliminations
     (118 )     (375 )
 
Unallocated costs related to stock-based compensation expense
     (426 )     (504 )
 
Amortization of purchased intangible assets
     (1,196 )     (1,060 )
 
Restructuring charges
     (466 )     (909 )
 
Acquisition-related charges
     (68 )     (242 )
 
Interest and other, net
     (294 )     (424 )
 
 
                
Total HP Consolidated Earnings Before Taxes
   $ 8,588     $ 7,760  
 
(a)
Certain fiscal 2011 organizational reclassifications have been reflected retroactively to provide improved visibility and comparability. For each of the quarters in fiscal year 2010, the reclassifications resulted in the transfer of revenue and operating profit among the Enterprise Servers, Storage and Networking, Services, HP Software and Corporate Investments financial reporting segments. Reclassifications between segments included the transfer of the networking business from Corporate Investments to Enterprise Servers, Storage and Networking, the transfer of the communications and media solutions business from HP Software to Services, and the transfer of the business intelligence business from HP Software to Corporate Investments. There was no impact on the previously reported financial results for the Personal Systems Group, HP Financial Services and Imaging and Printing Group segments.

 
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