HP INC - FORM 8-K - EX-99.2 - EXHIBIT 99.2 - November 21, 2011

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EX-99.1 - EXHIBIT 99.1 - HP INCq4exhibit99-1.htm
8-K - FORM 8-K - HP INCq4form8-k_11212011.htm
 
EXHIBIT 99.2
 
HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS
(Unaudited)
(In millions except per share amounts)
                   
   
Three months ended
   
October 31,
2011
  
July 31,
2011
  
October 31,
2010
Net revenue
   $ 32,122     $ 31,189     $ 33,278  
                         
Costs and Expenses:(a)
                        
          Cost of sales
     25,332       23,929       24,995  
          Research and development
     829       812       814  
          Selling, general and administrative
     3,577       3,402       3,464  
          Amortization of purchased intangible assets
     411       358       424  
          Restructuring charges
     179       150       235  
          Acquisition-related charges
     114       18       51  
          Impairment of goodwill and purchased intangible assets     885       -       -  
                    Total costs and expenses
     31,327       28,669       29,983  
                         
Earnings from operations
     795       2,520       3,295  
                         
Interest and other, net
     (401 )     (121 )     (81 )
                         
Earnings before taxes
     394       2,399       3,214  
                         
Provision for taxes
     155       473       676  
                         
Net earnings
   $ 239     $ 1,926     $ 2,538  
                         
Net earnings per share:
                        
          Basic
   $ 0.12     $ 0.94     $ 1.13  
          Diluted
   $ 0.12     $ 0.93     $ 1.10  
                         
                         
Cash dividends declared per share
   $ -     $ 0.24     $ -  
                         
Weighted-average shares used to compute net earnings per share:
          
          Basic
     1,989       2,054       2,249  
          Diluted
     2,005       2,080       2,297  
                         
(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 STATEMENTS OF EARNINGS
(In millions except per share amounts)
             
   
Twelve months ended
   
October 31,
   
2011
  
2010
    (Unaudited)        
Net revenue
   $ 127,245     $ 126,033  
                 
Costs and expenses:(a)
                
          Cost of sales
     97,529       95,956  
          Research and development
     3,254       2,959  
          Selling, general and administrative
     13,466       12,718  
          Amortization of purchased intangible assets
     1,607       1,484  
          Restructuring charges
     645       1,144  
          Acquisition-related charges
     182       293  
          Impairment of goodwill and purchased intangible assets     885       -  
                    Total costs and expenses
     117,568       114,554  
                 
Earnings from operations
     9,677       11,479  
                 
Interest and other, net
     (695 )     (505 )
                 
Earnings before taxes
     8,982       10,974  
                 
Provision for taxes
     1,908       2,213  
                 
Net earnings
   $ 7,074     $ 8,761  
                 
Net earnings per share:
                
          Basic
   $ 3.38     $ 3.78  
          Diluted
   $ 3.32     $ 3.69  
                 
                 
Cash dividends declared per share
   $ 0.40     $ 0.32  
                 
Weighted-average shares used to compute net earnings per share:
          
          Basic
     2,094       2,319  
          Diluted
     2,128       2,372  
                 
(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)
             
   
October 31,
2011
  
October 31,
2010
   
(unaudited)
      
ASSETS
            
             
Current assets:
            
          Cash and cash equivalents
   $ 8,043     $ 10,929  
          Accounts receivable
     18,224       18,481  
          Financing receivables
     3,162       2,986  
          Inventory
     7,490       6,466  
          Other current assets
     14,102       15,322  
              Total current assets
     51,021       54,184  
                 
Property, plant and equipment
     12,292       11,763  
                 
Long-term financing receivables and other assets
     10,755       12,225  
                 
Goodwill and purchased intangible assets
     55,449       46,331  
                 
Total assets
   $ 129,517     $ 124,503  
                 
                 
LIABILITIES AND STOCKHOLDERS' EQUITY
                
                 
Current liabilities:
                
          Notes payable and short-term borrowings
   $ 8,083     $ 7,046  
          Accounts payable
     14,750       14,365  
          Employee compensation and benefits
     3,999       4,256  
          Taxes on earnings
     1,048       802  
          Deferred revenue
     7,449       6,727  
          Other accrued liabilities
     15,113       16,207  
              Total current liabilities
     50,442       49,403  
                 
Long-term debt
     22,551       15,258  
                 
Other liabilities
     17,520       19,061  
                 
Stockholders' equity:
                
          HP stockholders' equity
     38,625       40,449  
          Non-controlling interests
     379       332  
              Total stockholders' equity
     39,004       40,781  
                 
Total liabilities and stockholders' equity
   $ 129,517     $ 124,503  

 
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HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
SEGMENT INFORMATION
(Unaudited)
(In millions)
 
     
Three months ended
     
October 31,
2011
  
July 31,
2011
  
October 31,
2010
Net revenue:(a)
                  
                     
 
Services
   $ 9,281     $ 9,089     $ 9,125  
 
Enterprise Servers, Storage and Networking
     5,655       5,396       5,888  
 
HP Software
     976       780       763  
 
Personal Systems Group
     10,118       9,592       10,283  
 
Imaging and Printing Group
     6,321       6,087       6,995  
 
HP Financial Services
     952       932       809  
 
Corporate Investments
     (94 )     266       135  
 
          Total Segments
     33,209       32,142       33,998  
 
Eliminations of intersegment net revenue and other
     (1,087 )     (953 )     (720 )
                           
 
          Total HP Consolidated Net Revenue
   $ 32,122     $ 31,189     $ 33,278  
                           
Earnings from operations:(a)
                        
                           
 
Services
   $ 1,188     $ 1,225     $ 1,500  
 
Enterprise Servers, Storage and Networking
     733       699       888  
 
HP Software
     270       151       261  
 
Personal Systems Group
     578       567       568  
 
Imaging and Printing Group
     808       892       1,220  
 
HP Financial Services
     98       88       73  
 
Corporate Investments
     (903 )     (332 )     (157 )
 
          Total Segments
     2,772       3,290       4,353  
                           
 
Corporate and unallocated costs and eliminations
     (196 )     (114 )     (239 )
 
Unallocated costs related to stock-based compensation expense
     (192 )     (130 )     (109 )
 
Amortization of purchased intangible assets
     (411 )     (358 )     (424 )
 
Restructuring charges
     (179 )     (150 )     (235 )
 
Acquisition-related charges
     (114 )     (18 )     (51 )
 
Impairment of goodwill and purchased intangible assets
     (885 )     -       -  
 
Interest and other, net
     (401 )     (121 )     (81 )
 
 
                        
Total HP Consolidated Earnings Before Taxes
   $ 394     $ 2,399     $ 3,214  
 
(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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HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
SEGMENT INFORMATION
(Unaudited)
(In millions)
               
     
Twelve months ended
     
October 31,
      2011  
2010
Net revenue:(a)
            
               
 
Services
   $ 35,954     $ 35,529  
 
Enterprise Servers, Storage and Networking
     22,241       20,356  
 
HP Software
     3,217       2,729  
 
Personal Systems Group
     39,574       40,741  
 
Imaging and Printing Group
     25,783       25,764  
 
HP Financial Services
     3,596       3,047  
 
Corporate Investments
     322       346  
 
          Total Segments
     130,687       128,512  
 
Eliminations of intersegment net revenue and other
     (3,442 )     (2,479 )
                   
 
          Total HP Consolidated Net Revenue
   $ 127,245     $ 126,033  
                   
Earnings from operations:(a)
                
                   
 
Services
   $ 5,149     $ 5,661  
 
Enterprise Servers, Storage and Networking
     3,026       2,825  
 
HP Software
     698       782  
 
Personal Systems Group
     2,350       2,032  
 
Imaging and Printing Group
     3,973       4,412  
 
HP Financial Services
     348       281  
 
Corporate Investments
     (1,616 )     (366 )
 
          Total Segments
     13,928       15,627  
                   
 
Corporate and unallocated costs and eliminations
     (314 )     (614 )
 
Unallocated costs related to stock-based compensation expense
     (618 )     (613 )
 
Amortization of purchased intangible assets
     (1,607 )     (1,484 )
 
Restructuring charges
     (645 )     (1,144 )
 
Acquisition-related charges
     (182 )     (293 )
 
Impairment of goodwill and purchased intangible assets
     (885 )     -  
 
Interest and other, net
     (695 )     (505 )
 
 
                
Total HP Consolidated Earnings Before Taxes
   $ 8,982     $ 10,974  
 
(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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