EX-99.2 5 q209ex99-2_0509.htm

EXHIBIT 99.2

HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS
(Unaudited)
(In millions except per share amounts)

Three months ended
April 30, January 31, April 30,
2009
2009
2008 
Net revenue     $ 27,351   $ 28,800   $ 28,262  
     
Costs and expenses(a):    
          Cost of sales       20,919     22,069     21,205 (c)
          Research and development       716     732     908  
          Selling, general and administrative       2,880     2,893     3,331 (c)
          Amortization of purchased intangible assets       380     412     211  
          In-process research and development charges       —     6     13  
          Restructuring charges       94     146     4  
          Acquisition-related charges       75     48     —  
                    Total costs and expenses       25,064     26,306     25,672  
     
Earnings from operations       2,287     2,494     2,590  
     
Interest and other, net       (180 )   (232 )   3  
     
Earnings before taxes       2,107     2,262     2,593  
     
Provision for taxes(b)       391     408     536  
     
Net earnings     $ 1,716   $ 1,854   $ 2,057  
     
Net earnings per share:    
          Basic     $ 0.72   $ 0.77   $ 0.83  
          Diluted     $ 0.70   $ 0.75   $ 0.80  
     
     
Cash dividends declared per share     $ —   $ 0.16   $ —  
     
Weighted-average shares used to compute net earnings per share:  
          Basic       2,394     2,410     2,473  
          Diluted       2,438     2,464     2,557  
     
(a)   Stock-based compensation expense included under SFAS 123(R) was as follows:  
          Cost of sales     $ 48   $ 52   $ 36  
          Research and development       18     17     19  
          Selling, general and administrative       109     85     97  
          Acquisition-related charges       16     6     —  
                    Total costs and expenses     $ 191   $ 160   $ 152  
     
(b)   Tax benefit from stock-based compensation     $ (59 ) $ (48 ) $ (45 )

(c)   Certain pursuit-related costs previously reported as Cost of sales have been realigned retroactively to Selling, general and administrative expenses due to the organizational realignments occurring within HP's service offerings portfolio.

HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS
(Unaudited)
(In millions except per share amounts)

Six months ended
April 30, April 30,
2009
2008
Net revenue     $ 56,151   $ 56,729  
     
Costs and expenses(a):    
          Cost of sales       42,988     42,649 (c)
          Research and development       1,448     1,806  
          Selling, general and administrative       5,773     6,627 (c)
          Amortization of purchased intangible assets       792     417  
          In-process research and development charges       6     13  
          Restructuring charges       240     14  
          Acquisition-related charges       123     --  
                    Total costs and expenses       51,370     51,526  
     
Earnings from operations       4,781     5,203  
     
Interest and other, net       (412 )   75  
     
Earnings before taxes       4,369     5,278  
     
Provision for taxes(b)       799     1,088  
     
Net earnings     $ 3,570   $ 4,190  
     
Net earnings per share:    
          Basic     $ 1.49   $ 1.67  
          Diluted     $ 1.46   $ 1.61  
     
     
Cash dividends declared per share     $ 0.16   $ 0.16  
     
Weighted-average shares used to compute net earnings per share:    
          Basic       2,402     2,516  
          Diluted       2,448     2,603  
     
(a)   Stock-based compensation expense included under SFAS 123(R) was as follows:  
          Cost of sales     $ 100   $ 72  
          Research and development       35     39  
          Selling, general and administrative       194     198  
          Acquisition-related charges       22     --  
                    Total costs and expenses     $ 351   $ 309  
     
(b)   Tax benefit from stock-based compensation     $ (107 ) $ (92 )

(c)   Certain pursuit-related costs previously reported as Cost of sales have been realigned retroactively to Selling, general and administrative expenses due to the organizational realignments occurring within HP’s service offerings portfolio.

HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(In millions)

April 30, October 31,
2009 2008
(unaudited)
ASSETS            
     
Current assets:    
          Cash and cash equivalents    

$

 12,851  

$

 10,153  
          Short-term investments       65     93  
          Accounts receivable       14,666     16,928  
          Financing receivables       2,352     2,314  
          Inventory       5,746     7,879  
          Other current assets       11,506     14,361  
     
               Total current assets       47,186     51,728  
     
Property, plant and equipment       10,807     10,838  
     
Long-term financing receivables and other assets       10,410     10,468  
     
Goodwill and purchased intangible assets       40,112     40,297  
     
Total assets    

$

 108,515  

$

 113,331  
     
     
LIABILITIES AND STOCKHOLDERS' EQUITY    
     
Current liabilities:    
          Notes payable and short-term borrowings    

$

 5,702  

$

 10,176  
          Accounts payable       11,421     14,917 (a)
          Employee compensation and benefits       3,233     4,159  
          Taxes on earnings       546     869  
          Deferred revenue       6,342     6,287  
          Other accrued liabilities       14,339     16,531 (a)
     
                  Total current liabilities       41,583     52,939  
     
Long-term debt       12,978     7,676  
Other liabilities       13,412     13,774  
     
Stockholders' equity       40,542     38,942  
     
Total liabilities and stockholders' equity    

$

 108,515  

$

 113,331  

(a)   In the second quarter of fiscal 2009, HP reclassified certain activity from Other accrued liabilities to Accounts payable as this better represents the nature of the activity. All prior periods have been revised to conform to current presentation.

HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
SEGMENT INFORMATION
(Unaudited)
(In millions)

Three months ended
April 30, January 31, April 30,
2009 2009 2008(a)
Net revenue:                
     
            Services     $ 8,488   $ 8,746   $ 4,262  
            Enterprise Storage and Servers       3,456     3,948     4,780  
            HP Software       880     878     1,039  
      Technology Solutions Group       12,824     13,572     10,081  
      Personal Systems Group       8,191     8,787     10,071  
      Imaging and Printing Group       5,916     5,981     7,644  
      HP Financial Services       641     636     685  
      Corporate Investments       188     196     230  
            Total Segments       27,760     29,172     28,711  
      Eliminations of intersegment net revenue and other       (409 )   (372 )   (449 )
     
            Total HP Consolidated     $ 27,351   $ 28,800   $ 28,262  
     
Earnings from operations:    
     
            Services     $ 1,172   $ 1,123   $ 507  
            Enterprise Storage and Servers       250     405     655  
            HP Software       157     140     104  
      Technology Solutions Group       1,579     1,668     1,266  
      Personal Systems Group       374     435     544  
      Imaging and Printing Group       1,074     1,105     1,220  
      HP Financial Services       46     41     47  
      Corporate Investments       (19 )   (19 )   6  
            Total Segments       3,054     3,230     3,083  
     
      Corporate and unallocated costs and eliminations       (62 )   24     (134 )
      Unallocated costs related to stock-based         

 
          compensation expense (156 ) (148 )

(131

 )
      Amortization of purchased intangible assets       (380 )   (412 )   (211 )
      In-process research and development charges       —     (6 )   (13 )
      Restructuring charges       (94 )   (146 )   (4 )
      Acquisition-related charges       (75 )   (48 )   —  
      Interest and other, net       (180 )   (232 )   3  
     
Total HP Consolidated Earnings Before Taxes     $ 2,107   $ 2,262   $ 2,593  

(a)   Certain fiscal 2009 organizational reclassifications have been reflected retroactively to provide improved visibility and comparability. For each of the quarters in fiscal year 2008, the reclassifications resulted in the transfer of revenue and operating profit among the Services, HP Software and Imaging and Printing Group financial reporting segments. In addition, certain previously allocated costs were reclassified to unallocated costs related to stock-based compensation expense. There was no impact on the previously reported financial results for the Enterprise Storage and Servers, Personal Systems Group, HP Financial Services and Corporate Investments segments.

HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
SEGMENT INFORMATION
(Unaudited)
(In millions)

Six months ended
April 30, April 30,
2009
2008(a)
Net revenue:            
     
             Services    

$

 17,234  

$

 8,314  
             Enterprise Storage and Servers       7,404     9,600  
             HP Software       1,758     1,986  
      Technology Solutions Group       26,396     19,900  
      Personal Systems Group       16,978     20,862  
      Imaging and Printing Group       11,897     15,001  
      HP Financial Services       1,277     1,327  
      Corporate Investments       384     448  
             Total Segments       56,932     57,538  
      Eliminations of intersegment net revenue and other       (781 )   (809 )
     
             Total HP Consolidated    

$

 56,151  

$

 56,729  
     
Earnings from operations:    
     
             Services    

$

 2,295  

$

 1,006  
             Enterprise Storage and Servers        655     1,328  
             HP Software       297     153  
      Technology Solutions Group       3,247     2,487  
      Personal Systems Group       809     1,172  
      Imaging and Printing Group       2,179     2,362  
      HP Financial Services       87     90  
      Corporate Investments       (38 )   14  
             Total Segments       6,284     6,125  
     
      Corporate and unallocated costs and eliminations       (38 )   (223 )
          
      Unallocated costs related to stock-based compensation expense       (304 )   (255 )
      Amortization of purchased intangible assets       (792 )   (417 )
      In-process research and development charges       (6 )   (13 )
      Restructuring charges       (240 )   (14 )
      Acquisition-related charges       (123 )   —  
      Interest and other, net       (412 )   75  
     
Total HP Consolidated Earnings Before Taxes    

$

 4,369  

$

 5,278  

(a)   Certain fiscal 2009 organizational reclassifications have been reflected retroactively to provide improved visibility and comparability. For each of the quarters in fiscal year 2008, the reclassifications resulted in the transfer of revenue and operating profit among the Services, HP Software and Imaging and Printing Group financial reporting segments. In addition, certain previously allocated costs were reclassified to unallocated costs related to stock-based compensation expense. There was no impact on the previously reported financial results for the Enterprise Storage and Servers, Personal Systems Group, HP Financial Services and Corporate Investments segments.