EX-99.2 5 q309ex99-2_0809.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, April 30, July 31,
2009 2009 2008
Net revenue    

$

 27,451   $ 27,351   $ 28,032  
     
Costs and expenses(a):    
          Cost of sales       20,936     20,919     21,197 (c)
          Research and development       667     716     895  
          Selling, general and administrative       2,874     2,880     3,193 (c)
          Amortization of purchased intangible assets       379     380     213  
          Restructuring charges       362     94     5  
          Acquisition-related charges       59     75     —  
                    Total costs and expenses       25,277     25,064     25,503  
     
Earnings from operations       2,174     2,287     2,529  
     
Interest and other, net       (177 )   (180 )   23  
     
Earnings before taxes       1,997     2,107     2,552  
     
Provision for taxes(b)       355     391     525  
     
Net earnings    

$

 1,642   $ 1,716   $ 2,027  
     
Net earnings per share:    
          Basic    

$

 0.69   $ 0.72   $ 0.82  
          Diluted    

$

 0.67   $ 0.70   $ 0.80  
     
     
Cash dividends declared per share    

$

 0.16   $ —   $ 0.16  
     
Weighted-average shares used to compute net earnings per share:  
          Basic       2,382     2,394     2,459  
          Diluted       2,436     2,438     2,533  
     
(a)  Stock-based compensation expense included under SFAS 123(R) was as follows:  
           Cost of sales    

$

 41   $ 48   $ 34  
           Research and development       12     18     16  
           Selling, general and administrative       94     109     90  
           Acquisition-related charges       3     16     —  
                     Total costs and expenses    

$

 150   $ 191   $ 140  
     
(b)  Tax benefit from stock-based compensation    

$

 (51 ) $ (59 ) $ (38 )
     
(c)  For the prior year reporting periods presented, certain pursuit-related costs previously reported as Cost of sales have been realigned retroactively to Selling, general and administrative expenses due to organizational realignments.

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

Nine months ended
July 31, July 31,
2009 2008
Net revenue     $ 83,602   $ 84,761  
     
Costs and expenses(a):    
          Cost of sales       63,924     63,846 (c)
          Research and development       2,115     2,701  
          Selling, general and administrative       8,647     9,820 (c)
          Amortization of purchased intangible assets       1,171     630  
          In-process research and development charges       6     13  
          Restructuring charges       602     19  
          Acquisition-related charges       182     —  
                    Total costs and expenses       76,647     77,029  
     
Earnings from operations       6,955     7,732  
     
Interest and other, net       (589 )   98  
     
Earnings before taxes       6,366     7,830  
     
Provision for taxes(b)       1,154     1,613  
     
Net earnings     $ 5,212   $ 6,217  
     
Net earnings per share:    
          Basic     $ 2.18   $ 2.49  
          Diluted     $ 2.13   $ 2.41  
     
     
Cash dividends declared per share     $ 0.32   $ 0.32  
     
Weighted-average shares used to compute net earnings per share:  
          Basic       2,395     2,497  
          Diluted       2,442     2,577  
     
(a)  Stock-based compensation expense included under SFAS 123(R) was as follows:  
           Cost of sales     $ 141   $ 106  
           Research and development       47     55  
           Selling, general and administrative       288     288  
           Acquisition-related charges       25     —  
                    Total costs and expenses     $ 501   $ 449  
     
(b)  Tax benefit from stock-based compensation     $ (158 ) $ (130 )
     
(c)  For the prior year reporting periods presented, certain pursuit-related costs previously reported as Cost of sales have been realigned retroactively to Selling, general and administrative expenses due to organizational realignments.

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

July 31, October 31,
2009 2008
(unaudited)
ASSETS            
     
Current assets:    
         Cash and cash equivalents     $ 13,521   $ 10,153  
         Short-term investments       66     93  
         Accounts receivable       14,735     16,928  
         Financing receivables       2,532     2,314  
         Inventory       5,850     7,879  
         Other current assets       12,138     14,361  
     
              Total current assets       48,842     51,728  
     
Property, plant and equipment       11,194     10,838  
     
Long-term financing receivables and other assets       10,857     10,468  
     
Goodwill and purchased intangible assets       40,179     40,297  
     
Total assets     $ 111,072   $ 113,331  
     
     
LIABILITIES AND STOCKHOLDERS' EQUITY    
     
Current liabilities:    
         Notes payable and short-term borrowings     $ 3,288   $ 10,176  
         Accounts payable       12,778     14,917  
         Employee compensation and benefits       3,596     4,159  
         Taxes on earnings       786     869  
         Deferred revenue       6,458     6,287  
         Other accrued liabilities       14,904     16,531  
     
              Total current liabilities       41,810     52,939  
     
Long-term debt       13,892     7,676  
Other liabilities       13,835     13,774  
     
Stockholders' equity       41,535     38,942  
     
Total liabilities and stockholders' equity     $ 111,072   $ 113,331  

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

Three months ended
July 31, April 30, July 31,
2009 2009 2008(a)
Net revenue:                
     
               Services(b)     $ 8,470   $ 8,488   $ 4,386  
               Enterprise Storage and Servers       3,660     3,456     4,741  
               HP Software       847     880     1,086  
      Technology Solutions Group       12,977     12,824     10,213  
      Personal Systems Group       8,432     8,191     10,254  
      Imaging and Printing Group       5,660     5,916     7,041  
      HP Financial Services       670     641     680  
      Corporate Investments       193     188     271  
               Total Segments       27,932     27,760     28,459  
      Eliminations of intersegment net revenue and other     (481 )   (409 )   (427 )
     
               Total HP Consolidated     $ 27,451   $ 27,351   $ 28,032  
     
Earnings from operations:    
     
               Services(b)     $ 1,289   $ 1,172   $ 567  
               Enterprise Storage and Servers       356     250     544  
               HP Software       153     157     135  
      Technology Solutions Group       1,798     1,579     1,246  
      Personal Systems Group       386     374     587  
      Imaging and Printing Group       960     1,074     1,042  
      HP Financial Services       53     46     51  
      Corporate Investments       (10 )   (19 )   26  
               Total Segments       3,187     3,054     2,952  
     
      Corporate and unallocated costs and eliminations       (81 )   (62 )   (85 )
      Unallocated costs related to stock-based compensation      

           expense (132 ) (156 )

(120

 )
      Amortization of purchased intangible assets       (379 )   (380 )   (213 )
      Restructuring charges       (362 )   (94 )   (5 )
      Acquisition-related charges       (59 )   (75 )   —  
      Interest and other, net       (177 )   (180 )   23  
     
Total HP Consolidated Earnings Before Taxes     $ 1,997   $ 2,107   $ 2,552  

(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.

(b)   Includes the results of EDS which was acquired on August 26, 2008.

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

Nine months ended
July 31, July 31,
2009
2008(a)
Net revenue:            
     
               Services(b)    

$

 25,704  

$

 12,700  
               Enterprise Storage and Servers       11,064     14,341  
               HP Software       2,605     3,072  
      Technology Solutions Group       39,373     30,113  
      Personal Systems Group       25,410     31,116  
      Imaging and Printing Group       17,557     22,042  
      HP Financial Services       1,947     2,007  
      Corporate Investments       577     719  
               Total Segments       84,864     85,997  
      Eliminations of intersegment net revenue and other       (1,262 )   (1,236 )
     
      Total HP Consolidated    

$

 83,602  

$

 84,761  
     
Earnings from operations:    
     
               Services(b)    

$

 3,584  

$

 1,573  
               Enterprise Storage and Servers       1,011     1,872  
               HP Software       450     288  
      Technology Solutions Group       5,045     3,733  
      Personal Systems Group       1,195     1,759  
      Imaging and Printing Group       3,139     3,404  
      HP Financial Services       140     141  
      Corporate Investments       (48 )   40  
               Total Segments       9,471     9,077  
     
      Corporate and unallocated costs and eliminations       (119 )   (308 )
      Unallocated costs related to stock-based compensation expense       (436 )   (375 )
      Amortization of purchased intangible assets       (1,171 )   (630 )
      In-process research and development charges       (6 )   (13 )
      Restructuring charges       (602 )   (19 )
      Acquisition-related charges       (182 )   —  
      Interest and other, net       (589 )   98  
     
Total HP Consolidated Earnings Before Taxes    

$

 6,366  

$

 7,830  

(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.

(b)   Includes the results of EDS which was acquired on August 26, 2008.