EX-99.2 3 ex99-2_112012.htm Q42012 EXHIBIT 99.2 ex99-2_112012.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,
2012
 
July 31,
2012
 
October 31,
2011
                         
Net revenue
  $ 29,959     $ 29,669     $ 32,122  
                         
Costs and expenses:(a)
                       
         Cost of sales
    22,711       22,820       25,304  
         Research and development
    909       854       829  
         Selling, general and administrative
    3,227       3,366       3,605  
         Amortization of purchased intangible assets
    372       476       411  
         Impairment of goodwill and  purchased intangible assets
    8,847       9,188       885  
         Restructuring charges
    378       1,795       179  
         Acquisition-related charges
    3       3       114  
                    Total costs and expenses
    36,447       38,502       31,327  
                         
(Loss) earnings from operations
    (6,488 )     (8,833 )     795  
                         
Interest and other, net
    (188 )     (224 )     (401 )
                         
(Loss) earnings before taxes
    (6,676 )     (9,057 )     394  
                         
Provision (benefit) for taxes
    178       (200 )     155  
                         
Net (loss) earnings
  $ (6,854 )   $ (8,857 )   $ 239  
                         
Net (loss) earnings per share:
                       
         Basic
  $ (3.49 )   $ (4.49 )   $ 0.12  
         Diluted
  $ (3.49 )   $ (4.49 )   $ 0.12  
                         
Cash dividends declared per share
  $ -     $ 0.26     $ -  
                         
Weighted-average shares used to compute net (loss) earnings per share:
                 
         Basic
    1,964       1,971       1,989  
         Diluted
    1,964       1,971       2,005  
 
(a)
In connection with organizational realignments implemented in the first quarter of fiscal year 2012, 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,
   
2012
 
2011
     
(Unaudited)
         
                 
Net revenue
  $ 120,357     $ 127,245  
                 
Costs and expenses:(a)
               
         Cost of sales
    92,385       97,418  
         Research and development
    3,399       3,254  
         Selling, general and administrative
    13,500       13,577  
         Amortization of purchased intangible assets
    1,784       1,607  
         Impairment of goodwill and  purchased intangible assets
    18,035       885  
         Restructuring charges
    2,266       645  
         Acquisition-related charges
    45       182  
                    Total costs and expenses
    131,414       117,568  
                 
(Loss) earnings from operations
    (11,057 )     9,677  
                 
Interest and other, net
    (876 )     (695 )
                 
(Loss) earnings before taxes
    (11,933 )     8,982  
                 
Provision for taxes
    717       1,908  
                 
Net (loss) earnings
  $ (12,650 )   $ 7,074  
                 
Net (loss) earnings per share:
               
         Basic
  $ (6.41 )   $ 3.38  
         Diluted
  $ (6.41 )   $ 3.32  
                 
Cash dividends declared per share
  $ 0.50     $ 0.40  
                 
Weighted-average shares used to compute net (loss) earnings per share:
 
         Basic
    1,974       2,094  
         Diluted
    1,974       2,128  
 
(a)
In connection with organizational realignments implemented in the first quarter of fiscal year 2012, 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,
2012
 
October 31,
2011
   
(Unaudited)
     
ASSETS
           
             
Current assets:
           
        Cash and cash equivalents
  $ 11,301     $ 8,043  
        Accounts receivable
    16,407       18,224  
        Financing receivables
    3,252       3,162  
        Inventory
    6,317       7,490  
        Other current assets
    13,360       14,102  
                 
             Total current assets
    50,637       51,021  
                 
Property, plant and equipment
    11,954       12,292  
                 
Long-term financing receivables and other assets
    10,593       10,755  
                 
Goodwill and purchased intangible assets
    35,584       55,449  
                 
Total assets
  $ 108,768     $ 129,517  
                 
                 
LIABILITIES AND STOCKHOLDERS' EQUITY
               
                 
Current liabilities:
               
        Notes payable and short-term borrowings
  $ 6,647     $ 8,083  
        Accounts payable
    13,350       14,750  
        Employee compensation and benefits
    4,058       3,999  
        Taxes on earnings
    846       1,048  
        Deferred revenue
    7,494       7,449  
        Other accrued liabilities
    14,271       15,113  
                 
             Total current liabilities
    46,666       50,442  
                 
Long-term debt
    21,789       22,551  
                 
Other liabilities
    17,480       17,520  
                 
Stockholders' equity:
               
        HP stockholders' equity
    22,436       38,625  
        Non-controlling interests
    397       379  
                 
             Total stockholders' equity
    22,833       39,004  
                 
Total liabilities and stockholders' equity
  $ 108,768     $ 129,517  

 
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HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
SEGMENT INFORMATION
(Unaudited)
(In millions)
                     
     
Three months ended
     
October 31,
2012
 
July 31,
2012
 
October 31,
2011
                   
Net revenue:(a)
                 
                     
 
Personal Systems
  $ 8,705     $ 8,620     $ 10,118  
 
Printing
    6,080       6,017       6,419  
 
    Total Printing and Personal Systems Group(b)
    14,785       14,637       16,537  
 
Services
    8,711       8,754       9,227  
 
Enterprise Servers, Storage and Networking
    5,119       5,143       5,601  
 
Software
    1,171       973       1,023  
 
HP Financial Services
    966       935       952  
 
Corporate Investments
    13       19       (131 )
 
       Total segments
    30,765       30,461       33,209  
 
Eliminations of intersegment net revenue and other
    (806 )     (792 )     (1,087 )
                           
 
       Total HP consolidated net revenue
  $ 29,959     $ 29,669     $ 32,122  
                           
Earnings before taxes:(a)
                       
                           
 
Personal Systems
  $ 309     $ 409     $ 578  
 
Printing
    1,067       949       793  
 
    Total Printing and Personal Systems Group(b)
    1,376       1,358       1,371  
 
Services
    1,234       959       1,210  
 
Enterprise Servers, Storage and Networking
    423       562       717  
 
Software
    318       175       284  
 
HP Financial Services
    104       97       98  
 
Corporate Investments
    (83 )     (58 )     (908 )
 
       Total segment earnings from operations
    3,372       3,093       2,772  
                           
 
Corporate and unallocated costs and eliminations
    (120 )     (314 )     (196 )
 
Unallocated costs related to stock-based compensation expense
    (140     (150 )     (192
 
Amortization of purchased intangible assets
    (372 )     (476 )     (411 )
 
Impairment of goodwill and purchased intangible assets
    (8,847 )     (9,188 )     (885 )
 
Restructuring charges
    (378 )     (1,795 )     (179 )
 
Acquisition-related charges
    (3 )     (3 )     (114 )
 
Interest and other, net
    (188 )     (224 )     (401 )
 
 
                       
         Total HP consolidated (loss) earnings before taxes $    (6,676 )   $ (9,057  )   $ 394  
 
(a)
Certain fiscal 2012 organizational reclassifications have been reflected retroactively to provide improved visibility and comparability. For each of the quarters in fiscal year 2011, the reclassifications resulted in the transfer of revenue and operating profit among the Services, Printing, Enterprise Servers, Storage and Networking, Software and Corporate Investments financial reporting segments. Reclassifications between segments included the transfer of the Indigo Scitex support and the LaserJet and enterprise solutions trade support businesses from Services to Printing, the transfer of the business intelligence services business from Corporate Investments to Services, the transfer of the information management services business from Software to Services, and the transfer of the TippingPoint business from Enterprise Servers, Storage and Networking to Software. There was no impact on the previously reported financial results for the Personal Systems and HP Financial Services segments.
     
(b)
As part of a realignment of the structure of HP’s business in fiscal 2012, the Personal Systems segment and the Printing segment have been structured beneath a newly formed Printing and Personal Systems Group. While the Printing and Personal Systems Group is not a financial reporting segment, HP provides financial data aggregating the segments within it in order to provide a supplementary view of its business.

 
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HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
SEGMENT INFORMATION
(In millions)
               
     
Twelve months ended
     
October 31,
     
2012
 
2011
    (Unaudited)        
             
Net revenue:(a)
           
               
 
Personal Systems
  $ 35,650     $ 39,574  
 
Printing
    24,487       26,176  
 
    Total Printing and Personal Systems Group(b)
    60,137       65,750  
 
Services
    34,922       35,702  
 
Enterprise Servers, Storage and Networking
    20,491       22,064  
 
Software
    4,060       3,367  
 
HP Financial Services
    3,819       3,596  
 
Corporate Investments
    108       208  
 
       Total Segments
    123,537       130,687  
 
Eliminations of intersegment net revenue and other
    (3,180 )     (3,442 )
                   
 
       Total HP consolidated net revenue
  $ 120,357     $ 127,245  
                   
Earnings before taxes:(a)
               
                   
 
Personal Systems
  $ 1,706     $ 2,350  
 
Printing
    3,585       3,927  
 
    Total Printing and Personal Systems Group(b)
    5,291       6,277  
 
Services
    4,095       5,203  
 
Enterprise Servers, Storage and Networking
    2,132       2,997  
 
Software
    827       722  
 
HP Financial Services
    388       348  
 
Corporate Investments
    (238 )     (1,619 )
 
       Total segment earnings from operations
    12,495       13,928  
 
Corporate and unallocated costs and eliminations
    (790 )     (314 )
 
Unallocated costs related to stock-based compensation expense
    (632 )     (618 )
 
Amortization of purchased intangible assets
    (1,784 )     (1,607 )
 
Impairment of goodwill and purchased intangible assets
    (18,035 )     (885 )
 
Restructuring charges
    (2,266 )     (645 )
 
Acquisition-related charges
    (45 )     (182 )
 
Interest and other, net
    (876 )     (695 )
 
 
               
 
       Total HP consolidated (loss) earnings before taxes
  $ (11,933 )   $ 8,982  
 
(a)
Certain fiscal 2012 organizational reclassifications have been reflected retroactively to provide improved visibility and comparability. For each of the quarters in fiscal year 2011, the reclassifications resulted in the transfer of revenue and operating profit among the Services, Printing, Enterprise Servers, Storage and Networking, Software and Corporate Investments financial reporting segments. Reclassifications between segments included the transfer of the Indigo Scitex support and the LaserJet and enterprise solutions trade support businesses from Services to Printing, the transfer of the business intelligence services business from Corporate Investments to Services, the transfer of the information management services business from Software to Services, and the transfer of the TippingPoint business from Enterprise Servers, Storage and Networking to Software. There was no impact on the previously reported financial results for the Personal Systems and HP Financial Services segments.
   
(b)
As part of a realignment of the structure of HP’s business in fiscal 2012, the Personal Systems segment and the Printing segment have been structured beneath a newly formed Printing and Personal Systems Group. While the Printing and Personal Systems Group is not a financial reporting segment, HP provides financial data aggregating the segments within it in order to provide a supplementary view of its business.

 
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