Subsequent Events

9 Months Ended

Jul. 31, 2011

Subsequent Events

Subsequent Events

Note 17: Subsequent Events

        In August 2011, HP and an indirect wholly-owned subsidiary of HP entered into an Offer Agreement with Autonomy Corporation plc ("Autonomy"). Pursuant to the Offer Agreement, HP announced the terms of a recommended cash offer (the "Offer") under which HP would acquire the entire issued and to be issued share capital of Autonomy for £25.50 per share in cash, representing an enterprise value of approximately $11 billion. The Offer is subject to customary conditions including, acceptance of the Offer by the holders of at least 75% of the Autonomy share capital; subject to certain exceptions, that the members of Autonomy's board of directors will continue to recommend the Offer; expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended; clearance of other required regulatory approvals; and other customary conditions. HP intends to fund the Offer with a combination of HP's cash resources and debt financing. Pursuant to the cash confirmation process mandated by Section 2.5(a) of the UK City Code on Takeovers and Mergers, HP has agreed with its financial advisors for the Offer that it will hold a minimum of $4.25 billion in cash reserves available to fund the Offer for a specified period expected to extend until the completion of the acquisition. In addition, HP has purchased foreign exchange options at a cost of approximately $333 million to limit its foreign exchange risk in connection with the acquisition. Changes in the fair value of the options will be recognized in earnings until the options are exercised.

        In August 2011, HP entered into a new £5 billion ($8.2 billion) 364-day unsecured bridge term loan agreement (the "Bridge Facility"). The Bridge Facility may be used for cash consideration to fund the acquisition of Autonomy, including amounts used to refinance indebtedness to fund that acquisition.

        In August 2011, HP announced that its Board of Directors had authorized the evaluation of strategic alternatives for PSG. HP's preferred alternative is the separation of its PC business into a separate company through a spin-off or other transaction, but the evaluation process is ongoing. HP expects the evaluation process to be completed by the end of calendar year 2011 and any separation or other strategic plan to be implemented within approximately 12-18 months after the date of the original announcement.

        In August 2011, HP announced that it will discontinue the manufacture and sale of all of its WebOS hardware products, including its WebOS smartphones and the HP TouchPad, and will explore alternatives to optimize the value of the WebOS software. In connection with this decision, HP expects to record a one-time charge in its fourth fiscal quarter of 2011 of approximately $1 billion for restructuring and related shutdown costs. A majority of these charges are expected to be paid in HP's fourth fiscal quarter. In addition, as HP works through alternatives for the WebOS software, which HP acquired in connection with its acquisition of Palm, HP will evaluate the goodwill and other intangible assets related to the Palm acquisition for any potential impairment and, if appropriate, recognize a related non-cash charge in the appropriate period. The carrying value of the goodwill and other intangible assets related to the Palm acquisition was approximately $1.2 billion as of July 31, 2011.