EX-99.1 2 a05-3716_1ex99d1.htm EX-99.1

Exhibit 99.1

 

HEWLETT-PACKARD COMPANY AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS

(Unaudited)

(In millions except per share amounts)

 

 

 

Three months ended

 

Twelve months
ended

 

Three months ended

 

Twelve months
ended

 

 

 

January 31,
2003

 

April 30,
2003

 

July 31,
2003

 

October 31,
2003

 

October 31,
2003

 

January 31,
2004

 

April 30,
2004

 

July 31,
2004

 

October 31,
2004

 

October 31,
2004

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Revenue

 

$

17,877

 

$

17,983

 

$

17,348

 

$

19,853

 

$

73,061

 

$

19,514

 

$

20,113

 

$

18,889

 

$

21,389

 

$

79,905

 

Cost of sales (1)

 

13,269

 

13,240

 

12,945

 

14,939

 

54,393

 

14,691

 

15,182

 

14,545

 

16,393

 

60,811

 

Research and development (1)

 

917

 

950

 

904

 

915

 

3,686

 

889

 

924

 

877

 

873

 

3,563

 

Selling, general and administrative (1)

 

2,588

 

2,649

 

2,641

 

2,564

 

10,442

 

2,578

 

2,665

 

2,621

 

2,632

 

10,496

 

Amortization of purchased intangible assets

 

138

 

141

 

141

 

143

 

563

 

144

 

148

 

146

 

165

 

603

 

Restructuring charges

 

—

 

234

 

376

 

190

 

800

 

54

 

38

 

9

 

13

 

114

 

Acquisition-related charges

 

86

 

126

 

40

 

28

 

280

 

15

 

9

 

6

 

24

 

54

 

In-process research and development charges

 

—

 

—

 

—

 

1

 

1

 

—

 

9

 

28

 

—

 

37

 

Total costs and expenses

 

16,998

 

17,340

 

17,047

 

18,780

 

70,165

 

18,371

 

18,975

 

18,232

 

20,100

 

75,678

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings from operations

 

879

 

643

 

301

 

1,073

 

2,896

 

1,143

 

1,138

 

657

 

1,289

 

4,227

 

Operating margin %

 

4.9

%

3.6

%

1.7

%

5.4

%

4.0

%

5.9

%

5.7

%

3.5

%

6.0

%

5.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest and other, net

 

51

 

(20

)

10

 

(20

)

21

 

11

 

2

 

20

 

2

 

35

 

Gains (losses) on investments

 

(5

)

(12

)

(24

)

12

 

(29

)

9

 

(5

)

1

 

(1

)

4

 

Dispute settlement

 

—

 

—

 

—

 

—

 

—

 

—

 

(70

)

—

 

—

 

(70

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings before taxes

 

925

 

611

 

287

 

1,065

 

2,888

 

1,163

 

1,065

 

678

 

1,290

 

4,196

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision for (benefit from) taxes

 

204

 

(48

)

(10

)

203

 

349

 

227

 

181

 

92

 

199

 

699

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net earnings

 

$

721

 

$

659

 

$

297

 

$

862

 

$

2,539

 

$

936

 

$

884

 

$

586

 

$

1,091

 

$

3,497

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.24

 

$

0.22

 

$

0.10

 

$

0.28

 

$

0.83

 

$

0.31

 

$

0.29

 

$

0.19

 

$

0.37

 

$

1.16

 

Diluted

 

$

0.24

 

$

0.22

 

$

0.10

 

$

0.28

 

$

0.83

 

$

0.30

 

$

0.29

 

$

0.19

 

$

0.37

 

$

1.15

 

 

(1)   Reflects the reclassification of certain information technology (“IT”) infrastructure costs from selling, general and administrative expenses to cost of sales and research and development expenses as system improvements have allowed for the better alignment of these costs to the functional areas they support.

 


 

HEWLETT-PACKARD COMPANY AND SUBSIDIARIES

SEGMENT INFORMATION

(Unaudited)

(In millions)

 

 

 

Three months ended

 

 

 

Twelve months ended

 

 

 

 

 

January 31, 2003

 

 

 

April 30,
2003

 

 

 

July 31,
2003

 

 

 

October 31,
2003

 

 

 

October 31,
2003

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net revenue: (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Imaging and Printing

 

$

5,598

 

 

 

$

5,512

 

 

 

$

5,226

 

 

 

$

6,233

 

 

 

$

22,569

 

 

 

Personal Systems

 

5,142

 

 

 

5,127

 

 

 

4,955

 

 

 

5,986

 

 

 

21,210

 

 

 

Imaging and Personal Systems Group

 

10,740

 

 

 

10,639

 

 

 

10,181

 

 

 

12,219

 

 

 

43,779

 

 

 

Enterprise Storage and Servers

 

3,540

 

 

 

3,667

 

 

 

3,502

 

 

 

3,831

 

 

 

14,540

 

 

 

Software

 

184

 

 

 

182

 

 

 

192

 

 

 

223

 

 

 

781

 

 

 

HP Services

 

2,982

 

 

 

3,054

 

 

 

3,108

 

 

 

3,258

 

 

 

12,402

 

 

 

Technology Solutions Group

 

6,706

 

 

 

6,903

 

 

 

6,802

 

 

 

7,312

 

 

 

27,723

 

 

 

Financing

 

517

 

 

 

501

 

 

 

442

 

 

 

461

 

 

 

1,921

 

 

 

Corporate Investments

 

77

 

 

 

84

 

 

 

88

 

 

 

96

 

 

 

345

 

 

 

Total segments

 

18,040

 

 

 

18,127

 

 

 

17,513

 

 

 

20,088

 

 

 

73,768

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Eliminations of intersegment net revenue and other

 

(163

)

 

 

(144

)

 

 

(165

)

 

 

(235

)

 

 

(707

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total HP Consolidated

 

$

17,877

 

 

 

$

17,983

 

 

 

$

17,348

 

 

 

$

19,853

 

 

 

$

73,061

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings from operations: (1)

 

 

 

Op 

%

 

 

Op 

%

 

 

Op 

%

 

 

Op 

%

 

 

Op 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Imaging and Printing

 

$

910

 

16.3

%

$

924

 

16.8

%

$

744

 

14.2

%

$

1,013

 

16.3

%

$

3,591

 

15.9

%

Personal Systems

 

32

 

0.6

%

22

 

0.4

%

(57

)

(1.2

)%

21

 

0.4

%

18

 

0.1

%

Imaging and Personal Systems Group

 

942

 

8.8

%

946

 

8.9

%

687

 

6.7

%

1,034

 

8.5

%

3,609

 

8.2

%

Enterprise Storage and Servers

 

(25

)

(0.7

)%

59

 

1.6

%

(19

)

(0.5

)%

131

 

3.4

%

146

 

1.0

%

Software

 

(59

)

(32.1

)%

(67

)

(36.8

)%

(54

)

(28.1

)%

(26

)

(11.7

)%

(206

)

(26.4

)%

HP Services

 

339

 

11.4

%

299

 

9.8

%

337

 

10.8

%

394

 

12.1

%

1,369

 

11.0

%

Technology Solutions Group

 

255

 

3.8

%

291

 

4.2

%

264

 

3.9

%

499

 

6.8

%

1,309

 

4.7

%

Financing

 

14

 

2.7

%

21

 

4.2

%

18

 

4.1

%

26

 

5.6

%

79

 

4.1

%

Corporate Investments

 

(47

)

(61.0

)%

(44

)

(52.4

)%

(37

)

(42.0

)%

(33

)

(34.4

)%

(161

)

(46.7

)%

Total segments

 

1,164

 

6.5

%

1,214

 

6.7

%

932

 

5.3

%

1,526

 

7.6

%

4,836

 

6.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate and unallocated costs and eliminations

 

(61

)

 

 

(70

)

 

 

(74

)

 

 

(91

)

 

 

(296

)

 

 

Amortization of purchased intangible assets

 

(138

)

 

 

(141

)

 

 

(141

)

 

 

(143

)

 

 

(563

)

 

 

Restructuring charges

 

—

 

 

 

(234

)

 

 

(376

)

 

 

(190

)

 

 

(800

)

 

 

Acquisition-related charges

 

(86

)

 

 

(126

)

 

 

(40

)

 

 

(28

)

 

 

(280

)

 

 

In-process research and development charges

 

—

 

 

 

—

 

 

 

—

 

 

 

(1

)

 

 

(1

)

 

 

Interest and other, net

 

51

 

 

 

(20

)

 

 

10

 

 

 

(20

)

 

 

21

 

 

 

(Losses) gains on investments

 

(5

)

 

 

(12

)

 

 

(24

)

 

 

12

 

 

 

(29

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total HP Consolidated Earnings Before Taxes

 

$

925

 

 

 

$

611

 

 

 

$

287

 

 

 

$

1,065

 

 

 

$

2,888

 

 

 

 

 

 

Three months ended

 

 

 

Twelve months ended

 

 

 

 

 

January 31, 2004

 

 

 

April 30,
2004

 

 

 

July 31,
2004

 

 

 

October 31,
2004

 

 

 

October 31,
2004

 

 

 

Net revenue: (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Imaging and Printing

 

$

5,910

 

 

 

$

6,098

 

 

 

$

5,648

 

 

 

$

6,543

 

 

 

$

24,199

 

 

 

Personal Systems

 

6,187

 

 

 

5,991

 

 

 

5,904

 

 

 

6,540

 

 

 

24,622

 

 

 

Imaging and Personal Systems Group

 

12,097

 

 

 

12,089

 

 

 

11,552

 

 

 

13,083

 

 

 

48,821

 

 

 

Enterprise Storage and Servers

 

3,700

 

 

 

3,961

 

 

 

3,333

 

 

 

4,080

 

 

 

$

15,074

 

 

 

Software

 

203

 

 

 

225

 

 

 

225

 

 

 

280

 

 

 

933

 

 

 

HP Services

 

3,176

 

 

 

3,508

 

 

 

3,483

 

 

 

3,681

 

 

 

13,848

 

 

 

Technology Solutions Group

 

7,079

 

 

 

7,694

 

 

 

7,041

 

 

 

8,041

 

 

 

29,855

 

 

 

Financing

 

441

 

 

 

469

 

 

 

488

 

 

 

497

 

 

 

1,895

 

 

 

Corporate Investments

 

103

 

 

 

114

 

 

 

113

 

 

 

119

 

 

 

449

 

 

 

Total segments

 

19,720

 

 

 

20,366

 

 

 

19,194

 

 

 

21,740

 

 

 

81,020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Eliminations of intersegment net revenue and other

 

(206

)

 

 

(253

)

 

 

(305

)

 

 

(351

)

 

 

(1,115

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total HP Consolidated

 

$

19,514

 

 

 

$

20,113

 

 

 

$

18,889

 

 

 

$

21,389

 

 

 

$

79,905

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings from operations: (1)

 

 

 

Op 

%

 

 

Op 

%

 

 

Op 

%

 

 

Op 

%

 

 

Op 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Imaging and Printing

 

$

967

 

16.4

%

$

952

 

15.6

%

836

 

14.8

%

$

1,088

 

16.6

%

$

3,843

 

15.9

%

Personal Systems

 

61

 

1.0

%

44

 

0.7

%

23

 

0.4

%

77

 

1.2

%

205

 

0.8

%

Imaging and Personal Systems Group

 

1,028

 

8.5

%

996

 

8.2

%

859

 

7.4

%

1,165

 

8.9

%

4,048

 

8.3

%

Enterprise Storage and Servers

 

153

 

4.1

%

119

 

3.0

%

(211

)

(6.3

)%

100

 

2.5

%

161

 

1.1

%

Software

 

(49

)

(24.1

)%

(52

)

(23.1

)%

(48

)

(21.3

)%

(7

)

(2.5

)%

(156

)

(16.7

)%

HP Services

 

261

 

8.2

%

332

 

9.5

%

314

 

9.0

%

375

 

10.2

%

1,282

 

9.3

%

Technology Solutions Group

 

365

 

5.2

%

399

 

5.2

%

55

 

0.8

%

468

 

5.8

%

1,287

 

4.3

%

Financing

 

29

 

6.6

%

35

 

7.5

%

42

 

8.6

%

19

 

3.8

%

125

 

6.6

%

Corporate Investments

 

(36

)

(35.0

)%

(48

)

(42.1

)%

(52

)

(46.0

)%

(43

)

(36.1

)%

(179

)

(39.9

)%

Total segments

 

1,386

 

7.0

%

1,382

 

6.8

%

904

 

4.7

%

1,609

 

7.4

%

5,281

 

6.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate and unallocated costs and eliminations

 

(30

)

 

 

(40

)

 

 

(58

)

 

 

(118

)

 

 

(246

)

 

 

Amortization of purchased intangible assets

 

(144

)

 

 

(148

)

 

 

(146

)

 

 

(165

)

 

 

(603

)

 

 

Restructuring charges

 

(54

)

 

 

(38

)

 

 

(9

)

 

 

(13

)

 

 

(114

)

 

 

Acquisition-related charges

 

(15

)

 

 

(9

)

 

 

(6

)

 

 

(24

)

 

 

(54

)

 

 

In-process research and development charges

 

—

 

 

 

(9

)

 

 

(28

)

 

 

—

 

 

 

(37

)

 

 

Interest and other, net

 

11

 

 

 

2

 

 

 

20

 

 

 

2

 

 

 

35

 

 

 

(Losses) gains on investments

 

9

 

 

 

(5

)

 

 

1

 

 

 

(1

)

 

 

4

 

 

 

Dispute settlement

 

—

 

 

 

(70

)

 

 

—

 

 

 

—

 

 

 

(70

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total HP Consolidated Earnings Before Taxes

 

$

1,163

 

 

 

$

1,065

 

 

 

$

678

 

 

 

$

1,290

 

 

 

$

4,196

 

 

 

 

(1)   Reflects an aggregation of HP’s Personal Systems Group and Imaging and Printing Group to provide a supplementary view of HP’s business.  In addition, certain fiscal 2005 organizational realignments on a backward-looking basis provide improved visibility and comparability. In any given quarter, no segment's operating profit changed more than $8 million as a result of these realignments, with typical movements ranging from $3 million to $5 million. 


 

HEWLETT-PACKARD COMPANY AND SUBSIDIARIES

SEGMENT / BUSINESS UNIT INFORMATION

(Unaudited)

(In millions)

 

 

 

Three months ended

 

Twelve months
ended

 

Three months ended

 

Twelve months
ended

 

 

 

January 31,
2003

 

April 30,
2003

 

July 31,
2003

 

October 31,
2003

 

October 31,
2003

 

January 31,
2004

 

April 30,
2004

 

July 31,
2004

 

October 31,
2004

 

October 31,
2004

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net revenue: (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial Hardware

 

1,529

 

1,453

 

1,425

 

1,608

 

6,015

 

1,547

 

1,591

 

1,546

 

1,706

 

6,390

 

Consumer Hardware

 

1,206

 

1,011

 

839

 

1,310

 

4,366

 

1,276

 

986

 

834

 

1,239

 

4,335

 

Supplies

 

2,815

 

3,004

 

2,921

 

3,264

 

12,004

 

3,026

 

3,451

 

3,192

 

3,528

 

13,197

 

Other

 

48

 

44

 

41

 

51

 

184

 

61

 

70

 

76

 

70

 

277

 

Imaging and Printing Group

 

5,598

 

5,512

 

5,226

 

6,233

 

22,569

 

5,910

 

6,098

 

5,648

 

6,543

 

24,199

 

Desktops

 

3,179

 

3,060

 

2,726

 

3,443

 

12,408

 

3,516

 

3,468

 

3,428

 

3,619

 

14,031

 

Notebooks

 

1,503

 

1,601

 

1,795

 

2,023

 

6,922

 

2,142

 

2,011

 

2,003

 

2,267

 

8,423

 

Workstations

 

204

 

233

 

226

 

260

 

923

 

235

 

262

 

248

 

273

 

1,018

 

Handhelds

 

202

 

175

 

161

 

202

 

740

 

253

 

191

 

169

 

273

 

886

 

Other

 

54

 

58

 

47

 

58

 

217

 

41

 

59

 

56

 

108

 

264

 

Personal Systems Group

 

5,142

 

5,127

 

4,955

 

5,986

 

21,210

 

6,187

 

5,991

 

5,904

 

6,540

 

24,622

 

Imaging and Personal Systems Group

 

10,740

 

10,639

 

10,181

 

12,219

 

43,779

 

12,097

 

12,089

 

11,552

 

13,083

 

48,821

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Business Critical Systems

 

982

 

943

 

901

 

1,009

 

3,835

 

915

 

972

 

828

 

1,044

 

3,759

 

Industry Standard Servers

 

1,709

 

1,831

 

1,779

 

1,936

 

7,255

 

1,959

 

2,107

 

1,815

 

2,237

 

8,118

 

Storage

 

849

 

894

 

824

 

886

 

3,453

 

827

 

882

 

693

 

799

 

3,201

 

Other

 

—

 

(1

)

(2

)

—

 

(3

)

(1

)

—

 

(3

)

—

 

(4

)

Enterprise Storage and Servers

 

3,540

 

3,667

 

3,502

 

3,831

 

14,540

 

3,700

 

3,961

 

3,333

 

4,080

 

15,074

 

OpenView

 

122

 

117

 

115

 

132

 

486

 

133

 

135

 

145

 

172

 

585

 

OpenCall & Other

 

62

 

65

 

77

 

91

 

295

 

70

 

90

 

80

 

108

 

348

 

Software

 

184

 

182

 

192

 

223

 

781

 

203

 

225

 

225

 

280

 

933

 

Technology Services

 

1,943

 

2,015

 

2,089

 

2,107

 

8,154

 

2,090

 

2,219

 

2,245

 

2,332

 

8,886

 

Managed Services

 

418

 

407

 

440

 

517

 

1,782

 

524

 

609

 

620

 

693

 

2,446

 

Consulting & Integration

 

621

 

632

 

579

 

634

 

2,466

 

560

 

681

 

615

 

659

 

2,515

 

Other

 

—

 

—

 

—

 

—

 

—

 

2

 

(1

)

3

 

(3

)

1

 

HP Services

 

2,982

 

3,054

 

3,108

 

3,258

 

12,402

 

3,176

 

3,508

 

3,483

 

3,681

 

13,848

 

Technology Solutions Group

 

6,706

 

6,903

 

6,802

 

7,312

 

27,723

 

7,079

 

7,694

 

7,041

 

8,041

 

29,855

 

Financing

 

517

 

501

 

442

 

461

 

1,921

 

441

 

469

 

488

 

497

 

1,895

 

Corporate Investments

 

77

 

84

 

88

 

96

 

345

 

103

 

114

 

113

 

119

 

449

 

Total segments

 

18,040

 

18,127

 

17,513

 

20,088

 

73,768

 

19,720

 

20,366

 

19,194

 

21,740

 

81,020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Eliminations of intersegment net revenue and other

 

(163

)

(144

)

(165

)

(235

)

(707

)

(206

)

(253

)

(305

)

(351

)

(1,115

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total HP Consolidated

 

$

17,877

 

$

17,983

 

$

17,348

 

$

19,853

 

$

73,061

 

$

19,514

 

$

20,113

 

$

18,889

 

$

21,389

 

$

79,905

 

 

(1)   Reflects an aggregation of HP’s Personal Systems Group and Imaging and Printing Group to provide a supplementary view of HP’s business.  In  addition, certain fiscal 2005 organizational realignments on a backward-looking basis provide improved visibility and comparability. In any given quarter, no segment's operating profit changed more than $8 million as a result of these realignments, with typical movements ranging from $3 million to $5 million.