HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS
(Unaudited)
(In millions except per share amounts)
Three months ended
----------------------------------------
October 31, July 31, October 31,
2012 2012 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.
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.
HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
ADJUSTMENTS TO GAAP NET REVENUE, NET EARNINGS, EARNINGS FROM OPERATIONS,
OPERATING MARGIN AND EARNINGS PER SHARE
(Unaudited)
(In millions except per share amounts)
Three Three
months Three months
ended Diluted months Diluted ended Diluted
October earnings ended earnings October earnings
31, per July 31, per 31, per
2012 share 2012 share 2011 share
-------- -------- -------- -------- -------- --------
GAAP net revenue $ 29,959 $ 29,669 $ 32,122
Non-GAAP adjustments:
WebOS device contra
revenue, net(a) - - 142
-------- -------- --------
Non-GAAP net revenue $ 29,959 $ 29,669 $ 32,264
======== ======== ========
GAAP net (loss)
earnings $(6,854) $ (3.49) $(8,857) $ (4.49) $ 239 $ 0.12
Non-GAAP adjustments:
Amortization of
purchased intangible
assets 372 0.19 476 0.25 411 0.20
Impairment of
goodwill and
purchased intangible
assets(b) 8,847 4.51 9,188 4.66 885 0.44
Restructuring charges 378 0.19 1,795 0.91 179 0.09
Acquisition-related
charges in earnings
from operations 3 - 3 - 114 0.06
Wind down of the
webOs device
business(c) - - - - 755 0.38
Wind down of non-
strategic
businesses(d) - - 108 0.05 - -
Acquisition-related
charges in interest
and other, net(e) - - - - 276 0.14
Adjustments for
taxes(f) (465) (0.24) (740) (0.38) (509) (0.26)
-------- -------- -------- -------- -------- --------
Non-GAAP net earnings $ 2,281 $ 1.16 $ 1,973 $ 1.00 $ 2,350 $ 1.17
======== ======== ======== ======== ======== ========
GAAP (loss) earnings
from operations $(6,488) $(8,833) $ 795
Non-GAAP adjustments:
Amortization of
purchased intangible
assets 372 476 411
Impairment of
goodwill and
purchased intangible
assets(b) 8,847 9,188 885
Restructuring charges 378 1,795 179
Acquisition-related
charges in earnings
from operations 3 3 114
Wind down of the
webOs device
business(c) - - 755
Wind down of non-
strategic
businesses(d) - 108 -
-------- -------- --------
Non-GAAP earnings from
operations $ 3,112 $ 2,737 $ 3,139
======== ======== ========
GAAP operating margin (22%) (30%) 2%
Non-GAAP adjustments 32% 39% 8%
-------- -------- --------
Non-GAAP operating
margin 10% 9% 10%
======== ======== ========
(a) Includes contra revenue primarily associated with sales incentive
programs to wind down the webOS device business, net of webOS device
revenue.
(b) For the period ended October 31, 2012, represents a goodwill and
intangible asset impairment charge of $8.8 billion associated with the
Autonomy reporting unit within the Software segment. For the period
ended July 31, 2012, represents a goodwill impairment charge of $8.0
billion associated with the Services segment and an intangible asset
impairment charge of $1.2 billion associated with the "Compaq" trade
name within the Personal Systems segment (formerly known as the
Personal Systems Group segment). For the period ended October 31, 2011,
includes impairment charges to goodwill and purchased intangible assets
associated with the acquisition of Palm, Inc. on July 1, 2010 recorded
as result of the decision announced on August 18, 2011 to wind down the
webOS device business.
(c) Includes primarily expenses and adjustments for supplier-related
obligations and contra revenue associated with sales incentive programs
related to winding down the webOS device business.
(d) Represents primarily contract-related charges, including inventory
write-downs, related to winding down certain retail publishing business
activities within the Printing segment (formerly known as the Imaging
and Printing Group Segment).
(e) Includes primarily the cost of the British pound options bought to
limit foreign exchange rate risk in connection with the Autonomy
acquisition.
(f) For the periods ended October 31, 2012 and July 31, 2012, adjustments
for taxes is net of valuation allowances of $0.5 billion and $0.8
billion provided for certain deferred tax assets, respectively.
HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
ADJUSTMENTS TO GAAP NET REVENUE, NET EARNINGS, EARNINGS FROM OPERATIONS,
OPERATING MARGIN AND EARNINGS PER SHARE
(Unaudited)
(In millions except per share amounts)
Twelve Twelve
months months
ended ended
October Diluted October Diluted
31, earnings 31, earnings
2012 per share 2011 per share
---------- ---------- ---------- ----------
GAAP net revenue $ 120,357 $ 127,245
Non-GAAP adjustments:
WebOS device contra revenue,
net(a) - 142
---------- ----------
Non-GAAP net revenue $ 120,357 $ 127,387
========== ==========
GAAP net (loss) earnings $ (12,650) $ (6.41) $ 7,074 $ 3.32
Non-GAAP adjustments:
Amortization of purchased
intangible assets 1,784 0.90 1,607 0.75
Impairment of goodwill and
purchased intangible
assets(b) 18,035 9.14 885 0.42
Restructuring charges 2,266 1.15 645 0.30
Acquisition-related charges in
earnings from operations 45 0.02 182 0.09
Wind down of the webOs device
business(c) (36) (0.02) 755 0.35
Wind down of non-strategic
businesses(d) 108 0.05 - -
Acquisition-related charges in
interest and other, net(e) - - 276 0.13
Adjustments for taxes(f) (1,517) (0.78) (1,045) (0.48)
---------- ---------- ---------- ----------
Non-GAAP net earnings $ 8,035 $ 4.05 $ 10,379 $ 4.88
========== ========== ========== ==========
GAAP (loss) earnings from
operations $ (11,057) $ 9,677
Non-GAAP adjustments:
Amortization of purchased
intangible assets 1,784 1,607
Impairment of goodwill and
purchased intangible
assets(b) 18,035 885
Restructuring charges 2,266 645
Acquisition-related charges in
earnings from operations 45 182
Wind down of the webOs device
business(c) (36) 755
Wind down of non-strategic
businesses(d) 108 -
---------- ----------
Non-GAAP earnings from
operations $ 11,145 $ 13,751
========== ==========
GAAP operating margin (9%) 8%
Non-GAAP adjustments 18% 3%
---------- ----------
Non-GAAP operating margin 9% 11%
========== ==========
(a) Includes contra revenue primarily associated with sales incentive
programs to wind down the webOS device business, net of the webOS
device revenue.
(b) For the period ended October 31, 2012, represents a goodwill and
intangible asset impairment charge of $8.8 billion associated with the
Autonomy reporting unit within the Software segment, a goodwill
impairment charge of $8.0 billion associated with the Services segment
and an intangible asset impairment charge of $1.2 billion associated
with the "Compaq" trade name within the Personal Systems segment. For
the period ended October 31, 2011, includes impairment charges to
goodwill and purchased intangible assets associated with the
acquisition of Palm, Inc. on July 1, 2010 recorded as result of the
decision announced on August 18, 2011 to wind down the webOS device
business.
(c) Includes primarily expenses and adjustments for supplier-related
obligations and contra revenue associated with sales incentive programs
related to winding down the webOS device business.
(d) Represents primarily contract-related charges, including inventory
write-downs, related to winding down certain retail publishing business
activities within the Printing segment.
(e) Includes primarily the cost of the British pound options bought to
limit foreign exchange rate risk in connection with the Autonomy
acquisition.
(f) For the period ended October 31, 2012, adjustments for taxes is net of
valuation allowances of $1.3 billion provided for certain deferred tax
assets.
HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(In millions)
October 31, October 31,
2012 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
=========== ===========
HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
(In millions)
Three months Twelve months
ended ended
October 31, October 31,
2012 2012
-------------- --------------
Cash flows from operating activities:
Net loss $ (6,854) $ (12,650)
Adjustments to reconcile net earnings to
net cash provided by operating
activities:
Depreciation and amortization 1,201 5,095
Impairment of goodwill and purchased
intangible assets 8,847 18,035
Stock-based compensation expense 141 635
Provision for bad debt and inventory 165 419
Restructuring charges 378 2,266
Deferred taxes on earnings (21) (711)
Excess tax benefit from stock-based
compensation - (12)
Other, net (65) 265
Changes in operating assets and
liabilities:
Accounts and financing receivables (1,166) 1,269
Inventory 892 890
Accounts payable 782 (1,414)
Taxes on earnings (280) (320)
Restructuring (368) (840)
Other assets and liabilities 407 (2,356)
-------------- --------------
Net cash provided by operating
activities 4,059 10,571
-------------- --------------
Cash flows from investing activities:
Investment in property, plant and
equipment (873) (3,706)
Proceeds from sale of property, plant
and equipment 296 617
Purchases of available-for-sale
securities and other investments (179) (972)
Maturities and sales of available-for-
sale securities and other investments 146 662
Payments made in connection with
business acquisitions, net of cash
acquired - (141)
Proceeds from business divestiture, net - 87
-------------- --------------
Net cash used in investing
activities (610) (3,453)
-------------- --------------
Cash flows from financing activities:
Repayment of commercial paper and notes
payable, net (222) (2,775)
Issuance of debt 54 5,154
Payment of debt (1,111) (4,333)
Issuance of common stock under employee
stock plans 6 716
Repurchase of common stock (124) (1,619)
Excess tax benefit from stock-based
compensation - 12
Cash dividends paid (260) (1,015)
-------------- --------------
Net cash used in financing
activities (1,657) (3,860)
-------------- --------------
Increase in cash and cash equivalents 1,792 3,258
Cash and cash equivalents at beginning of
period 9,509 8,043
-------------- --------------
Cash and cash equivalents at end of period $ 11,301 $ 11,301
============== ==============
