HP Reports Fourth Quarter and Fiscal 2013 Results
PALO ALTO, CA--(Marketwired - Nov 26, 2013) - HP (NYSE:
HPQ)
- Fourth quarter non-GAAP diluted net earnings per share of
$1.01, down 13% from the prior-year period
- Fourth quarter GAAP diluted net earnings per share of $0.73, up
from GAAP diluted net loss per share of $3.49 in the prior-year
period
- Fourth quarter net revenue of $29.1 billion, down 3% from the
prior-year period and down 1% when adjusted for the effects of
currency
- Fourth quarter cash flow from operations of $2.8 billion, down
31% from the prior-year period
- Returned $763 million to shareholders in the form of dividends
and share repurchases in the fourth quarter
- Improved operating company net debt position by $1.3 billion to
an operating company net cash position in the fourth quarter, the
seventh consecutive quarterly improvement of over $1 billion
- Fiscal 2013 non-GAAP diluted net earnings per share of $3.56,
within the previously provided outlook of $3.53 to $3.57
- Fiscal 2013 GAAP diluted net earnings per share of $2.62, below
the previously provided outlook of $2.67 to $2.71
- Fiscal 2013 net revenue of $112.3 billion, down 7% from the
prior year and down 5% when adjusted for the effects of
currency
HP fourth quarter and fiscal 2013 financial performance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q4 FY13 |
|
|
Q4 FY12 |
|
|
Y/Y |
|
|
FY13 |
|
|
FY12 |
|
|
Y/Y |
|
GAAP
net revenue ($B) |
|
$ |
29.1 |
|
|
$ |
30.0 |
|
|
(3 |
%) |
|
$ |
112.3 |
|
|
$ |
120.4 |
|
|
(7 |
%) |
GAAP
operating margin |
|
|
6.6 |
% |
|
|
(21.7 |
%) |
|
28.3 pts. |
|
|
|
6.4 |
% |
|
|
(9.2 |
%) |
|
15.6 pts. |
|
GAAP
net earnings (loss) ($B) |
|
$ |
1.4 |
|
|
$ |
(6.9 |
) |
|
|
|
|
$ |
5.1 |
|
|
$ |
(12.7 |
) |
|
|
|
GAAP
diluted net earnings (loss) per share |
|
$ |
0.73 |
|
|
$ |
(3.49 |
) |
|
|
|
|
$ |
2.62 |
|
|
$ |
(6.41 |
) |
|
|
|
Non-GAAP operating margin |
|
|
9.0 |
% |
|
|
10.4 |
% |
|
(1.4 pts. |
) |
|
|
8.5 |
% |
|
|
9.3 |
% |
|
(0.8 pts. |
) |
Non-GAAP net earnings ($B) |
|
$ |
2.0 |
|
|
$ |
2.3 |
|
|
(14 |
%) |
|
$ |
6.9 |
|
|
$ |
8.0 |
|
|
(14 |
%) |
Non-GAAP diluted net earnings per share |
|
$ |
1.01 |
|
|
$ |
1.16 |
|
|
(13 |
%) |
|
$ |
3.56 |
|
|
$ |
4.05 |
|
|
(12 |
%) |
Cash
flow from operations ($B) |
|
$ |
2.8 |
|
|
$ |
4.1 |
|
|
(31 |
%) |
|
$ |
11.6 |
|
|
$ |
10.6 |
|
|
10 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Information about HP's use of non-GAAP financial information is
provided under "Use of Non-GAAP Financial Information" below.
HP today announced financial results for its fiscal fourth
quarter and fiscal year ended Oct. 31, 2013.
Fourth quarter GAAP diluted net earnings per share (EPS) was
$0.73, up from a GAAP diluted net loss per share of $3.49 in the
prior-year period. Fourth quarter non-GAAP diluted net EPS was
$1.01, down from $1.16 in the prior-year period. Fourth quarter
non-GAAP net earnings and non-GAAP diluted net EPS exclude
after-tax costs of $545 million and $0.28 per diluted share,
respectively, related to restructuring charges, the amortization of
intangible assets and acquisition-related charges.
Fourth quarter net revenue of $29.1 billion was down 3% from the
prior-year period and down 1% when adjusted for the effects of
currency.
Fiscal 2013 GAAP diluted net EPS was $2.62, up from a GAAP
diluted net loss per share of $6.41 in the prior-year period and
below the previously provided outlook of $2.67 to $2.71 per share.
Fiscal 2013 non-GAAP diluted net EPS was $3.56, down from $4.05 in
the prior-year period and within the previously provided outlook of
$3.53 to $3.57 per share. Fiscal 2013 non-GAAP net earnings and
non-GAAP diluted net EPS exclude after-tax costs of $1.8 billion
and $0.94 per diluted share, respectively, related to the
amortization of intangible assets, restructuring charges and
acquisition-related charges.
Fiscal 2013 net revenue of $112.3 billion was down 7% from the
prior year and down 5% when adjusted for the effects of
currency.
"Through improved execution, strong cost management, and
with the support of our customers and partners, HP ended fiscal
2013 on a high note," said Meg Whitman, HP president and chief
executive officer. "Our Q4 results demonstrate that HP's turnaround
remains on track heading into fiscal 2014. While we still have much
more work to do, our business units and their core assets are
delivering on HP's strategy to help customers thrive by providing
solutions for the New Style of IT."
Outlook For the first quarter of fiscal 2014, HP estimates
non-GAAP diluted net EPS to be in the range of $0.82 to $0.86 and
GAAP diluted net EPS to be in the range of $0.60 to $0.64. First
quarter fiscal 2014 non-GAAP diluted net EPS estimates exclude
after-tax costs of approximately $0.22 per share, related primarily
to the amortization of intangible assets and restructuring
charges.
For fiscal 2014, HP estimates non-GAAP diluted net EPS to be in
the range of $3.55 to $3.75 and GAAP diluted net EPS to be in the
range of $2.85 to $3.05, in line with the outlook HP previously
communicated at its Oct. 9 Securities Analyst Meeting. Fiscal 2014
non-GAAP diluted net EPS estimates exclude after-tax costs of
approximately $0.70 per share, related primarily to the
amortization of intangible assets and restructuring charges.
Asset management HP generated $2.8 billion in cash flow from
operations in the fourth quarter, down 31% from the prior-year
period. Inventory ended the quarter at $6.0 billion, down 1 day
year over year to 24 days. Accounts receivable ended the quarter at
$15.9 billion, flat year over year at 49 days. Accounts payable
ended the quarter at $14.0 billion, up 3 days year over year to 56
days. HP's dividend payment of $0.1452 per share in the fourth
quarter resulted in cash usage of $284 million. HP also utilized
$479 million of cash during the quarter to repurchase approximately
21.5 million shares of common stock in the open market. HP exited
the quarter with $12.5 billion in gross cash.
Fourth quarter fiscal 2013 segment results
- Personal Systems revenue was down 2% year over year with a 3.0%
operating margin. Commercial revenue increased 4% and Consumer
revenue declined 10%. Total units were up 2% with Desktops units
down 5% and Notebooks units up 3%.
- Printing revenue was down 1% year over year with a 17.7%
operating margin. Total hardware units were up 6% with Commercial
hardware units up 9% and Consumer hardware units up 4%. Supplies
revenue was down 4%.
- Enterprise Group revenue was up 2% year over year with a 14.5%
operating margin. Networking revenue was up 3%, Industry Standard
Servers revenue was up 10%, Business Critical Systems revenue was
down 17%, Storage revenue was up 1% and Technology Services revenue
was down 6%.
- Enterprise Services revenue declined 9% year over year with a
4.4% operating margin. Application and Business Services revenue
was down 10%, and Infrastructure Technology Outsourcing revenue
declined 9%.
- Software revenue was down 9% year over year with a 30.8%
operating margin. Support revenue was up 4%, license revenue was
down 24%, professional services revenue was down 13% and
software-as-a-service ("SaaS") revenue was up 15%.
- HP Financial Services revenue was down 6% year over year with a
5% decrease in net portfolio assets and a 3% decrease in financing
volume. The business delivered an operating margin of 11.2%.
More information on HP's earnings, including additional
financial analysis and an earnings overview presentation, is
available on HP's Investor Relations website at
www.hp.com/investor/home.
HP's Q4 FY13 earnings conference call is accessible via an audio
webcast at www.hp.com/investor/2013Q4earnings.
About HP HP creates new possibilities for technology to have a
meaningful impact on people, businesses, governments and society.
With the broadest technology portfolio spanning printing, personal
systems, software, services and IT infrastructure, HP delivers
solutions for customers' most complex challenges in every region of
the world. More information about HP is available at
http://www.hp.com.
Use of non-GAAP financial information To supplement HP's
consolidated condensed financial statements presented on a
generally accepted accounting principles (GAAP) basis, HP provides
non-GAAP operating profit, non-GAAP operating margin, non-GAAP net
earnings, non-GAAP diluted net earnings per share, gross cash, free
cash flow, net debt, net cash, operating company net debt and
operating company net cash. HP also provides forecasts of non-GAAP
diluted earnings per share. A reconciliation of the adjustments to
GAAP results for this quarter and full year and prior periods is
included in the tables below or elsewhere in the materials
accompanying this news release. In addition, an explanation of the
ways in which HP's management uses these non-GAAP measures to
evaluate its business, the substance behind HP's management's
decision to use these non-GAAP measures, the material limitations
associated with the use of these non-GAAP measures, the manner in
which HP's management compensates for those limitations, and the
substantive reasons why HP's management believes that these
non-GAAP measures provide useful information to investors is
included under "Use of Non-GAAP Financial Measures" after the
tables below. This additional non-GAAP financial information is not
meant to be considered in isolation or as a substitute for
operating profit, operating margin, net earnings, diluted net
earnings per share, cash and cash equivalents, cash flow from
operations or total company debt prepared in accordance with
GAAP.
Forward-looking statements This news release contains
forward-looking statements that involve risks, uncertainties and
assumptions. If the risks or uncertainties ever materialize or the
assumptions prove incorrect, the results of HP may differ
materially from those expressed or implied by such forward-looking
statements and assumptions. All statements other than statements of
historical fact are statements that could be deemed forward-looking
statements, including but not limited to any projections of
revenue, margins, expenses, HP's effective tax rate, earnings,
earnings per share, cash flows, benefit plan funding, share
repurchases, currency exchange rates or other financial items; any
projections of the amount, timing or impact of cost savings or
restructuring charges; any statements of the plans, strategies and
objectives of management for future operations, including the
execution of restructuring plans and any resulting cost savings or
revenue or profitability improvements; any statements concerning
the expected development, performance, market share or competitive
performance relating to products or services; any statements
regarding current or future macroeconomic trends or events and the
impact of those trends and events on HP and its financial
performance; any statements regarding pending investigations,
claims or disputes; any statements of expectation or belief; and
any statements of assumptions underlying any of the foregoing.
Risks, uncertainties and assumptions include the need to address
the many challenges facing HP's businesses; the competitive
pressures faced by HP's businesses; risks associated with executing
HP's strategy; the impact of macroeconomic and geopolitical trends
and events; the need to manage third-party suppliers and the
distribution of HP's products and services effectively; the
protection of HP's intellectual property assets, including
intellectual property licensed from third parties; risks associated
with HP's international operations; the development and transition
of new products and services and the enhancement of existing
products and services to meet customer needs and respond to
emerging technological trends; the execution and performance of
contracts by HP and its suppliers, customers and partners; the
hiring and retention of key employees; integration and other risks
associated with business combination and investment transactions;
the execution, timing and results of restructuring plans, including
estimates and assumptions related to the cost and the anticipated
benefits of implementing those plans; the resolution of pending
investigations, claims and disputes; and other risks that are
described in HP's Annual Report on Form 10-K for the fiscal year
ended October 31, 2012 and HP's other filings with the Securities
and Exchange Commission, including HP's Quarterly Report on Form
10-Q for the fiscal quarter ended July 31, 2013. As in prior
periods, the financial information set forth in this release,
including tax-related items, reflects estimates based on
information available at this time. While HP believes these
estimates to be meaningful, these amounts could differ materially
from actual reported amounts in HP's Annual Report on Form 10-K for
the fiscal year ended October 31, 2013. In particular, determining
HP's actual tax balances and provisions as of October 31, 2013
requires extensive internal and external review of tax data
(including consolidating and reviewing the tax provisions of
numerous domestic and foreign entities), which is being completed
in the ordinary course of preparing HP's Annual Report on Form
10-K. HP assumes no obligation and does not intend to update these
forward-looking statements.
|
|
HEWLETT-PACKARD COMPANY AND SUBSIDIARIES |
|
CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS |
|
(Unaudited) |
|
(In millions except per share amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
|
|
Oct 31, 2013 |
|
|
July 31, 2013 |
|
|
Oct 31, 2012 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenue |
|
$ |
29,131 |
|
|
$ |
27,226 |
|
|
$ |
29,959 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales |
|
|
22,437 |
|
|
|
20,859 |
|
|
|
22,711 |
|
|
Research and development |
|
|
729 |
|
|
|
797 |
|
|
|
909 |
|
|
Selling, general and administrative |
|
|
3,351 |
|
|
|
3,274 |
|
|
|
3,227 |
|
|
Amortization of intangible assets |
|
|
317 |
|
|
|
356 |
|
|
|
372 |
|
|
Impairment of goodwill and intangible assets |
|
|
- |
|
|
|
- |
|
|
|
8,847 |
|
|
Restructuring charges |
|
|
371 |
|
|
|
81 |
|
|
|
378 |
|
|
Acquisition-related charges |
|
|
3 |
|
|
|
4 |
|
|
|
3 |
|
|
|
Total
costs and expenses |
|
|
27,208 |
|
|
|
25,371 |
|
|
|
36,447 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) from operations |
|
|
1,923 |
|
|
|
1,855 |
|
|
|
(6,488 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and other, net |
|
|
(103 |
) |
|
|
(146 |
) |
|
|
(188 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) before taxes |
|
|
1,820 |
|
|
|
1,709 |
|
|
|
(6,676 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for taxes |
|
|
(406 |
) |
|
|
(319 |
) |
|
|
(178 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings (loss) |
|
$ |
1,414 |
|
|
$ |
1,390 |
|
|
$ |
(6,854 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings (loss) per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.74 |
|
|
$ |
0.72 |
|
|
$ |
(3.49 |
) |
|
Diluted |
|
$ |
0.73 |
|
|
$ |
0.71 |
|
|
$ |
(3.49 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash dividends declared per share |
|
$ |
- |
|
|
$ |
0.29 |
|
|
$ |
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average shares used to compute net earnings
(loss) per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
1,918 |
|
|
|
1,929 |
|
|
|
1,964 |
|
|
Diluted |
|
|
1,940 |
|
|
|
1,948 |
|
|
|
1,964 |
|
|
|
|
HEWLETT-PACKARD COMPANY AND SUBSIDIARIES |
CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS |
(In
millions except per share amounts) |
|
|
|
|
|
|
|
|
|
Twelve months ended |
|
|
|
Oct 31, |
|
|
|
2013 |
|
|
2012 |
|
|
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenue |
|
$ |
112,298 |
|
|
$ |
120,357 |
|
|
|
|
|
|
|
|
|
|
Costs and expenses: |
|
|
|
|
|
|
|
|
|
Cost of sales |
|
|
86,380 |
|
|
|
92,385 |
|
|
Research and development |
|
|
3,135 |
|
|
|
3,399 |
|
|
Selling, general and administrative |
|
|
13,267 |
|
|
|
13,500 |
|
|
Amortization of intangible assets |
|
|
1,373 |
|
|
|
1,784 |
|
|
Impairment of goodwill and intangible assets |
|
|
- |
|
|
|
18,035 |
|
|
Restructuring charges |
|
|
990 |
|
|
|
2,266 |
|
|
Acquisition-related charges |
|
|
22 |
|
|
|
45 |
|
|
|
Total
costs and expenses |
|
|
105,167 |
|
|
|
131,414 |
|
|
|
|
|
|
|
|
|
|
Earnings (loss) from operations |
|
|
7,131 |
|
|
|
(11,057 |
) |
|
|
|
|
|
|
|
|
|
Interest and other, net |
|
|
(621 |
) |
|
|
(876 |
) |
|
|
|
|
|
|
|
|
|
Earnings (loss) before taxes |
|
|
6,510 |
|
|
|
(11,933 |
) |
|
|
|
|
|
|
|
|
|
Provision for taxes |
|
|
(1,397 |
) |
|
|
(717 |
) |
|
|
|
|
|
|
|
|
|
Net earnings (loss) |
|
$ |
5,113 |
|
|
$ |
(12,650 |
) |
|
|
|
|
|
|
|
|
|
Net earnings (loss) per share: |
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
2.64 |
|
|
$ |
(6.41 |
) |
|
Diluted |
|
$ |
2.62 |
|
|
$ |
(6.41 |
) |
|
|
|
|
|
|
|
|
|
Cash dividends declared per share |
|
$ |
0.55 |
|
|
$ |
0.50 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average shares used to compute net earnings
(loss) per share: |
|
|
|
|
|
|
|
|
|
Basic |
|
|
1,934 |
|
|
|
1,974 |
|
|
Diluted |
|
|
1,950 |
|
|
|
1,974 |
|
|
|
|
|
|
|
HEWLETT-PACKARD COMPANY AND SUBSIDIARIES |
|
ADJUSTMENTS TO GAAP NET EARNINGS, EARNINGS FROM
OPERATIONS, |
|
OPERATING MARGIN AND EARNINGS PER SHARE |
|
(Unaudited) |
|
(In millions except per share amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended Oct 31, 2013 |
|
Diluted earnings per share |
|
Three months ended July 31, 2013 |
|
Diluted earnings per share |
|
Three months ended Oct 31, 2012 |
|
Diluted earnings per share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net earnings (loss) |
|
$ |
1,414 |
|
$ |
0.73 |
|
$ |
1,390 |
|
$ |
0.71 |
|
$ |
(6,854 |
) |
$ |
(3.49 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of intangible assets |
|
|
317 |
|
|
0.16 |
|
|
356 |
|
|
0.19 |
|
|
372 |
|
|
0.19 |
|
|
Impairment of goodwill and intangible assets(a) |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
8,847 |
|
|
4.51 |
|
|
Restructuring charges |
|
|
371 |
|
|
0.19 |
|
|
81 |
|
|
0.04 |
|
|
378 |
|
|
0.19 |
|
|
Acquisition-related charges |
|
|
3 |
|
|
- |
|
|
4 |
|
|
- |
|
|
3 |
|
|
- |
|
|
Adjustments for taxes(b) |
|
|
(146 |
) |
|
(0.07 |
) |
|
(155 |
) |
|
(0.08 |
) |
|
(465 |
) |
|
(0.24 |
) |
Non-GAAP net earnings |
|
$ |
1,959 |
|
$ |
1.01 |
|
$ |
1,676 |
|
$ |
0.86 |
|
$ |
2,281 |
|
$ |
1.16 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP earnings (loss) from operations |
|
$ |
1,923 |
|
|
|
|
$ |
1,855 |
|
|
|
|
$ |
(6,488 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of intangible assets |
|
|
317 |
|
|
|
|
|
356 |
|
|
|
|
|
372 |
|
|
|
|
|
Impairment of goodwill and intangible assets(a) |
|
|
- |
|
|
|
|
|
- |
|
|
|
|
|
8,847 |
|
|
|
|
|
Restructuring charges |
|
|
371 |
|
|
|
|
|
81 |
|
|
|
|
|
378 |
|
|
|
|
|
Acquisition-related charges |
|
|
3 |
|
|
|
|
|
4 |
|
|
|
|
|
3 |
|
|
|
|
Non-GAAP earnings from operations |
|
$ |
2,614 |
|
|
|
|
$ |
2,296 |
|
|
|
|
$ |
3,112 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating margin |
|
|
7 |
% |
|
|
|
|
7 |
% |
|
|
|
|
(22 |
%) |
|
|
|
Non-GAAP adjustments |
|
|
2 |
% |
|
|
|
|
1 |
% |
|
|
|
|
32 |
% |
|
|
|
Non-GAAP operating margin |
|
|
9 |
% |
|
|
|
|
8 |
% |
|
|
|
|
10 |
% |
|
|
|
|
|
(a) |
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. |
|
|
(b) |
For
the period ended October 31, 2012, adjustments for taxes is net of
a valuation allowance of $0.5 billion provided for certain deferred
tax assets. |
|
|
|
|
|
|
HEWLETT-PACKARD COMPANY AND SUBSIDIARIES |
|
ADJUSTMENTS TO GAAP NET EARNINGS, EARNINGS FROM
OPERATIONS, |
|
OPERATING MARGIN AND EARNINGS PER SHARE |
|
(Unaudited) |
|
(In millions except per share amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve months ended October 31, 2013 |
|
|
Diluted earnings per share |
|
|
Twelve months ended October 31, 2012 |
|
|
Diluted earnings per share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net earnings (loss) |
|
$ |
5,113 |
|
|
$ |
2.62 |
|
|
$ |
(12,650 |
) |
|
$ |
(6.41 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of intangible assets |
|
|
1,373 |
|
|
|
0.70 |
|
|
|
1,784 |
|
|
|
0.90 |
|
|
Impairment of goodwill and intangible assets(a) |
|
|
- |
|
|
|
- |
|
|
|
18,035 |
|
|
|
9.14 |
|
|
Restructuring charges |
|
|
990 |
|
|
|
0.51 |
|
|
|
2,266 |
|
|
|
1.15 |
|
|
Acquisition-related charges |
|
|
22 |
|
|
|
0.01 |
|
|
|
45 |
|
|
|
0.02 |
|
|
Wind
down of non-strategic businesses(b) |
|
|
- |
|
|
|
- |
|
|
|
72 |
|
|
|
0.03 |
|
|
Adjustments for taxes(c) |
|
|
(560 |
) |
|
|
(0.28 |
) |
|
|
(1,517 |
) |
|
|
(0.78 |
) |
Non-GAAP net earnings |
|
$ |
6,938 |
|
|
$ |
3.56 |
|
|
$ |
8,035 |
|
|
$ |
4.05 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP earnings (loss) from operations |
|
$ |
7,131 |
|
|
|
|
|
|
$ |
(11,057 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of intangible assets |
|
|
1,373 |
|
|
|
|
|
|
|
1,784 |
|
|
|
|
|
|
Impairment of goodwill and intangible assets(a) |
|
|
- |
|
|
|
|
|
|
|
18,035 |
|
|
|
|
|
|
Restructuring charges |
|
|
990 |
|
|
|
|
|
|
|
2,266 |
|
|
|
|
|
|
Acquisition-related charges |
|
|
22 |
|
|
|
|
|
|
|
45 |
|
|
|
|
|
|
Wind
down of non-strategic businesses(b) |
|
|
- |
|
|
|
|
|
|
|
72 |
|
|
|
|
|
Non-GAAP earnings from operations |
|
$ |
9,516 |
|
|
|
|
|
|
$ |
11,145 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating margin |
|
|
6 |
% |
|
|
|
|
|
|
(9 |
%) |
|
|
|
|
Non-GAAP adjustments |
|
|
2 |
% |
|
|
|
|
|
|
18 |
% |
|
|
|
|
Non-GAAP operating margin |
|
|
8 |
% |
|
|
|
|
|
|
9 |
% |
|
|
|
|
|
|
(a) |
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 Enterprise
Services segment and an intangible asset impairment charge of $1.2
billion associated with the "Compaq" trade name within the Personal
Systems segment. |
|
|
(b) |
For
the period ended October 31, 2012, represents primarily
contract-related charges, including inventory write-downs, related
to winding down certain retail publishing business activities
within the Printing segment, net of adjustments to expenses for
supplier-related obligations related to winding down the webOS
device business. |
|
|
(c) |
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, 2013 |
|
October 31, 2012 |
|
|
(Unaudited) |
|
|
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
12,163 |
|
$ |
11,301 |
|
Accounts receivable |
|
|
15,876 |
|
|
16,407 |
|
Financing receivables |
|
|
3,144 |
|
|
3,252 |
|
Inventory |
|
|
6,046 |
|
|
6,317 |
|
Other current assets |
|
|
13,135 |
|
|
13,360 |
|
|
|
|
|
|
|
|
|
Total
current assets |
|
|
50,364 |
|
|
50,637 |
|
|
|
|
|
|
|
Property, plant and equipment |
|
|
11,463 |
|
|
11,954 |
|
|
|
|
|
|
|
Long-term financing receivables and other assets |
|
|
9,556 |
|
|
10,593 |
|
|
|
|
|
|
|
Goodwill and intangible assets |
|
|
34,293 |
|
|
35,584 |
|
|
|
|
|
|
|
Total assets |
|
$ |
105,676 |
|
$ |
108,768 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
Notes payable and short-term borrowings |
|
$ |
5,979 |
|
$ |
6,647 |
|
Accounts payable |
|
|
14,019 |
|
|
13,350 |
|
Employee compensation and benefits |
|
|
4,436 |
|
|
4,058 |
|
Taxes on earnings |
|
|
1,203 |
|
|
846 |
|
Deferred revenue |
|
|
6,477 |
|
|
7,494 |
|
Other accrued liabilities |
|
|
13,407 |
|
|
14,271 |
|
|
|
|
|
|
|
|
|
Total
current liabilities |
|
|
45,521 |
|
|
46,666 |
|
|
|
|
|
|
|
Long-term debt |
|
|
16,608 |
|
|
21,789 |
|
|
|
|
|
|
|
Other liabilities |
|
|
15,891 |
|
|
17,480 |
|
|
|
|
|
|
|
Stockholders' equity: |
|
|
|
|
|
|
|
HP stockholders' equity |
|
|
27,269 |
|
|
22,436 |
|
Non-controlling interests |
|
|
387 |
|
|
397 |
|
|
|
|
|
|
|
|
|
Total
stockholders' equity |
|
|
27,656 |
|
|
22,833 |
|
|
|
|
|
|
|
Total liabilities and stockholders' equity |
|
$ |
105,676 |
|
$ |
108,768 |
|
|
|
|
|
|
HEWLETT-PACKARD COMPANY AND SUBSIDIARIES |
|
CONSOLIDATED STATEMENTS OF CASH FLOWS |
|
(Unaudited) |
|
(In millions) |
|
|
|
|
|
Three months ended October 31, 2013 |
|
|
Twelve months ended October 31, 2013 |
|
|
|
|
|
|
|
|
|
|
Cash flows from operating activities: |
|
|
|
|
|
|
|
|
|
Net earnings |
|
$ |
1,414 |
|
|
$ |
5,113 |
|
|
Adjustments to reconcile net earnings to net cash
provided by operating activities: |
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
1,120 |
|
|
|
4,611 |
|
|
|
Stock-based compensation expense |
|
|
102 |
|
|
|
500 |
|
|
|
Provision for doubtful accounts and inventory |
|
|
71 |
|
|
|
336 |
|
|
|
Restructuring charges |
|
|
371 |
|
|
|
990 |
|
|
|
Deferred taxes on earnings |
|
|
(952 |
) |
|
|
(410 |
) |
|
|
Excess tax benefit from stock-based compensation |
|
|
(1 |
) |
|
|
(2 |
) |
|
|
Other, net |
|
|
100 |
|
|
|
443 |
|
|
|
|
|
|
|
|
|
|
|
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
|
|
|
Accounts receivables |
|
|
(1,542 |
) |
|
|
530 |
|
|
|
|
Financing receivables |
|
|
(84 |
) |
|
|
484 |
|
|
|
|
Inventory |
|
|
441 |
|
|
|
(4 |
) |
|
|
|
Accounts payable |
|
|
611 |
|
|
|
541 |
|
|
|
|
Taxes on earnings |
|
|
937 |
|
|
|
417 |
|
|
|
|
Restructuring |
|
|
(260 |
) |
|
|
(904 |
) |
|
|
|
Other assets and liabilities |
|
|
488 |
|
|
|
(1,037 |
) |
|
|
|
|
Net
cash provided by operating activities |
|
|
2,816 |
|
|
|
11,608 |
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities: |
|
|
|
|
|
|
|
|
|
|
Investment in property, plant and equipment |
|
|
(919 |
) |
|
|
(3,199 |
) |
|
|
Proceeds from sale of property, plant and
equipment |
|
|
146 |
|
|
|
653 |
|
|
|
Purchases of available-for-sale securities and other
investments |
|
|
(450 |
) |
|
|
(1,243 |
) |
|
|
Maturities and sales of available-for-sale securities
and other investments |
|
|
279 |
|
|
|
1,153 |
|
|
|
Payments made in connection with business acquisitions,
net of cash acquired |
|
|
- |
|
|
|
(167 |
) |
|
|
|
|
Net
cash used in investing activities |
|
|
(944 |
) |
|
|
(2,803 |
) |
|
|
|
|
|
|
|
|
|
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
|
|
Issuance (repayment) of commercial paper and notes
payable, net |
|
|
16 |
|
|
|
(154 |
) |
|
|
Issuance of debt |
|
|
25 |
|
|
|
279 |
|
|
|
Payment of debt |
|
|
(2,248 |
) |
|
|
(5,721 |
) |
|
|
Issuance of common stock under employee stock
plans |
|
|
9 |
|
|
|
288 |
|
|
|
Repurchase of common stock |
|
|
(479 |
) |
|
|
(1,532 |
) |
|
|
Excess tax benefit from stock-based compensation |
|
|
1 |
|
|
|
2 |
|
|
|
Cash dividends paid |
|
|
(284 |
) |
|
|
(1,105 |
) |
|
|
|
|
Net
cash used in financing activities |
|
|
(2,960 |
) |
|
|
(7,943 |
) |
|
|
|
|
|
|
|
|
|
(Decrease) increase in cash and cash equivalents |
|
|
(1,088 |
) |
|
|
862 |
|
Cash and cash equivalents at beginning of period |
|
|
13,251 |
|
|
|
11,301 |
|
Cash and cash equivalents at end of period |
|
$ |
12,163 |
|
|
$ |
12,163 |
|
|
|
|
|
|
|
HEWLETT-PACKARD COMPANY AND SUBSIDIARIES |
|
SEGMENT INFORMATION |
|
(Unaudited) |
|
(In millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
|
|
October 31, 2013 |
|
|
July 31, 2013 |
|
|
October 31, 2012 |
|
Net revenue:(a) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Personal Systems |
|
$ |
8,579 |
|
|
$ |
7,704 |
|
|
$ |
8,727 |
|
|
Printing |
|
|
6,044 |
|
|
|
5,803 |
|
|
|
6,080 |
|
|
|
Total
Printing and Personal Systems Group(b) |
|
|
14,623 |
|
|
|
13,507 |
|
|
|
14,807 |
|
|
Enterprise Group |
|
|
7,594 |
|
|
|
6,786 |
|
|
|
7,459 |
|
|
Enterprise Services |
|
|
5,759 |
|
|
|
5,843 |
|
|
|
6,352 |
|
|
Software |
|
|
1,064 |
|
|
|
982 |
|
|
|
1,171 |
|
|
HP Financial Services |
|
|
912 |
|
|
|
879 |
|
|
|
966 |
|
|
Corporate Investments |
|
|
5 |
|
|
|
5 |
|
|
|
10 |
|
|
|
Total
segments |
|
|
29,957 |
|
|
|
28,002 |
|
|
|
30,765 |
|
|
Elimination of intersegment net revenue and other |
|
|
(826 |
) |
|
|
(776 |
) |
|
|
(806 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
HP consolidated net revenue |
|
$ |
29,131 |
|
|
$ |
27,226 |
|
|
$ |
29,959 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings before taxes:(a) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Personal Systems |
|
$ |
259 |
|
|
$ |
228 |
|
|
$ |
309 |
|
|
Printing |
|
|
1,071 |
|
|
|
908 |
|
|
|
1,067 |
|
|
|
Total
Printing and Personal Systems Group(b) |
|
|
1,330 |
|
|
|
1,136 |
|
|
|
1,376 |
|
|
Enterprise Group |
|
|
1,102 |
|
|
|
1,033 |
|
|
|
1,229 |
|
|
Enterprise Services |
|
|
255 |
|
|
|
192 |
|
|
|
423 |
|
|
Software |
|
|
328 |
|
|
|
201 |
|
|
|
318 |
|
|
HP Financial Services |
|
|
102 |
|
|
|
99 |
|
|
|
104 |
|
|
Corporate Investments |
|
|
(57 |
) |
|
|
(58 |
) |
|
|
(78 |
) |
|
|
Total
segment earnings from operations |
|
|
3,060 |
|
|
|
2,603 |
|
|
|
3,372 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate and unallocated costs and eliminations |
|
|
(344 |
) |
|
|
(200 |
) |
|
|
(119 |
) |
|
Unallocated costs related to stock-based compensation
expense |
|
|
(102 |
) |
|
|
(107 |
) |
|
|
(141 |
) |
|
Amortization of intangible assets |
|
|
(317 |
) |
|
|
(356 |
) |
|
|
(372 |
) |
|
Impairment of goodwill and intangible assets |
|
|
- |
|
|
|
- |
|
|
|
(8,847 |
) |
|
Restructuring charges |
|
|
(371 |
) |
|
|
(81 |
) |
|
|
(378 |
) |
|
Acquisition-related charges |
|
|
(3 |
) |
|
|
(4 |
) |
|
|
(3 |
) |
|
Interest and other, net |
|
|
(103 |
) |
|
|
(146 |
) |
|
|
(188 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
HP consolidated earnings (loss) before taxes |
|
$ |
1,820 |
|
|
$ |
1,709 |
|
|
$ |
(6,676 |
) |
|
|
(a) |
HP
has implemented certain organizational realignments in the first
quarter of fiscal 2013. As a result of these realignments, HP has
re-evaluated its segment financial reporting structure and,
effective in the first quarter of fiscal 2013, created two new
financial reporting segments, the Enterprise Group segment and the
Enterprise Services segment, and eliminated two other financial
reporting segments, the Enterprise Servers, Storage and Networking
("ESSN") segment and the Services segment. The Enterprise Group
segment consists of the business units within the former ESSN
segment and most of the services offerings of the Technology
Services ("TS") business unit, which was previously a part of the
former Services segment. The Enterprise Services segment consists
of the Applications and Business Services ("ABS") and
Infrastructure Technology Outsourcing ("ITO") business units from
the former Services segment, along with the end-user workplace
support services business that was previously a part of the TS
business unit. Taking into account these changes, HP has the
following seven financial reporting segments: Personal Systems,
Printing, the Enterprise Group, Enterprise Services, Software, HP
Financial Services and Corporate Investments. |
|
|
|
Also as a result of these realignments, the financial results
of the Personal Systems commercial products support business, which
were previously reported as part of the TS business unit, will now
be reported as part of the Other business unit within the Personal
Systems segment, and the financial results of the portion of the
business intelligence services business that had continued to be
reported as part of the Corporate Investments segment following the
implementation of prior realignment actions will now be reported as
part of the ABS business unit. In addition, the end-user workplace
support services business, which, as noted above, was previously a
part of the TS business unit and will now become a part of the
Enterprise Services segment, will be reported as part of the ITO
business unit within that segment. |
|
|
|
To provide improved visibility and comparability, HP has
reflected these changes to its reporting structure in prior
financial reporting periods on an as-if basis, which has resulted
in the transfer of revenue and operating profit among the Personal
Systems, the Enterprise Group, Enterprise Services and Corporate
Investments segments. These changes had no impact on the previously
reported financial results for the Printing, Software or HP
Financial Services segments. In addition, none of these changes
impacted HP's previously reported consolidated net revenue,
earnings from operations, net earnings or net earnings per
share. |
|
|
(b) |
The
Personal Systems segment and the Printing segment are structured
beneath a broader Printing and Personal Systems Group ("PPS").
While PPS 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. |
|
|
|
HEWLETT-PACKARD COMPANY AND SUBSIDIARIES |
SEGMENT
INFORMATION |
(In
millions) |
|
|
|
|
|
|
|
|
|
Twelve months ended |
|
|
|
October 31, |
|
|
|
2013 |
|
|
2012 |
|
|
|
(Unaudited) |
|
|
|
|
Net revenue:(a) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Personal Systems |
|
$ |
32,071 |
|
|
$ |
35,725 |
|
|
Printing |
|
|
23,854 |
|
|
|
24,487 |
|
|
|
Total
Printing and Personal Systems Group(b) |
|
|
55,925 |
|
|
|
60,212 |
|
|
Enterprise Group |
|
|
28,183 |
|
|
|
29,779 |
|
|
Enterprise Services |
|
|
23,520 |
|
|
|
25,609 |
|
|
Software |
|
|
3,913 |
|
|
|
4,060 |
|
|
HP Financial Services |
|
|
3,629 |
|
|
|
3,819 |
|
|
Corporate Investments |
|
|
24 |
|
|
|
58 |
|
|
|
Total
Segments |
|
|
115,194 |
|
|
|
123,537 |
|
|
Elimination of intersegment net revenue and other |
|
|
(2,896 |
) |
|
|
(3,180 |
) |
|
|
|
|
|
|
|
|
|
|
|
Total
HP consolidated net revenue |
|
$ |
112,298 |
|
|
$ |
120,357 |
|
|
|
|
|
|
|
|
|
|
Earnings before taxes:(a) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Personal Systems |
|
$ |
949 |
|
|
$ |
1,689 |
|
|
Printing |
|
|
3,890 |
|
|
|
3,585 |
|
|
|
Total
Printing and Personal Systems Group(b) |
|
|
4,839 |
|
|
|
5,274 |
|
|
Enterprise Group |
|
|
4,301 |
|
|
|
5,194 |
|
|
Enterprise Services |
|
|
679 |
|
|
|
1,045 |
|
|
Software |
|
|
866 |
|
|
|
827 |
|
|
HP Financial Services |
|
|
399 |
|
|
|
388 |
|
|
Corporate Investments |
|
|
(236 |
) |
|
|
(233 |
) |
|
|
Total
segment earnings from operations |
|
|
10,848 |
|
|
|
12,495 |
|
|
|
|
|
|
|
|
|
|
|
Corporate and unallocated costs and eliminations |
|
|
(832 |
) |
|
|
(787 |
) |
|
Unallocated costs related to stock-based compensation
expense |
|
|
(500 |
) |
|
|
(635 |
) |
|
Amortization of intangible assets |
|
|
(1,373 |
) |
|
|
(1,784 |
) |
|
Impairment of goodwill and intangible assets |
|
|
- |
|
|
|
(18,035 |
) |
|
Restructuring charges |
|
|
(990 |
) |
|
|
(2,266 |
) |
|
Acquisition-related charges |
|
|
(22 |
) |
|
|
(45 |
) |
|
Interest and other, net |
|
|
(621 |
) |
|
|
(876 |
) |
|
|
|
|
|
|
|
|
|
|
|
Total
HP consolidated earnings (loss) before taxes |
|
$ |
6,510 |
|
|
$ |
(11,933 |
) |
|
|
(a) |
HP
has implemented certain organizational realignments in the first
quarter of fiscal 2013. As a result of these realignments, HP has
re-evaluated its segment financial reporting structure and,
effective in the first quarter of fiscal 2013, created two new
financial reporting segments, the Enterprise Group segment and the
Enterprise Services segment, and eliminated two other financial
reporting segments, the Enterprise Servers, Storage and Networking
("ESSN") segment and the Services segment. The Enterprise Group
segment consists of the business units within the former ESSN
segment and most of the services offerings of the Technology
Services ("TS") business unit, which was previously a part of the
former Services segment. The Enterprise Services segment consists
of the Applications and Business Services ("ABS") and
Infrastructure Technology Outsourcing ("ITO") business units from
the former Services segment, along with the end-user workplace
support services business that was previously a part of the TS
business unit. Taking into account these changes, HP has the
following seven financial reporting segments: Personal Systems,
Printing, the Enterprise Group, Enterprise Services, Software, HP
Financial Services and Corporate Investments. |
|
|
|
Also as a result of these realignments, the financial results
of the Personal Systems commercial products support business, which
were previously reported as part of the TS business unit, will now
be reported as part of the Other business unit within the Personal
Systems segment, and the financial results of the portion of the
business intelligence services business that had continued to be
reported as part of the Corporate Investments segment following the
implementation of prior realignment actions will now be reported as
part of the ABS business unit. In addition, the end-user workplace
support services business, which, as noted above, was previously a
part of the TS business unit and will now become a part of the
Enterprise Services segment, will be reported as part of the ITO
business unit within that segment. |
|
|
|
To provide improved visibility and comparability, HP has
reflected these changes to its reporting structure in prior
financial reporting periods on an as-if basis, which has resulted
in the transfer of revenue and operating profit among the Personal
Systems, the Enterprise Group, Enterprise Services and Corporate
Investments segments. These changes had no impact on the previously
reported financial results for the Printing, Software or HP
Financial Services segments. In addition, none of these changes
impacted HP's previously reported consolidated net revenue,
earnings from operations, net earnings or net earnings per
share. |
|
|
(b) |
The
Personal Systems segment and the Printing segment are structured
beneath a broader Printing and Personal Systems Group ("PPS").
While PPS 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. |
|
|
|
|
|
HEWLETT-PACKARD COMPANY AND SUBSIDIARIES |
|
SEGMENT / BUSINESS UNIT INFORMATION |
|
(Unaudited) |
|
(In millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
|
Growth rate (%) |
|
|
|
October 31, 2013 |
|
|
July 31, 2013 |
|
|
October 31, 2012 |
|
|
Q/Q |
|
|
Y/Y |
|
Net revenue:(a) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Printing and Personal Systems Group(b) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Personal Systems |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notebooks |
|
$ |
4,461 |
|
|
$ |
3,722 |
|
|
$ |
4,572 |
|
|
20 |
% |
|
(2 |
%) |
|
|
|
Desktops |
|
|
3,273 |
|
|
|
3,147 |
|
|
|
3,369 |
|
|
4 |
% |
|
(3 |
%) |
|
|
|
Workstations |
|
|
554 |
|
|
|
537 |
|
|
|
550 |
|
|
3 |
% |
|
1 |
% |
|
|
|
Other |
|
|
291 |
|
|
|
298 |
|
|
|
236 |
|
|
(2 |
%) |
|
23 |
% |
|
|
|
|
Total Personal Systems |
|
|
8,579 |
|
|
|
7,704 |
|
|
|
8,727 |
|
|
11 |
% |
|
(2 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Printing |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplies |
|
|
3,862 |
|
|
|
3,839 |
|
|
|
4,007 |
|
|
1 |
% |
|
(4 |
%) |
|
|
|
Commercial Hardware |
|
|
1,551 |
|
|
|
1,399 |
|
|
|
1,482 |
|
|
11 |
% |
|
5 |
% |
|
|
|
Consumer Hardware |
|
|
631 |
|
|
|
565 |
|
|
|
591 |
|
|
12 |
% |
|
7 |
% |
|
|
|
|
Total Printing |
|
|
6,044 |
|
|
|
5,803 |
|
|
|
6,080 |
|
|
4 |
% |
|
(1 |
%) |
|
|
|
|
|
Total
Printing and Personal Systems Group |
|
|
14,623 |
|
|
|
13,507 |
|
|
|
14,807 |
|
|
8 |
% |
|
(1 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Enterprise Group |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Industry Standard Servers |
|
|
3,451 |
|
|
|
2,851 |
|
|
|
3,137 |
|
|
21 |
% |
|
10 |
% |
|
|
|
Technology Services |
|
|
2,201 |
|
|
|
2,174 |
|
|
|
2,340 |
|
|
1 |
% |
|
(6 |
%) |
|
|
|
Storage |
|
|
952 |
|
|
|
833 |
|
|
|
946 |
|
|
14 |
% |
|
1 |
% |
|
|
|
Networking |
|
|
656 |
|
|
|
644 |
|
|
|
635 |
|
|
2 |
% |
|
3 |
% |
|
|
|
Business Critical Systems |
|
|
334 |
|
|
|
284 |
|
|
|
401 |
|
|
18 |
% |
|
(17 |
%) |
|
|
|
|
Total Enterprise Group |
|
|
7,594 |
|
|
|
6,786 |
|
|
|
7,459 |
|
|
12 |
% |
|
2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Enterprise Services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Infrastructure Technology Outsourcing |
|
|
3,563 |
|
|
|
3,662 |
|
|
|
3,924 |
|
|
(3 |
%) |
|
(9 |
%) |
|
|
|
Application and Business Services |
|
|
2,196 |
|
|
|
2,181 |
|
|
|
2,428 |
|
|
1 |
% |
|
(10 |
%) |
|
|
|
|
Total Enterprise Services |
|
|
5,759 |
|
|
|
5,843 |
|
|
|
6,352 |
|
|
(1 |
%) |
|
(9 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Software |
|
|
1,064 |
|
|
|
982 |
|
|
|
1,171 |
|
|
8 |
% |
|
(9 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
HP Financial Services |
|
|
912 |
|
|
|
879 |
|
|
|
966 |
|
|
4 |
% |
|
(6 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate Investments |
|
|
5 |
|
|
|
5 |
|
|
|
10 |
|
|
0 |
% |
|
(50 |
%) |
|
|
|
Total segments |
|
|
29,957 |
|
|
|
28,002 |
|
|
|
30,765 |
|
|
7 |
% |
|
(3 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Elimination of intersegment net revenue and other |
|
|
(826 |
) |
|
|
(776 |
) |
|
|
(806 |
) |
|
6 |
% |
|
2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total HP consolidated net revenue |
|
$ |
29,131 |
|
|
$ |
27,226 |
|
|
$ |
29,959 |
|
|
7 |
% |
|
(3 |
%) |
|
|
(a) |
HP
has implemented certain organizational realignments in the first
quarter of fiscal 2013. As a result of these realignments, HP has
re-evaluated its segment financial reporting structure and,
effective in the first quarter of fiscal 2013, created two new
financial reporting segments, the Enterprise Group segment and the
Enterprise Services segment, and eliminated two other financial
reporting segments, the Enterprise Servers, Storage and Networking
("ESSN") segment and the Services segment. The Enterprise Group
segment consists of the business units within the former ESSN
segment and most of the services offerings of the Technology
Services ("TS") business unit, which was previously a part of the
former Services segment. The Enterprise Services segment consists
of the Applications and Business Services ("ABS") and
Infrastructure Technology Outsourcing ("ITO") business units from
the former Services segment, along with the end-user workplace
support services business that was previously a part of the TS
business unit. Taking into account these changes, HP has the
following seven financial reporting segments: Personal Systems,
Printing, the Enterprise Group, Enterprise Services, Software, HP
Financial Services and Corporate Investments. |
|
|
|
Also as a result of these realignments, the financial results
of the Personal Systems commercial products support business, which
were previously reported as part of the TS business unit, will now
be reported as part of the Other business unit within the Personal
Systems segment, and the financial results of the portion of the
business intelligence services business that had continued to be
reported as part of the Corporate Investments segment following the
implementation of prior realignment actions will now be reported as
part of the ABS business unit. In addition, the end-user workplace
support services business, which, as noted above, was previously a
part of the TS business unit and will now become a part of the
Enterprise Services segment, will be reported as part of the ITO
business unit within that segment. |
|
|
|
To provide improved visibility and comparability, HP has
reflected these changes to its reporting structure in prior
financial reporting periods on an as-if basis, which has resulted
in the transfer of revenue and operating profit among the Personal
Systems, the Enterprise Group, Enterprise Services and Corporate
Investments segments. These changes had no impact on the previously
reported financial results for the Printing, Software or HP
Financial Services segments. In addition, none of these changes
impacted HP's previously reported consolidated net revenue,
earnings from operations, net earnings or net earnings per
share. |
|
|
(b) |
The
Personal Systems segment and the Printing segment are structured
beneath a broader Printing and Personal Systems Group ("PPS").
While PPS 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. |
|
|
|
|
|
|
HEWLETT-PACKARD COMPANY AND SUBSIDIARIES |
|
SEGMENT / BUSINESS UNIT INFORMATION |
|
(In millions) |
|
|
|
|
|
|
|
Twelve months ended |
|
|
|
October 31, |
|
|
|
2013 |
|
|
2012 |
|
|
|
(Unaudited) |
|
|
|
|
Net revenue:(a) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Printing and Personal Systems Group(b) |
|
|
|
|
|
|
|
|
|
|
Personal Systems |
|
|
|
|
|
|
|
|
|
|
|
Notebooks |
|
$ |
16,029 |
|
|
$ |
18,830 |
|
|
|
|
Desktops |
|
|
12,844 |
|
|
|
13,888 |
|
|
|
|
Workstations |
|
|
2,147 |
|
|
|
2,148 |
|
|
|
|
Other |
|
|
1,051 |
|
|
|
859 |
|
|
|
|
|
Total Personal Systems |
|
|
32,071 |
|
|
|
35,725 |
|
|
|
|
|
|
|
|
|
|
|
|
Printing |
|
|
|
|
|
|
|
|
|
|
|
Supplies |
|
|
15,716 |
|
|
|
16,151 |
|
|
|
|
Commercial Hardware |
|
|
5,702 |
|
|
|
5,895 |
|
|
|
|
Consumer Hardware |
|
|
2,436 |
|
|
|
2,441 |
|
|
|
|
|
Total Printing |
|
|
23,854 |
|
|
|
24,487 |
|
|
|
|
|
|
Total
Printing and Personal Systems Group |
|
|
55,925 |
|
|
|
60,212 |
|
|
|
|
|
|
|
|
|
|
|
|
Enterprise Group |
|
|
|
|
|
|
|
|
|
|
|
Industry Standard Servers |
|
|
12,102 |
|
|
|
12,582 |
|
|
|
|
Technology Services |
|
|
8,890 |
|
|
|
9,288 |
|
|
|
|
Storage |
|
|
3,475 |
|
|
|
3,815 |
|
|
|
|
Networking |
|
|
2,526 |
|
|
|
2,482 |
|
|
|
|
Business Critical Systems |
|
|
1,190 |
|
|
|
1,612 |
|
|
|
|
|
Total Enterprise Group |
|
|
28,183 |
|
|
|
29,779 |
|
|
|
|
|
|
|
|
|
|
|
|
Enterprise Services |
|
|
|
|
|
|
|
|
|
|
|
Infrastructure Technology Outsourcing |
|
|
14,682 |
|
|
|
15,792 |
|
|
|
|
Application and Business Services |
|
|
8,838 |
|
|
|
9,817 |
|
|
|
|
|
Total Enterprise Services |
|
|
23,520 |
|
|
|
25,609 |
|
|
|
|
|
|
|
|
|
|
|
|
Software |
|
|
3,913 |
|
|
|
4,060 |
|
|
|
|
|
|
|
|
|
|
|
|
HP Financial Services |
|
|
3,629 |
|
|
|
3,819 |
|
|
|
|
|
|
|
|
|
|
|
|
Corporate Investments |
|
|
24 |
|
|
|
58 |
|
|
|
|
|
Total segments |
|
|
115,194 |
|
|
|
123,537 |
|
|
|
|
|
|
|
|
|
|
|
Elimination of intersegment net revenue and other |
|
|
(2,896 |
) |
|
|
(3,180 |
) |
|
|
|
|
|
|
|
|
|
|
|
Total HP consolidated net revenue |
|
$ |
112,298 |
|
|
$ |
120,357 |
|
|
|
(a) |
HP
has implemented certain organizational realignments in the first
quarter of fiscal 2013. As a result of these realignments, HP has
re-evaluated its segment financial reporting structure and,
effective in the first quarter of fiscal 2013, created two new
financial reporting segments, the Enterprise Group segment and the
Enterprise Services segment, and eliminated two other financial
reporting segments, the Enterprise Servers, Storage and Networking
("ESSN") segment and the Services segment. The Enterprise Group
segment consists of the business units within the former ESSN
segment and most of the services offerings of the Technology
Services ("TS") business unit, which was previously a part of the
former Services segment. The Enterprise Services segment consists
of the Applications and Business Services ("ABS") and
Infrastructure Technology Outsourcing ("ITO") business units from
the former Services segment, along with the end-user workplace
support services business that was previously a part of the TS
business unit. Taking into account these changes, HP has the
following seven financial reporting segments: Personal Systems,
Printing, the Enterprise Group, Enterprise Services, Software, HP
Financial Services and Corporate Investments. |
|
|
|
Also as a result of these realignments, the financial results
of the Personal Systems commercial products support business, which
were previously reported as part of the TS business unit, will now
be reported as part of the Other business unit within the Personal
Systems segment, and the financial results of the portion of the
business intelligence services business that had continued to be
reported as part of the Corporate Investments segment following the
implementation of prior realignment actions will now be reported as
part of the ABS business unit. In addition, the end-user workplace
support services business, which, as noted above, was previously a
part of the TS business unit and will now become a part of the
Enterprise Services segment, will be reported as part of the ITO
business unit within that segment. |
|
|
|
To provide improved visibility and comparability, HP has
reflected these changes to its reporting structure in prior
financial reporting periods on an as-if basis, which has resulted
in the transfer of revenue and operating profit among the Personal
Systems, the Enterprise Group, Enterprise Services and Corporate
Investments segments. These changes had no impact on the previously
reported financial results for the Printing, Software or HP
Financial Services segments. In addition, none of these changes
impacted HP's previously reported consolidated net revenue,
earnings from operations, net earnings or net earnings per
share. |
|
|
(b) |
The
Personal Systems segment and the Printing segment are structured
beneath a broader Printing and Personal Systems Group ("PPS").
While PPS 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. |
|
|
|
|
|
|
HEWLETT-PACKARD COMPANY AND SUBSIDIARIES |
|
SEGMENT NON-GAAP OPERATING MARGIN SUMMARY DATA |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
|
Change in Operating Margin (pts) |
|
|
|
October 31, 2013 |
|
|
Q/Q |
|
|
Y/Y |
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP operating margin:(a) |
|
|
|
|
|
|
|
|
|
|
Personal Systems |
|
3.0 |
% |
|
- |
|
|
(0.5 pts |
) |
|
Printing |
|
17.7 |
% |
|
2.1 pts |
|
|
0.2 pts |
|
|
|
Printing and Personal Systems Group(b) |
|
9.1 |
% |
|
0.7 pts |
|
|
(0.2 pts |
) |
|
|
|
|
|
|
|
|
|
|
|
Enterprise Group |
|
14.5 |
% |
|
(0.7 pts |
) |
|
(2.0 pts |
) |
|
Enterprise Services |
|
4.4 |
% |
|
1.1 pts |
|
|
(2.3 pts |
) |
|
Software |
|
30.8 |
% |
|
10.3 pts |
|
|
3.6 pts |
|
|
HP Financial Services |
|
11.2 |
% |
|
(0.1 pts |
) |
|
0.4 pts |
|
|
Corporate Investments |
|
NM |
|
|
NM |
|
|
NM |
|
|
|
|
Total segments |
|
10.2 |
% |
|
0.9 pts |
|
|
(0.8 pts |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
HP consolidated non-GAAP operating margin |
|
9.0 |
% |
|
0.6 pts |
|
|
(1.4 pts |
) |
|
|
(a) |
HP
has implemented certain organizational realignments in the first
quarter of fiscal 2013. As a result of these realignments, HP has
re-evaluated its segment financial reporting structure and,
effective in the first quarter of fiscal 2013, created two new
financial reporting segments, the Enterprise Group segment and the
Enterprise Services segment, and eliminated two other financial
reporting segments, the Enterprise Servers, Storage and Networking
("ESSN") segment and the Services segment. The Enterprise Group
segment consists of the business units within the former ESSN
segment and most of the services offerings of the Technology
Services ("TS") business unit, which was previously a part of the
former Services segment. The Enterprise Services segment consists
of the Applications and Business Services ("ABS") and
Infrastructure Technology Outsourcing ("ITO") business units from
the former Services segment, along with the end-user workplace
support services business that was previously a part of the TS
business unit. Taking into account these changes, HP has the
following seven financial reporting segments: Personal Systems,
Printing, the Enterprise Group, Enterprise Services, Software, HP
Financial Services and Corporate Investments. |
|
|
|
Also as a result of these realignments, the financial results
of the Personal Systems commercial products support business, which
were previously reported as part of the TS business unit, will now
be reported as part of the Other business unit within the Personal
Systems segment, and the financial results of the portion of the
business intelligence services business that had continued to be
reported as part of the Corporate Investments segment following the
implementation of prior realignment actions will now be reported as
part of the ABS business unit. In addition, the end-user workplace
support services business, which, as noted above, was previously a
part of the TS business unit and will now become a part of the
Enterprise Services segment, will be reported as part of the ITO
business unit within that segment. |
|
|
|
To provide improved visibility and comparability, HP has
reflected these changes to its reporting structure in prior
financial reporting periods on an as-if basis, which has resulted
in the transfer of revenue and operating profit among the Personal
Systems, the Enterprise Group, Enterprise Services and Corporate
Investments segments. These changes had no impact on the previously
reported financial results for the Printing, Software or HP
Financial Services segments. In addition, none of these changes
impacted HP's previously reported consolidated net revenue,
earnings from operations, net earnings or net earnings per
share. |
|
|
(b) |
The
Personal Systems segment and the Printing segment are structured
beneath a broader Printing and Personal Systems Group ("PPS").
While PPS 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. |
|
|
|
|
|
|
HEWLETT-PACKARD COMPANY AND SUBSIDIARIES |
|
CALCULATION OF NET EARNINGS PER SHARE |
|
(Unaudited) |
|
(In millions except per share amounts) |
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
|
|
October 31, 2013 |
|
July 31, 2013 |
|
October 31, 2012 |
|
|
|
|
|
|
|
|
|
|
|
|
Numerator: |
|
|
|
|
|
|
|
|
|
|
|
GAAP net earnings (loss) |
|
$ |
1,414 |
|
$ |
1,390 |
|
$ |
(6,854 |
) |
|
Non-GAAP net earnings |
|
$ |
1,959 |
|
$ |
1,676 |
|
$ |
2,281 |
|
|
|
|
|
|
|
|
|
|
|
|
Denominator: |
|
|
|
|
|
|
|
|
|
|
|
Weighted-average shares used to compute basic net
earnings (loss) per share and diluted net (loss) per share |
|
|
1,918 |
|
|
1,929 |
|
|
1,964 |
|
|
Dilutive effect of employee stock plans |
|
|
22 |
|
|
19 |
|
|
3 |
|
|
|
Weighted-average shares used to compute diluted net earnings per
share |
|
|
1,940 |
|
|
1,948 |
|
|
1,967 |
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net earnings (loss) per share: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.74 |
|
$ |
0.72 |
|
$ |
(3.49 |
) |
|
Diluted(a) |
|
$ |
0.73 |
|
$ |
0.71 |
|
$ |
(3.49 |
) |
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net earnings per share: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
1.02 |
|
$ |
0.87 |
|
$ |
1.16 |
|
|
Diluted(b) |
|
$ |
1.01 |
|
$ |
0.86 |
|
$ |
1.16 |
|
|
|
(a) |
GAAP
diluted net earnings per share reflects any dilutive effect of
outstanding stock options, performance-based restricted units,
restricted stock units and restricted stock, but that effect is
excluded when calculating GAAP diluted net (loss) per share because
it would be anti-dilutive. |
|
|
(b) |
Non-GAAP diluted net earnings per share reflects any dilutive
effect of outstanding stock options, performance-based restricted
units, restricted stock units and restricted stock. |
|
|
|
|
|
|
|
|
|
|
HEWLETT-PACKARD COMPANY AND SUBSIDIARIES |
|
|
CALCULATION OF NET EARNINGS PER SHARE |
|
|
(Unaudited) |
|
|
(In millions except per share amounts) |
|
|
|
|
|
|
|
|
|
|
|
Twelve months ended |
|
|
|
|
October 31, |
|
|
|
|
2013 |
|
2012 |
|
|
|
|
|
|
|
|
|
|
Numerator: |
|
|
|
|
|
|
|
|
GAAP net earnings (loss) |
|
$ |
5,113 |
|
$ |
(12,650 |
) |
|
Non-GAAP net earnings |
|
$ |
6,938 |
|
$ |
8,035 |
|
|
|
|
|
|
|
|
|
|
Denominator: |
|
|
|
|
|
|
|
|
Weighted-average shares used to compute
basic net earnings (loss) per share and diluted net (loss) per
share |
|
|
1,934 |
|
|
1,974 |
|
|
|
Dilutive effect of employee stock plans |
|
|
16 |
|
|
10 |
|
|
|
Weighted-average shares used to compute diluted net earnings per
share |
|
|
1,950 |
|
|
1,984 |
|
|
|
|
|
|
|
|
|
|
GAAP net earnings (loss) per share: |
|
|
|
|
|
|
|
|
Basic |
|
$ |
2.64 |
|
$ |
(6.41 |
) |
|
Diluted(a) |
|
$ |
2.62 |
|
$ |
(6.41 |
) |
|
|
|
|
|
|
|
|
|
Non-GAAP net earnings per share: |
|
|
|
|
|
|
|
|
Basic |
|
$ |
3.59 |
|
$ |
4.07 |
|
|
Diluted(b) |
|
$ |
3.56 |
|
$ |
4.05 |
|
|
|
|
|
(a) |
GAAP
diluted net earnings per share reflects any dilutive effect of
outstanding stock options, performance-based restricted units,
restricted stock units and restricted stock, but that effect is
excluded when calculating GAAP diluted net (loss) per share because
it would be anti-dilutive. |
|
|
(b) |
Non-GAAP diluted net earnings per share reflects any dilutive
effect of outstanding stock options, performance-based restricted
units, restricted stock units and restricted stock. |
Use of non-GAAP financial measures To supplement HP's
consolidated condensed financial statements presented on a GAAP
basis, HP provides non-GAAP operating profit, non-GAAP operating
margin, non-GAAP net earnings, non-GAAP diluted net earnings per
share, gross cash, free cash flow, net debt, net cash, operating
company net debt and operating company net cash. HP also provides
forecasts of non-GAAP diluted net earnings per share. These
non-GAAP financial measures are not in accordance with, or an
alternative for, generally accepted accounting principles in the
United States. The GAAP measure most directly comparable to
non-GAAP operating profit is earnings from operations. The GAAP
measure most directly comparable to non-GAAP operating margin is
operating margin. The GAAP measure most directly comparable to
non-GAAP net earnings is net earnings. The GAAP measure most
directly comparable to non-GAAP diluted net earnings per share is
diluted net earnings per share. The GAAP measure most directly
comparable to gross cash is cash and cash equivalents. The GAAP
measure most directly comparable to free cash flow is cash flow
from operations. The GAAP measure most directly comparable to net
debt and operating company net debt is total company debt. The GAAP
measure most directly comparable to net cash and operating company
net cash is cash and cash equivalents. Reconciliations of each of
these non-GAAP financial measures to GAAP information are included
in the tables above or elsewhere in the materials accompanying this
news release.
Use and economic substance of non-GAAP financial measures used
by HP Non-GAAP operating profit and non-GAAP operating margin are
defined to exclude the effects of any restructuring charges,
charges relating to the impairment of goodwill and intangible
assets, charges relating to the amortization of intangible assets,
acquisition-related charges and charges related to the wind-down of
HP businesses recorded during the relevant period. Non-GAAP net
earnings and non-GAAP diluted net earnings per share consist of net
earnings or diluted net earnings per share excluding those same
charges. In addition, non-GAAP net earnings and non-GAAP diluted
net earnings per share are adjusted by the amount of additional
taxes or tax benefit associated with each non-GAAP item. HP's
management uses these non-GAAP financial measures for purposes of
evaluating HP's historical and prospective financial performance,
as well as HP's performance relative to its competitors. HP's
management also uses these non-GAAP measures to further its own
understanding of HP's segment operating performance. HP believes
that excluding those items mentioned above from these non-GAAP
financial measures allows HP's management to better understand HP's
consolidated financial performance in relation to the operating
results of HP's segments, as HP's management does not believe that
the excluded items are reflective of ongoing operating results.
More specifically, HP's management excludes each of those items
mentioned above for the following reasons:
- In the third quarter of fiscal 2012, HP decided to wind-down
certain retail publishing business activities. Non-GAAP operating
profit reported in the third quarter of fiscal 2012 reflects the
elimination of certain contract-related charges, including
inventory write-downs, in connection with the wind-down of that
business. Because the winding down of HP businesses is inconsistent
in amount and frequency, HP believes that eliminating these amounts
for purposes of calculating non-GAAP operating profit facilitates a
more meaningful evaluation of HP's current operating performance
and comparisons to HP's operating performance in other
periods.
- Goodwill is the excess of the consideration paid for acquired
companies over the estimated fair value of the tangible and
intangible assets acquired, liabilities assumed and any
noncontrolling interests in the acquiree. Intangible assets consist
primarily of customer contracts, customer lists, distribution
agreements, technology patents, and products, trademarks and trade
names purchased in connection with acquisitions. In the fourth
quarter of fiscal 2012, HP recorded a non-cash charge for the
impairment of goodwill and intangible assets associated with the
acquisition of Autonomy Corporation plc. In the third quarter of
fiscal 2012, HP recorded an impairment charge for the goodwill
associated with its Services segment following an impairment
review. In addition, in that same quarter, HP recorded an
impairment charge related to the intangible asset associated with
the "Compaq" trade name acquired in 2002 in conjunction with a
change in branding strategy. HP excludes these charges for purposes
of calculating these non-GAAP measures to facilitate a more
meaningful evaluation of HP's current operating performance and
comparisons to HP's operating performance in other periods.
- HP incurs charges relating to the amortization of intangible
assets, including acquired research and development projects. Those
charges are included in HP's GAAP presentation of earnings from
operations, operating margin, net earnings and diluted net earnings
per share. Such charges are significantly impacted by the timing
and magnitude of HP's acquisitions and any related impairment
charges. Consequently, HP excludes these charges for purposes of
calculating these non-GAAP measures to facilitate a more meaningful
evaluation of HP's current operating performance and comparisons to
HP's operating performance in other periods.
- Restructuring charges are costs associated with a formal
restructuring plan and are primarily related to (i) employee
termination costs and benefits and (ii) costs to vacate duplicative
facilities. HP excludes these restructuring costs (and any
reversals of charges recorded in prior periods) for purposes of
calculating these non-GAAP measures because it believes that these
historical costs do not reflect expected future operating expenses
and do not contribute to a meaningful evaluation of HP's current
operating performance or comparisons to HP's operating performance
in other periods.
- HP incurs costs related to its acquisitions. As
acquisition-related expenses are inconsistent in amount and
frequency and are significantly impacted by the timing and nature
of HP's acquisitions, HP believes that eliminating these expenses
for purposes of calculating these non-GAAP measures facilitates a
more meaningful evaluation of HP's current operating performance
and comparisons to HP's operating performance in other
periods.
Gross cash is a non-GAAP measure that is defined as cash and
cash equivalents plus short-term investments and certain long-term
investments that may be liquidated within 90 days pursuant to the
terms of existing put options or similar rights. Free cash flow is
defined as cash flow from operations less net capital expenditures.
HP's management uses gross cash and free cash flow for the purpose
of determining the amount of cash available for investment in HP's
businesses, funding acquisitions, repurchasing stock and other
purposes. HP's management also uses gross cash and free cash flow
to evaluate HP's historical and prospective liquidity. Because
gross cash includes liquid assets that are not included in GAAP
cash and cash equivalents, HP believes that gross cash provides a
more accurate and complete assessment of HP's liquidity. Because
free cash flow includes the effect of capital expenditures that are
not reflected in GAAP cash flow from operations, HP believes that
free cash flow provides a more accurate and complete assessment of
HP's liquidity and capital resources.
Operating company net debt is a non-GAAP measure that is defined
as total company net debt less HP Financial Services (HPFS) net
debt. Operating company net cash is a non-GAAP measure that is
defined as total company net cash less HPFS cash less HPFS debt.
Total company net debt consists of total debt (including the
effects of hedging) less gross cash, which includes cash and cash
equivalents, short-term investments, and certain liquid long-term
investments. Total company net cash consists of gross cash less
total debt. HPFS net debt consists of HPFS debt, which includes
primarily intercompany equity that is treated as debt for segment
reporting purposes, intercompany debt and borrowing and funding
related activity associated with HPFS and its subsidiaries, less
HPFS cash. Total company net debt and total company net cash
provide useful information to HP's management about the state of
HP's consolidated balance sheet. Operating company net debt and
operating company net cash provide additional useful information to
HP's management about the state of HP's consolidated condensed
balance sheet by providing more transparency into the financial
components of the operating company separate from HP's financing
business, which has different capital structure requirements and
requires much greater leverage to run effectively.
Material limitations associated with use of non-GAAP financial
measures These non-GAAP financial measures have limitations as
analytical tools, and these measures should not be considered in
isolation or as a substitute for analysis of HP's results as
reported under GAAP. Some of the limitations in relying on these
non-GAAP financial measures are:
- Items such as amortization of intangible assets, though not
directly affecting HP's cash position, represent the loss in value
of intangible assets over time. The expense associated with this
loss in value is not included in non-GAAP operating profit,
non-GAAP operating margin, non-GAAP net earnings or non-GAAP
diluted net earnings per share, and therefore does not reflect the
full economic effect of the loss in value of those intangible
assets.
- Items such as restructuring charges that are excluded from
non-GAAP operating profit, non-GAAP operating margin, non-GAAP net
earnings and non-GAAP diluted net earnings per share can have a
material impact on cash flows and earnings per share.
- HP may not be able to liquidate immediately the long-term
investments included in gross cash, which may limit the usefulness
of gross cash as a liquidity measure.
- Other companies may calculate non-GAAP operating profit,
non-GAAP operating margin, non-GAAP net earnings, non-GAAP diluted
net earnings per share, gross cash, free cash flow, net debt, net
cash, operating company net debt and operating company net cash
differently than HP does, limiting the usefulness of those measures
for comparative purposes.
Compensation for limitations associated with use of non-GAAP
financial measures HP compensates for the limitations on its use of
non-GAAP financial measures by relying primarily on its GAAP
results and using non-GAAP financial measures only supplementally.
HP also provides robust and detailed reconciliations of each
non-GAAP financial measure to its most directly comparable GAAP
measure within this press release and in other written materials
that include these non-GAAP financial measures, and HP encourages
investors to review carefully those reconciliations.
Usefulness of non-GAAP financial measures to investors HP
believes that providing non-GAAP operating profit, non-GAAP
operating margin, non-GAAP net earnings, non-GAAP diluted net
earnings per share, gross cash, free cash flow, net debt, net cash,
operating company net debt and operating company net cash to
investors in addition to the related GAAP measures provides
investors with greater transparency to the information used by HP's
management in its financial and operational decision-making and
allows investors to see HP's results "through the eyes" of
management. HP further believes that providing this information
better enables HP's investors to understand HP's operating
performance and to evaluate the efficacy of the methodology and
information used by HP's management to evaluate and measure such
performance. Disclosure of these non-GAAP financial measures also
facilitates comparisons of HP's operating performance with the
performance of other companies in HP's industry that supplement
their GAAP results with non-GAAP financial measures that are
calculated in a similar manner.
© 2013 Hewlett-Packard Development Company, L.P. The information
contained herein is subject to change without notice. HP shall not
be liable for technical or editorial errors or omissions contained
herein.
HP (NYSE:HPQ)
Historical Stock Chart
Von Jun 2024 bis Jul 2024
HP (NYSE:HPQ)
Historical Stock Chart
Von Jul 2023 bis Jul 2024