HP Reports Fiscal 2014 Second Quarter Results
PALO ALTO, CA--(Marketwired - May 22, 2014) - HP (NYSE:
HPQ)
- Second quarter non-GAAP diluted net earnings per share of
$0.88, up 1% from the prior-year period, versus the previously
provided outlook of $0.85 to $0.89 per share
- Second quarter GAAP diluted net earnings per share of $0.66, up
20% from the prior-year period, versus the previously provided
outlook of $0.62 to $0.66 per share
- Second quarter net revenue of $27.3 billion, down 1% from the
prior-year period and flat on a constant currency basis
- Second quarter cash flow from operations of $3.0 billion
- Returned $1.1 billion to shareholders in the form of dividends
and share repurchases in the second quarter
- Improved operating company net cash by $1.0 billion, the ninth
consecutive quarterly improvement of approximately $1 billion or
more
HP fiscal 2014 second quarter financial performance
|
|
|
|
|
|
|
|
|
|
|
|
Q2 FY14 |
|
|
Q2 FY13 |
|
|
Y/Y |
|
GAAP
net revenue ($B) |
|
$ |
27.3 |
|
|
$ |
27.6 |
|
|
(1 |
%) |
GAAP
operating margin |
|
|
6.7 |
% |
|
|
5.8 |
% |
|
0.9 pts. |
|
GAAP
net earnings ($B) |
|
$ |
1.3 |
|
|
$ |
1.1 |
|
|
18 |
% |
GAAP
diluted net earnings per share |
|
$ |
0.66 |
|
|
$ |
0.55 |
|
|
20 |
% |
Non-GAAP operating margin |
|
|
8.6 |
% |
|
|
8.6 |
% |
|
0.0 pts. |
|
Non-GAAP net earnings ($B) |
|
$ |
1.7 |
|
|
$ |
1.7 |
|
|
0 |
% |
Non-GAAP diluted net earnings per share |
|
$ |
0.88 |
|
|
$ |
0.87 |
|
|
1 |
% |
Cash
flow from operations ($B) |
|
$ |
3.0 |
|
|
$ |
3.6 |
|
|
(16 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
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 2014 second
quarter ended April 30, 2014.
Second quarter GAAP diluted net earnings per share (EPS) was
$0.66, up from $0.55 in the prior-year period and within its
previously provided outlook of $0.62 to $0.66. Second quarter
non-GAAP diluted net EPS was $0.88, up from $0.87 in the prior-year
period and within its previously provided outlook of $0.85 to
$0.89. Second quarter non-GAAP net earnings and non-GAAP diluted
net EPS exclude after-tax costs of $418 million and $0.22 per
diluted share, respectively, related to the amortization of
intangible assets, restructuring charges and acquisition-related
charges.
Second quarter net revenue of $27.3 billion was down 1% from the
prior-year period and flat on a constant currency basis.
"With the first half of our fiscal year completed, I'm
pleased to report that HP's turnaround remains on track," said
Meg Whitman, president and chief executive officer,
HP. "With each passing quarter, HP is improving its systems,
structures and core go-to-market capabilities. We're gradually
shaping HP into a more nimble, lower-cost, more customer- and
partner-centric company that can successfully compete across a
rapidly changing IT landscape."
In May 2012, HP adopted a multi-year restructuring plan designed
to simplify business processes, accelerate innovation, lower costs
and deliver better results. HP previously estimated that
34,000 positions would be eliminated in connection with the plan.
As HP continues to reengineer the workforce to be more competitive
and meet its objectives, the previously estimated number of
eliminated positions will increase by between 11,000 to
16,000.
Outlook For the fiscal 2014 third quarter, HP estimates non-GAAP
diluted net EPS to be in the range of $0.86 to $0.90 and GAAP
diluted net EPS to be in the range of $0.59 to $0.63. Fiscal 2014
third quarter non-GAAP diluted net EPS estimates exclude after-tax
costs of approximately $0.27 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 $3.63 to $3.75 and GAAP diluted net EPS to be in the
range of $2.68 to $2.80. Fiscal 2014 non-GAAP diluted net EPS
estimates exclude after-tax costs of approximately $0.95 per share,
related primarily to the amortization of intangible assets and
restructuring charges.
Asset management HP generated $3.0 billion in cash flow from
operations in the second quarter, down 16% from the prior-year
period. Inventory ended the quarter at $5.8 billion, down 1 day
year over year to 25 days. Accounts receivable ended the quarter at
$14.3 billion, down 1 day year over year at 47 days. Accounts
payable ended the quarter at $13.5 billion, up 6 days year over
year to 59 days. HP's dividend payment of $0.1452 per share in the
second quarter resulted in cash usage of $298 million. HP also
utilized $831 million of cash during the quarter to repurchase
approximately 26.7 million shares of common stock in the open
market. HP exited the quarter with $15.4 billion in gross cash.
Fiscal 2014 second quarter segment results
- Personal Systems revenue was up 7% year over year with a 3.5%
operating margin. Commercial revenue increased 12% and Consumer
revenue declined 2%. Total units were up 10% with Desktops units up
6% and Notebooks units up 6%.
- Printing revenue was down 4% year over year with a 19.5%
operating margin. Total hardware units were up 1% with Commercial
hardware units up 3% and Consumer hardware units flat. Supplies
revenue was down 6%.
- Enterprise Group revenue was down 2% year over year with a
14.4% operating margin. Industry Standard Servers revenue was up
1%, Storage revenue was down 6%, Business Critical Systems revenue
was down 14%, Networking revenue was up 6% and Technology Services
revenue was down 5%.
- Enterprise Services revenue was down 7% year over year with a
2.5% operating margin. Application and Business Services
revenue was down 8%, and Infrastructure Technology Outsourcing
revenue declined 7%.
- Software revenue was flat year over year with a 19.2% operating
margin. License revenue was up 8%, support revenue was down 4%,
professional services revenue was up 1% and software-as-a-service
(SaaS) revenue was up 6%.
- HP Financial Services revenue was down 2% year over year with a
2% decrease in net portfolio assets and a 12% increase in financing
volume. The business delivered an operating margin of 11.4%.
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 Q2 FY14 earnings conference call is accessible via an audio
webcast at www.hp.com/investor/2014Q2webcast.
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
revenue on a constant currency basis, 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 capital
expenditures, 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. A reconciliation of the adjustments
to GAAP results for this quarter 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 revenue, operating profit,
operating margin, net earnings, diluted net earnings per share,
cash and cash equivalents, cash flow from operations, capital
expenditures, 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, net earnings,
net 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, 2013, 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 January 31, 2014. 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 reasonable, these amounts could differ materially
from actual reported amounts in HP's Quarterly Report on Form 10-Q
for the fiscal quarter ended April 30, 2014. 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 |
|
|
|
April 30, 2014 |
|
|
January 31, 2014 |
|
|
April 30, 2013 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenue |
|
$ |
27,309 |
|
|
$ |
28,154 |
|
|
$ |
27,582 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales |
|
|
20,704 |
|
|
|
21,736 |
|
|
|
21,055 |
|
|
Research and development |
|
|
873 |
|
|
|
811 |
|
|
|
815 |
|
|
Selling, general and administrative |
|
|
3,391 |
|
|
|
3,210 |
|
|
|
3,342 |
|
|
Amortization of intangible assets |
|
|
264 |
|
|
|
283 |
|
|
|
350 |
|
|
Restructuring charges |
|
|
252 |
|
|
|
114 |
|
|
|
408 |
|
|
Acquisition-related charges |
|
|
3 |
|
|
|
3 |
|
|
|
11 |
|
|
|
Total
costs and expenses |
|
|
25,487 |
|
|
|
26,157 |
|
|
|
25,981 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings from operations |
|
|
1,822 |
|
|
|
1,997 |
|
|
|
1,601 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and other, net |
|
|
(174 |
) |
|
|
(163 |
) |
|
|
(193 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings before taxes |
|
|
1,648 |
|
|
|
1,834 |
|
|
|
1,408 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for taxes |
|
|
(375 |
) |
|
|
(409 |
) |
|
|
(331 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings |
|
$ |
1,273 |
|
|
$ |
1,425 |
|
|
$ |
1,077 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.67 |
|
|
$ |
0.75 |
|
|
$ |
0.56 |
|
|
Diluted |
|
$ |
0.66 |
|
|
$ |
0.74 |
|
|
$ |
0.55 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash dividends declared per share |
|
$ |
- |
|
|
$ |
0.29 |
|
|
$ |
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average shares used to compute net earnings
per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
1,890 |
|
|
|
1,907 |
|
|
|
1,935 |
|
|
Diluted |
|
|
1,916 |
|
|
|
1,935 |
|
|
|
1,947 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
HEWLETT-PACKARD COMPANY AND SUBSIDIARIES |
|
CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS |
|
(Unaudited) |
|
(In millions except per share amounts) |
|
|
|
|
|
|
|
|
|
|
Six months ended |
|
|
|
April 30, |
|
|
|
2014 |
|
|
2013 |
|
|
|
|
|
|
|
|
|
|
Net revenue |
|
$ |
55,463 |
|
|
$ |
55,941 |
|
|
|
|
|
|
|
|
|
|
Costs and expenses: |
|
|
|
|
|
|
|
|
|
Cost of sales |
|
|
42,440 |
|
|
|
43,084 |
|
|
Research and development |
|
|
1,684 |
|
|
|
1,609 |
|
|
Selling, general and administrative |
|
|
6,601 |
|
|
|
6,642 |
|
|
Amortization of intangible assets |
|
|
547 |
|
|
|
700 |
|
|
Restructuring charges |
|
|
366 |
|
|
|
538 |
|
|
Acquisition-related charges |
|
|
6 |
|
|
|
15 |
|
|
|
Total
costs and expenses |
|
|
51,644 |
|
|
|
52,588 |
|
|
|
|
|
|
|
|
|
|
Earnings from operations |
|
|
3,819 |
|
|
|
3,353 |
|
|
|
|
|
|
|
|
|
|
Interest and other, net |
|
|
(337 |
) |
|
|
(372 |
) |
|
|
|
|
|
|
|
|
|
Earnings before taxes |
|
|
3,482 |
|
|
|
2,981 |
|
|
|
|
|
|
|
|
|
|
Provision for taxes |
|
|
(784 |
) |
|
|
(672 |
) |
|
|
|
|
|
|
|
|
|
Net earnings |
|
$ |
2,698 |
|
|
$ |
2,309 |
|
|
|
|
|
|
|
|
|
|
Net earnings per share: |
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
1.42 |
|
|
$ |
1.19 |
|
|
Diluted |
|
$ |
1.40 |
|
|
$ |
1.18 |
|
|
|
|
|
|
|
|
|
|
Cash dividends declared per share |
|
$ |
0.29 |
|
|
$ |
0.26 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average shares used to compute net earnings
per share: |
|
|
|
|
|
|
|
|
|
Basic |
|
|
1,898 |
|
|
|
1,944 |
|
|
Diluted |
|
|
1,922 |
|
|
|
1,952 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
HEWLETT-PACKARD COMPANY AND SUBSIDIARIES |
|
ADJUSTMENTS TO GAAP NET EARNINGS, EARNINGS FROM
OPERATIONS, |
|
OPERATING MARGIN AND DILUTED NET EARNINGS PER
SHARE |
|
(Unaudited) |
|
(In millions except per share amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended April 30, 2014 |
|
|
Diluted net earnings per share |
|
|
Three months ended January 31, 2014 |
|
|
Diluted net earnings per share |
|
|
Three months ended April 30, 2013 |
|
|
Diluted net earnings per share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net earnings |
|
$ |
1,273 |
|
|
$ |
0.66 |
|
|
$ |
1,425 |
|
|
$ |
0.74 |
|
|
$ |
1,077 |
|
|
$ |
0.55 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of intangible assets |
|
|
264 |
|
|
|
0.14 |
|
|
|
283 |
|
|
|
0.15 |
|
|
|
350 |
|
|
|
0.17 |
|
|
Restructuring charges |
|
|
252 |
|
|
|
0.13 |
|
|
|
114 |
|
|
|
0.06 |
|
|
|
408 |
|
|
|
0.21 |
|
|
Acquisition-related charges |
|
|
3 |
|
|
|
- |
|
|
|
3 |
|
|
|
- |
|
|
|
11 |
|
|
|
0.01 |
|
|
Adjustments for taxes |
|
|
(101 |
) |
|
|
(0.05 |
) |
|
|
(83 |
) |
|
|
(0.05 |
) |
|
|
(148 |
) |
|
|
(0.07 |
) |
Non-GAAP net earnings |
|
$ |
1,691 |
|
|
$ |
0.88 |
|
|
$ |
1,742 |
|
|
$ |
0.90 |
|
|
$ |
1,698 |
|
|
$ |
0.87 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP earnings from operations |
|
$ |
1,822 |
|
|
|
|
|
|
$ |
1,997 |
|
|
|
|
|
|
$ |
1,601 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of intangible assets |
|
|
264 |
|
|
|
|
|
|
|
283 |
|
|
|
|
|
|
|
350 |
|
|
|
|
|
|
Restructuring charges |
|
|
252 |
|
|
|
|
|
|
|
114 |
|
|
|
|
|
|
|
408 |
|
|
|
|
|
|
Acquisition-related charges |
|
|
3 |
|
|
|
|
|
|
|
3 |
|
|
|
|
|
|
|
11 |
|
|
|
|
|
Non-GAAP earnings from operations |
|
$ |
2,341 |
|
|
|
|
|
|
$ |
2,397 |
|
|
|
|
|
|
$ |
2,370 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating margin |
|
|
7 |
% |
|
|
|
|
|
|
7 |
% |
|
|
|
|
|
|
6 |
% |
|
|
|
|
Non-GAAP adjustments |
|
|
2 |
% |
|
|
|
|
|
|
2 |
% |
|
|
|
|
|
|
3 |
% |
|
|
|
|
Non-GAAP operating margin |
|
|
9 |
% |
|
|
|
|
|
|
9 |
% |
|
|
|
|
|
|
9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
HEWLETT-PACKARD COMPANY AND SUBSIDIARIES |
|
ADJUSTMENTS TO GAAP NET EARNINGS, EARNINGS FROM
OPERATIONS, |
|
OPERATING MARGIN AND DILUTED NET EARNINGS PER
SHARE |
|
(Unaudited) |
|
(In millions except per share amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six months ended April 30, 2014 |
|
|
Diluted net earnings per share |
|
|
Six months ended April 30, 2013 |
|
|
Diluted net earnings per share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net earnings |
|
$ |
2,698 |
|
|
$ |
1.40 |
|
|
$ |
2,309 |
|
|
$ |
1.18 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of intangible assets |
|
|
547 |
|
|
|
0.28 |
|
|
|
700 |
|
|
|
0.35 |
|
|
Restructuring charges |
|
|
366 |
|
|
|
0.19 |
|
|
|
538 |
|
|
|
0.28 |
|
|
Acquisition-related charges |
|
|
6 |
|
|
|
- |
|
|
|
15 |
|
|
|
0.01 |
|
|
Adjustments for taxes |
|
|
(184 |
) |
|
|
(0.08 |
) |
|
|
(259 |
) |
|
|
(0.13 |
) |
Non-GAAP net earnings |
|
$ |
3,433 |
|
|
$ |
1.79 |
|
|
$ |
3,303 |
|
|
$ |
1.69 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP earnings from operations |
|
$ |
3,819 |
|
|
|
|
|
|
$ |
3,353 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of intangible assets |
|
|
547 |
|
|
|
|
|
|
|
700 |
|
|
|
|
|
|
Restructuring charges |
|
|
366 |
|
|
|
|
|
|
|
538 |
|
|
|
|
|
|
Acquisition-related charges |
|
|
6 |
|
|
|
|
|
|
|
15 |
|
|
|
|
|
Non-GAAP earnings from operations |
|
$ |
4,738 |
|
|
|
|
|
|
$ |
4,606 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating margin |
|
|
7 |
% |
|
|
|
|
|
|
6 |
% |
|
|
|
|
Non-GAAP adjustments |
|
|
2 |
% |
|
|
|
|
|
|
2 |
% |
|
|
|
|
Non-GAAP operating margin |
|
|
9 |
% |
|
|
|
|
|
|
8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
HEWLETT-PACKARD COMPANY AND SUBSIDIARIES |
CONSOLIDATED CONDENSED BALANCE SHEETS |
(In millions) |
|
|
|
|
|
|
|
As of |
|
|
April 30, 2014 |
|
October 31, 2013 |
|
|
(Unaudited) |
|
|
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
15,096 |
|
$ |
12,163 |
|
Accounts receivable |
|
|
14,288 |
|
|
15,876 |
|
Financing receivables |
|
|
3,112 |
|
|
3,144 |
|
Inventory |
|
|
5,840 |
|
|
6,046 |
|
Other current assets |
|
|
11,547 |
|
|
13,135 |
|
|
|
|
|
|
|
|
|
Total
current assets |
|
|
49,883 |
|
|
50,364 |
|
|
|
|
|
|
|
Property, plant and equipment |
|
|
11,350 |
|
|
11,463 |
|
|
|
|
|
|
|
Long-term financing receivables and other assets |
|
|
9,043 |
|
|
9,556 |
|
|
|
|
|
|
|
Goodwill and intangible assets |
|
|
33,696 |
|
|
34,293 |
|
|
|
|
|
|
|
Total assets |
|
$ |
103,972 |
|
$ |
105,676 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
Notes payable and short-term borrowings |
|
$ |
5,396 |
|
$ |
5,979 |
|
Accounts payable |
|
|
13,521 |
|
|
14,019 |
|
Employee compensation and benefits |
|
|
3,662 |
|
|
4,436 |
|
Taxes on earnings |
|
|
1,263 |
|
|
1,203 |
|
Deferred revenue |
|
|
6,416 |
|
|
6,477 |
|
Other accrued liabilities |
|
|
13,022 |
|
|
13,407 |
|
|
|
|
|
|
|
|
|
Total
current liabilities |
|
|
43,280 |
|
|
45,521 |
|
|
|
|
|
|
|
Long-term debt |
|
|
17,190 |
|
|
16,608 |
|
|
|
|
|
|
|
Other liabilities |
|
|
14,920 |
|
|
15,891 |
|
|
|
|
|
|
|
Stockholders' equity: |
|
|
|
|
|
|
|
HP stockholders' equity |
|
|
28,185 |
|
|
27,269 |
|
Non-controlling interests |
|
|
397 |
|
|
387 |
|
|
|
|
|
|
|
|
|
Total
stockholders' equity |
|
|
28,582 |
|
|
27,656 |
|
|
|
|
|
|
|
Total liabilities and stockholders' equity |
|
$ |
103,972 |
|
$ |
105,676 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
HEWLETT-PACKARD COMPANY AND SUBSIDIARIES |
|
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS |
|
(Unaudited) |
|
(In millions) |
|
|
|
|
|
Three months ended |
|
|
Six months ended |
|
|
|
April 30, 2014 |
|
|
April 30, 2014 |
|
Cash flows from operating activities: |
|
|
|
|
|
|
|
|
|
Net earnings |
|
$ |
1,273 |
|
|
$ |
2,698 |
|
|
Adjustments to reconcile net earnings to net cash
provided by operating activities: |
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
1,087 |
|
|
|
2,204 |
|
|
|
Stock-based compensation expense |
|
|
130 |
|
|
|
300 |
|
|
|
Provision for doubtful accounts and inventory |
|
|
55 |
|
|
|
112 |
|
|
|
Restructuring charges |
|
|
252 |
|
|
|
366 |
|
|
|
Deferred taxes on earnings |
|
|
(99 |
) |
|
|
(90 |
) |
|
|
Excess tax benefit from stock-based compensation |
|
|
(6 |
) |
|
|
(33 |
) |
|
|
Other, net |
|
|
47 |
|
|
|
14 |
|
|
|
|
|
|
|
|
|
|
|
|
Changes in operating assets and liabilities (net of
acquisitions): |
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
(801 |
) |
|
|
1,590 |
|
|
|
|
Financing receivables |
|
|
(42 |
) |
|
|
254 |
|
|
|
|
Inventory |
|
|
126 |
|
|
|
107 |
|
|
|
|
Accounts payable |
|
|
765 |
|
|
|
(400 |
) |
|
|
|
Taxes on earnings |
|
|
(17 |
) |
|
|
153 |
|
|
|
|
Restructuring |
|
|
(300 |
) |
|
|
(681 |
) |
|
|
|
Other assets and liabilities |
|
|
525 |
|
|
|
(609 |
) |
|
|
|
|
Net
cash provided by operating activities |
|
|
2,995 |
|
|
|
5,985 |
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities: |
|
|
|
|
|
|
|
|
|
|
Investment in property, plant and equipment |
|
|
(840 |
) |
|
|
(1,837 |
) |
|
|
Proceeds from sale of property, plant and
equipment |
|
|
120 |
|
|
|
570 |
|
|
|
Purchases of available-for-sale securities and other
investments |
|
|
(316 |
) |
|
|
(451 |
) |
|
|
Proceeds from sale of available-for-sale securities and
other investments |
|
|
79 |
|
|
|
544 |
|
|
|
Payments made in connection with business
acquisitions |
|
|
(20 |
) |
|
|
(20 |
) |
|
|
|
Net cash used in investing activities |
|
|
(977 |
) |
|
|
(1,194 |
) |
|
|
|
|
|
|
|
|
|
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
|
|
Issuance of commercial paper and notes payable,
net |
|
|
58 |
|
|
|
60 |
|
|
|
Issuance of debt |
|
|
- |
|
|
|
2,005 |
|
|
|
Payment of debt |
|
|
(2,070 |
) |
|
|
(2,115 |
) |
|
|
Issuance of common stock under employee stock
plans |
|
|
48 |
|
|
|
131 |
|
|
|
Repurchase of common stock |
|
|
(831 |
) |
|
|
(1,396 |
) |
|
|
Excess tax benefit from stock-based compensation |
|
|
6 |
|
|
|
33 |
|
|
|
Cash dividends paid |
|
|
(298 |
) |
|
|
(576 |
) |
|
|
|
Net cash used in financing activities |
|
|
(3,087 |
) |
|
|
(1,858 |
) |
|
|
|
|
|
|
|
|
|
(Decrease) increase in cash and cash equivalents |
|
|
(1,069 |
) |
|
|
2,933 |
|
Cash and cash equivalents at beginning of period |
|
|
16,165 |
|
|
|
12,163 |
|
Cash and cash equivalents at end of period |
|
$ |
15,096 |
|
|
$ |
15,096 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
HEWLETT-PACKARD COMPANY AND SUBSIDIARIES |
|
SEGMENT INFORMATION |
|
(Unaudited) |
|
(In millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
|
|
April 30, 2014 |
|
|
January 31, 2014 |
|
|
April 30, 2013 |
|
Net revenue:(a) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Personal Systems |
|
$ |
8,176 |
|
|
$ |
8,530 |
|
|
$ |
7,610 |
|
|
Printing |
|
|
5,834 |
|
|
|
5,815 |
|
|
|
6,094 |
|
|
|
Total
Printing and Personal Systems Group |
|
|
14,010 |
|
|
|
14,345 |
|
|
|
13,704 |
|
|
Enterprise Group |
|
|
6,657 |
|
|
|
6,993 |
|
|
|
6,794 |
|
|
Enterprise Services |
|
|
5,702 |
|
|
|
5,595 |
|
|
|
6,133 |
|
|
Software |
|
|
971 |
|
|
|
916 |
|
|
|
967 |
|
|
HP Financial Services |
|
|
867 |
|
|
|
870 |
|
|
|
881 |
|
|
Corporate Investments |
|
|
6 |
|
|
|
288 |
|
|
|
10 |
|
|
|
Total
segments |
|
|
28,213 |
|
|
|
29,007 |
|
|
|
28,489 |
|
|
Elimination of intersegment net revenue and other |
|
|
(904 |
) |
|
|
(853 |
) |
|
|
(907 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
HP consolidated net revenue |
|
$ |
27,309 |
|
|
$ |
28,154 |
|
|
$ |
27,582 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings before taxes:(a) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Personal Systems |
|
$ |
290 |
|
|
$ |
279 |
|
|
$ |
244 |
|
|
Printing |
|
|
1,140 |
|
|
|
979 |
|
|
|
970 |
|
|
|
Total
Printing and Personal Systems Group |
|
|
1,430 |
|
|
|
1,258 |
|
|
|
1,214 |
|
|
Enterprise Group |
|
|
961 |
|
|
|
1,006 |
|
|
|
1,074 |
|
|
Enterprise Services |
|
|
144 |
|
|
|
57 |
|
|
|
156 |
|
|
Software |
|
|
186 |
|
|
|
145 |
|
|
|
180 |
|
|
HP Financial Services |
|
|
99 |
|
|
|
101 |
|
|
|
97 |
|
|
Corporate Investments |
|
|
(98 |
) |
|
|
121 |
|
|
|
(75 |
) |
|
|
Total
segment earnings from operations |
|
|
2,722 |
|
|
|
2,688 |
|
|
|
2,646 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate and unallocated costs and eliminations |
|
|
(251 |
) |
|
|
(121 |
) |
|
|
(169 |
) |
|
Stock-based compensation expense |
|
|
(130 |
) |
|
|
(170 |
) |
|
|
(107 |
) |
|
Amortization of intangible assets |
|
|
(264 |
) |
|
|
(283 |
) |
|
|
(350 |
) |
|
Restructuring charges |
|
|
(252 |
) |
|
|
(114 |
) |
|
|
(408 |
) |
|
Acquisition-related charges |
|
|
(3 |
) |
|
|
(3 |
) |
|
|
(11 |
) |
|
Interest and other, net |
|
|
(174 |
) |
|
|
(163 |
) |
|
|
(193 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
HP consolidated earnings before taxes |
|
$ |
1,648 |
|
|
$ |
1,834 |
|
|
$ |
1,408 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
Effective at the beginning of its first quarter of fiscal 2014, HP
implemented certain organizational changes to align its segment
financial reporting more closely with its current business
structure. These organizational changes include (i) transferring
the HP Exstream business from the Commercial Hardware business unit
within the Printing segment to the Software segment; (ii)
transferring the Personal Systems trade and warranty support
business from the Technology Services business unit within the
Enterprise Group segment to the Other business unit within the
Personal Systems segment; (iii) transferring the spare and
replacement parts business supporting the Personal Systems and
Printing segments from the Technology Services business unit within
the Enterprise Group segment to the Other business unit within the
Personal Systems segment and the Commercial Hardware business unit
within the Printing segment, respectively; and (iv) transferring
certain cloud-related incubation activities previously reported in
Corporate and unallocated costs and eliminations and in the
Enterprise Group segment to the Corporate Investments segment. In
addition, HP transferred certain intrasegment eliminations from the
Enterprise Services segment and the Enterprise Group segment to
corporate intersegment revenue eliminations. |
|
|
|
HP reflected these changes to its segment information in prior
reporting periods on an as-if basis, which resulted in the transfer
of revenue among the Personal Systems, Printing, the Enterprise
Group, Enterprise Services and Software segments. These changes
also resulted in the transfer of operating profit among the
Personal Systems, Printing, the Enterprise Group, Software and
Corporate Investments segments. These changes had no impact on HP's
previously reported consolidated net revenue, earnings from
operations, net earnings or net earnings per share. |
|
|
|
|
|
HEWLETT-PACKARD COMPANY AND SUBSIDIARIES |
|
SEGMENT INFORMATION |
|
(Unaudited) |
|
(In millions) |
|
|
|
|
|
|
|
|
|
|
Six months ended |
|
|
|
April 30, |
|
|
|
2014 |
|
|
2013 |
|
Net revenue:(a) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Personal Systems |
|
$ |
16,706 |
|
|
$ |
15,842 |
|
|
Printing |
|
|
11,649 |
|
|
|
12,040 |
|
|
|
Total
Printing and Personal Systems Group |
|
|
28,355 |
|
|
|
27,882 |
|
|
Enterprise Group |
|
|
13,650 |
|
|
|
13,742 |
|
|
Enterprise Services |
|
|
11,297 |
|
|
|
12,171 |
|
|
Software |
|
|
1,887 |
|
|
|
1,918 |
|
|
HP Financial Services |
|
|
1,737 |
|
|
|
1,838 |
|
|
Corporate Investments |
|
|
294 |
|
|
|
14 |
|
|
|
Total
segments |
|
|
57,220 |
|
|
|
57,565 |
|
|
Elimination of intersegment net revenue and other |
|
|
(1,757 |
) |
|
|
(1,624 |
) |
|
|
|
|
|
|
|
|
|
|
|
Total
HP consolidated net revenue |
|
$ |
55,463 |
|
|
$ |
55,941 |
|
|
|
|
|
|
|
|
|
|
Earnings before taxes:(a) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Personal Systems |
|
$ |
569 |
|
|
$ |
477 |
|
|
Printing |
|
|
2,119 |
|
|
|
1,937 |
|
|
|
Total
Printing and Personal Systems Group |
|
|
2,688 |
|
|
|
2,414 |
|
|
Enterprise Group |
|
|
1,967 |
|
|
|
2,144 |
|
|
Enterprise Services |
|
|
201 |
|
|
|
232 |
|
|
Software |
|
|
331 |
|
|
|
335 |
|
|
HP Financial Services |
|
|
200 |
|
|
|
198 |
|
|
Corporate Investments |
|
|
23 |
|
|
|
(148 |
) |
|
|
Total
segment earnings from operations |
|
|
5,410 |
|
|
|
5,175 |
|
|
|
|
|
|
|
|
|
|
|
Corporate and unallocated costs and eliminations |
|
|
(372 |
) |
|
|
(278 |
) |
|
Stock-based compensation expense |
|
|
(300 |
) |
|
|
(291 |
) |
|
Amortization of intangible assets |
|
|
(547 |
) |
|
|
(700 |
) |
|
Restructuring charges |
|
|
(366 |
) |
|
|
(538 |
) |
|
Acquisition-related charges |
|
|
(6 |
) |
|
|
(15 |
) |
|
Interest and other, net |
|
|
(337 |
) |
|
|
(372 |
) |
|
|
|
|
|
|
|
|
|
|
|
Total
HP consolidated earnings before taxes |
|
$ |
3,482 |
|
|
$ |
2,981 |
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
Effective at the beginning of its first quarter of fiscal 2014, HP
implemented certain organizational changes to align its segment
financial reporting more closely with its current business
structure. These organizational changes include (i) transferring
the HP Exstream business from the Commercial Hardware business unit
within the Printing segment to the Software segment; (ii)
transferring the Personal Systems trade and warranty support
business from the Technology Services business unit within the
Enterprise Group segment to the Other business unit within the
Personal Systems segment; (iii) transferring the spare and
replacement parts business supporting the Personal Systems and
Printing segments from the Technology Services business unit within
the Enterprise Group segment to the Other business unit within the
Personal Systems segment and the Commercial Hardware business unit
within the Printing segment, respectively; and (iv) transferring
certain cloud-related incubation activities previously reported in
Corporate and unallocated costs and eliminations and in the
Enterprise Group segment to the Corporate Investments segment. In
addition, HP transferred certain intrasegment eliminations from the
Enterprise Services segment and the Enterprise Group segment to
corporate intersegment revenue eliminations. |
|
|
|
HP reflected these changes to its segment information in prior
reporting periods on an as-if basis, which resulted in the transfer
of revenue among the Personal Systems, Printing, the Enterprise
Group, Enterprise Services and Software segments. These changes
also resulted in the transfer of operating profit among the
Personal Systems, Printing, the Enterprise Group, Software and
Corporate Investments segments. These changes had no impact on HP's
previously reported consolidated net revenue, earnings from
operations, net earnings or net earnings per share. |
|
|
|
|
|
HEWLETT-PACKARD COMPANY AND SUBSIDIARIES |
|
SEGMENT / BUSINESS UNIT INFORMATION |
|
(Unaudited) |
|
(In millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
|
Growth rate (%) |
|
|
|
April 30, 2014 |
|
|
January 31, 2014 |
|
|
April 30, 2013 |
|
|
Q/Q |
|
|
Y/Y |
|
Net revenue:(a) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Printing and Personal Systems Group |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Personal Systems |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notebooks |
|
$ |
3,977 |
|
|
$ |
4,335 |
|
|
$ |
3,718 |
|
|
(8 |
%) |
|
7 |
% |
|
|
|
Desktops |
|
|
3,343 |
|
|
|
3,274 |
|
|
|
3,103 |
|
|
2 |
% |
|
8 |
% |
|
|
|
Workstations |
|
|
548 |
|
|
|
533 |
|
|
|
521 |
|
|
3 |
% |
|
5 |
% |
|
|
|
Other |
|
|
308 |
|
|
|
388 |
|
|
|
268 |
|
|
(21 |
%) |
|
15 |
% |
|
|
|
|
Total Personal Systems |
|
|
8,176 |
|
|
|
8,530 |
|
|
|
7,610 |
|
|
(4 |
%) |
|
7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Printing |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplies |
|
|
3,866 |
|
|
|
3,795 |
|
|
|
4,122 |
|
|
2 |
% |
|
(6 |
%) |
|
|
|
Commercial Hardware |
|
|
1,402 |
|
|
|
1,347 |
|
|
|
1,411 |
|
|
4 |
% |
|
(1 |
%) |
|
|
|
Consumer Hardware |
|
|
566 |
|
|
|
673 |
|
|
|
561 |
|
|
(16 |
%) |
|
1 |
% |
|
|
|
|
Total Printing |
|
|
5,834 |
|
|
|
5,815 |
|
|
|
6,094 |
|
|
0 |
% |
|
(4 |
%) |
|
|
|
|
|
Total
Printing and Personal Systems Group |
|
|
14,010 |
|
|
|
14,345 |
|
|
|
13,704 |
|
|
(2 |
%) |
|
2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Enterprise Group |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Industry Standard Servers |
|
|
2,829 |
|
|
|
3,178 |
|
|
|
2,806 |
|
|
(11 |
%) |
|
1 |
% |
|
|
Technology Services |
|
|
2,132 |
|
|
|
2,123 |
|
|
|
2,247 |
|
|
0 |
% |
|
(5 |
%) |
|
|
Storage |
|
|
808 |
|
|
|
834 |
|
|
|
857 |
|
|
(3 |
%) |
|
(6 |
%) |
|
|
Networking |
|
|
658 |
|
|
|
630 |
|
|
|
618 |
|
|
4 |
% |
|
6 |
% |
|
|
Business Critical Systems |
|
|
230 |
|
|
|
228 |
|
|
|
266 |
|
|
1 |
% |
|
(14 |
%) |
|
|
|
|
Total Enterprise Group |
|
|
6,657 |
|
|
|
6,993 |
|
|
|
6,794 |
|
|
(5 |
%) |
|
(2 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Enterprise Services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Infrastructure Technology Outsourcing |
|
|
3,597 |
|
|
|
3,501 |
|
|
|
3,855 |
|
|
3 |
% |
|
(7 |
%) |
|
|
|
Application and Business Services |
|
|
2,105 |
|
|
|
2,094 |
|
|
|
2,278 |
|
|
1 |
% |
|
(8 |
%) |
|
|
|
|
Total Enterprise Services |
|
|
5,702 |
|
|
|
5,595 |
|
|
|
6,133 |
|
|
2 |
% |
|
(7 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Software |
|
|
971 |
|
|
|
916 |
|
|
|
967 |
|
|
6 |
% |
|
0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
HP Financial Services |
|
|
867 |
|
|
|
870 |
|
|
|
881 |
|
|
0 |
% |
|
(2 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate Investments |
|
|
6 |
|
|
|
288 |
|
|
|
10 |
|
|
(98 |
%) |
|
(40 |
%) |
|
|
|
|
Total segments |
|
|
28,213 |
|
|
|
29,007 |
|
|
|
28,489 |
|
|
(3 |
%) |
|
(1 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Elimination of intersegment net revenue and other |
|
|
(904 |
) |
|
|
(853 |
) |
|
|
(907 |
) |
|
6 |
% |
|
0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total HP consolidated net revenue |
|
$ |
27,309 |
|
|
$ |
28,154 |
|
|
$ |
27,582 |
|
|
(3 |
%) |
|
(1 |
%) |
|
|
(a) |
Effective at the beginning of its first quarter of fiscal 2014, HP
implemented certain organizational changes to align its segment
financial reporting more closely with its current business
structure. These organizational changes include (i) transferring
the HP Exstream business from the Commercial Hardware business unit
within the Printing segment to the Software segment; (ii)
transferring the Personal Systems trade and warranty support
business from the Technology Services business unit within the
Enterprise Group segment to the Other business unit within the
Personal Systems segment; (iii) transferring the spare and
replacement parts business supporting the Personal Systems and
Printing segments from the Technology Services business unit within
the Enterprise Group segment to the Other business unit within the
Personal Systems segment and the Commercial Hardware business unit
within the Printing segment, respectively; and (iv) transferring
certain cloud-related incubation activities previously reported in
Corporate and unallocated costs and eliminations and in the
Enterprise Group segment to the Corporate Investments segment. In
addition, HP transferred certain intrasegment eliminations from the
Enterprise Services segment and the Enterprise Group segment to
corporate intersegment revenue eliminations. |
|
|
|
HP reflected these changes to its segment information in prior
reporting periods on an as-if basis, which resulted in the transfer
of revenue among the Personal Systems, Printing, the Enterprise
Group, Enterprise Services and Software segments. These changes had
no impact on HP's previously reported consolidated net revenue,
earnings from operations, net earnings or net earnings per
share. |
|
|
|
|
|
|
HEWLETT-PACKARD COMPANY AND SUBSIDIARIES |
|
SEGMENT / BUSINESS UNIT INFORMATION |
|
(Unaudited) |
|
(In millions) |
|
|
|
|
|
|
|
Six months ended |
|
|
|
April 30, |
|
|
|
2014 |
|
|
2013 |
|
Net revenue:(a) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Printing and Personal Systems Group |
|
|
|
|
|
|
|
|
|
|
Personal Systems |
|
|
|
|
|
|
|
|
|
|
|
Notebooks |
|
$ |
8,312 |
|
|
$ |
7,846 |
|
|
|
|
Desktops |
|
|
6,617 |
|
|
|
6,424 |
|
|
|
|
Workstations |
|
|
1,081 |
|
|
|
1,056 |
|
|
|
|
Other |
|
|
696 |
|
|
|
516 |
|
|
|
|
|
Total
Personal Systems |
|
|
16,706 |
|
|
|
15,842 |
|
|
|
|
|
|
|
|
|
|
|
Printing |
|
|
|
|
|
|
|
|
|
|
Supplies |
|
|
7,661 |
|
|
|
8,015 |
|
|
|
Commercial Hardware |
|
|
2,749 |
|
|
|
2,785 |
|
|
|
Consumer Hardware |
|
|
1,239 |
|
|
|
1,240 |
|
|
|
|
Total Printing |
|
|
11,649 |
|
|
|
12,040 |
|
|
|
|
|
Total
Printing and Personal Systems Group |
|
|
28,355 |
|
|
|
27,882 |
|
|
|
|
|
|
|
|
|
|
|
Enterprise Group |
|
|
|
|
|
|
|
|
|
|
Industry Standard Servers |
|
|
6,007 |
|
|
|
5,800 |
|
|
|
Technology Services |
|
|
4,255 |
|
|
|
4,454 |
|
|
|
Storage |
|
|
1,642 |
|
|
|
1,690 |
|
|
|
Networking |
|
|
1,288 |
|
|
|
1,226 |
|
|
|
Business Critical Systems |
|
|
458 |
|
|
|
572 |
|
|
|
|
Total Enterprise Group |
|
|
13,650 |
|
|
|
13,742 |
|
|
|
|
|
|
|
|
|
|
|
Enterprise Services |
|
|
|
|
|
|
|
|
|
|
Infrastructure Technology Outsourcing |
|
|
7,098 |
|
|
|
7,710 |
|
|
|
Application and Business Services |
|
|
4,199 |
|
|
|
4,461 |
|
|
|
|
Total Enterprise Services |
|
|
11,297 |
|
|
|
12,171 |
|
|
|
|
|
|
|
|
|
|
|
Software |
|
|
1,887 |
|
|
|
1,918 |
|
|
|
|
|
|
|
|
|
|
|
HP Financial Services |
|
|
1,737 |
|
|
|
1,838 |
|
|
|
|
|
|
|
|
|
|
|
Corporate Investments |
|
|
294 |
|
|
|
14 |
|
|
|
|
Total segments |
|
|
57,220 |
|
|
|
57,565 |
|
|
|
|
|
|
|
|
|
|
|
Elimination of intersegment net revenue and other |
|
|
(1,757 |
) |
|
|
(1,624 |
) |
|
|
|
|
|
|
|
|
|
|
Total HP consolidated net revenue |
|
$ |
55,463 |
|
|
$ |
55,941 |
|
|
|
(a) |
Effective at the beginning of its first quarter of fiscal 2014, HP
implemented certain organizational changes to align its segment
financial reporting more closely with its current business
structure. These organizational changes include (i) transferring
the HP Exstream business from the Commercial Hardware business unit
within the Printing segment to the Software segment; (ii)
transferring the Personal Systems trade and warranty support
business from the Technology Services business unit within the
Enterprise Group segment to the Other business unit within the
Personal Systems segment; (iii) transferring the spare and
replacement parts business supporting the Personal Systems and
Printing segments from the Technology Services business unit within
the Enterprise Group segment to the Other usiness unit within the
Personal Systems segment and the Commercial Hardware business unit
within the Printing segment, respectively; and (iv) transferring
certain cloud-related incubation activities previously reported in
Corporate and unallocated costs and eliminations and in the
Enterprise Group segment to the Corporate Investments segment. In
addition, HP transferred certain intrasegment eliminations from the
Enterprise Services segment and the Enterprise Group segment to
corporate intersegment revenue eliminations. |
|
|
|
HP reflected these changes to its segment information in prior
reporting periods on an as-if basis, which resulted in the transfer
of revenue among the Personal Systems, Printing, the Enterprise
Group, Enterprise Services and Software segments. These changes had
no impact on HP's previously reported consolidated net revenue,
earnings from operations, net earnings or net earnings per
share. |
|
|
|
|
|
|
HEWLETT-PACKARD COMPANY AND SUBSIDIARIES |
|
SEGMENT OPERATING MARGIN SUMMARY DATA |
|
(Unaudited) |
|
|
|
|
|
Three months ended |
|
|
Change in Operating Margin (pts) |
|
|
|
April 30, 2014 |
|
|
Q/Q |
|
|
Y/Y |
|
|
|
|
|
|
|
|
|
|
|
Segment operating margin:(a) |
|
|
|
|
|
|
|
|
|
|
Personal Systems |
|
3.5 |
% |
|
0.2 pts |
|
|
0.3 pts |
|
|
Printing |
|
19.5 |
% |
|
2.7 pts |
|
|
3.6 pts |
|
|
|
Printing and Personal Systems Group |
|
10.2 |
% |
|
1.4 pts |
|
|
1.3 pts |
|
|
|
|
|
|
|
|
|
|
|
|
|
Enterprise Group |
|
14.4 |
% |
|
- |
|
|
(1.4 pts |
) |
|
Enterprise Services |
|
2.5 |
% |
|
1.5 pts |
|
|
- |
|
|
Software |
|
19.2 |
% |
|
3.4 pts |
|
|
0.6 pts |
|
|
HP Financial Services |
|
11.4 |
% |
|
(0.2 pts |
) |
|
0.4 pts |
|
|
Corporate Investments (b) |
|
NM |
|
|
NM |
|
|
NM |
|
|
|
Total
segments |
|
9.6 |
% |
|
0.3 pts |
|
|
0.3 pts |
|
|
|
|
|
|
|
|
|
|
|
(a) |
Effective at the beginning of its first quarter of fiscal 2014, HP
implemented certain organizational changes to align its segment
financial reporting more closely with its current business
structure. These organizational changes include (i) transferring
the HP Exstream business from the Commercial Hardware business unit
within the Printing segment to the Software segment; (ii)
transferring the Personal Systems trade and warranty support
business from the Technology Services business unit within the
Enterprise Group segment to the Other business unit within the
Personal Systems segment; (iii) transferring the spare and
replacement parts business supporting the Personal Systems and
Printing segments from the Technology Services business unit within
the Enterprise Group segment to the Other business unit within the
Personal Systems segment and the Commercial Hardware business unit
within the Printing segment, respectively; and (iv) transferring
certain cloud-related incubation activities previously reported in
Corporate and unallocated costs and eliminations and in the
Enterprise Group segment to the Corporate Investments segment. In
addition, HP transferred certain intrasegment eliminations from the
Enterprise Services segment and the Enterprise Group segment to
corporate intersegment revenue eliminations. |
|
|
|
HP
reflected these changes to its segment information in prior
reporting periods on an as-if basis, which resulted in the transfer
of revenue among the Personal Systems, Printing, the Enterprise
Group, Enterprise Services and Software segments. These changes
also resulted in the transfer of operating profit among the
Personal Systems, Printing, the Enterprise Group, Software and
Corporate Investments segments. These changes had no impact on HP's
previously reported consolidated net revenue, earnings from
operations, net earnings or net earnings per share. |
|
|
(b) |
"NM"
represents not meaningful. |
|
|
|
|
|
HEWLETT-PACKARD COMPANY AND SUBSIDIARIES |
CALCULATION OF DILUTED NET EARNINGS PER SHARE |
(Unaudited) |
(In millions except per share amounts) |
|
|
|
|
|
|
|
|
|
Three months ended |
|
|
April 30, 2014 |
|
January 31, 2014 |
|
April 30, 2013 |
|
|
|
|
|
|
|
|
|
|
Numerator: |
|
|
|
|
|
|
|
|
|
|
GAAP net earnings |
|
$ |
1,273 |
|
$ |
1,425 |
|
$ |
1,077 |
|
Non-GAAP net earnings |
|
$ |
1,691 |
|
$ |
1,742 |
|
$ |
1,698 |
|
|
|
|
|
|
|
|
|
|
Denominator: |
|
|
|
|
|
|
|
|
|
|
Weighted-average number of shares outstanding during
the reporting period |
|
|
1,890 |
|
|
1,907 |
|
|
1,935 |
|
Dilutive effect of employee stock plans(a) |
|
|
26 |
|
|
28 |
|
|
12 |
|
|
Weighted-average number of shares used to compute diluted net
earnings per share |
|
|
1,916 |
|
|
1,935 |
|
|
1,947 |
|
|
|
|
|
|
|
|
|
|
GAAP diluted net earnings per share |
|
$ |
0.66 |
|
$ |
0.74 |
|
$ |
0.55 |
Non-GAAP diluted net earnings per share |
|
$ |
0.88 |
|
$ |
0.90 |
|
$ |
0.87 |
|
|
|
|
|
|
|
|
|
|
(a) |
Includes any dilutive effect of outstanding stock options,
performance-based restricted stock units, restricted stock units
and restricted stock. |
|
|
|
|
|
HEWLETT-PACKARD COMPANY AND SUBSIDIARIES |
CALCULATION OF DILUTED NET EARNINGS PER SHARE |
(Unaudited) |
(In millions except per share amounts) |
|
|
|
|
|
|
|
Six months ended |
|
|
April 30, |
|
|
2014 |
|
2013 |
|
|
|
|
|
|
|
Numerator: |
|
|
|
|
|
|
|
GAAP net earnings |
|
$ |
2,698 |
|
$ |
2,309 |
|
Non-GAAP net earnings |
|
$ |
3,433 |
|
$ |
3,303 |
|
|
|
|
|
|
|
Denominator: |
|
|
|
|
|
|
|
Weighted-average number of shares outstanding during
the reporting period |
|
|
1,898 |
|
|
1,944 |
|
Dilutive effect of employee stock plans(a) |
|
|
24 |
|
|
8 |
|
|
Weighted-average number of shares used to compute diluted net
earnings per share |
|
|
1,922 |
|
|
1,952 |
|
|
|
|
|
|
|
GAAP diluted net earnings per share |
|
$ |
1.40 |
|
$ |
1.18 |
Non-GAAP diluted net earnings per share |
|
$ |
1.79 |
|
$ |
1.69 |
|
|
|
|
|
|
|
(a) |
Includes any dilutive effect of outstanding stock options,
performance-based restricted stock 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 revenue on a constant currency basis, 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 capital expenditures, 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 computed in accordance with, or
as an alternative to, generally accepted accounting principles in
the United States. The GAAP measure most directly comparable to
revenue on a constant currency basis is revenue. 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 capital expenditures is capital expenditures. 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 Revenue on a constant currency basis assumes no change in the
foreign exchange rate from the prior-year period. 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 the 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:
- 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.
Net capital expenditures is defined as investments in property
plant and equipment less proceeds from the sale of property, plant
and equipment. 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 net capital expenditures includes proceeds from
the sale of property, plant and equipment, HP believes that net
capital expenditures provides a more accurate and complete
assessment of HP's liquidity. Because free cash flow includes the
effect of net 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.
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. HP Financial Services (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 condensed balance sheet.
Operating company net debt is a non-GAAP measure that is defined as
total company net debt less 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. 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 the equivalent GAAP earnings measure and cash
flows.
- HP may not be able to liquidate immediately the short-term and
long-term investments included in gross cash, which may limit the
usefulness of gross cash as a liquidity measure.
- Other companies may calculate revenue on a constant currency
basis, 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 capital expenditures, 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 news 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 revenue on a constant currency basis,
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 capital expenditures, 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 may be calculated in a similar manner.
© 2014 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