HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
(In millions)
Three months Nine months
ended ended
July 31, July 31,
2012 2012
------------ ------------
Cash flows from operating activities:
Net loss $ (8,857) $ (5,796)
Adjustments to reconcile net earnings to net
cash provided by operating activities:
Depreciation and amortization 1,306 3,894
Impairment of goodwill and purchased
intangible assets 9,188 9,188
Stock-based compensation expense 150 494
Provision for bad debt and inventory 107 254
Restructuring charges 1,795 1,888
Deferred taxes on earnings (535) (690)
Excess tax benefit from stock-based
compensation - (12)
Other, net 90 330
Changes in operating assets and liabilities:
Accounts and financing receivables 956 2,435
Inventory (91) (2)
Accounts payable (345) (2,196)
Taxes on earnings 14 (40)
Restructuring (198) (472)
Other assets and liabilities (734) (2,763)
------------ ------------
Net cash provided by operating activities 2,846 6,512
------------ ------------
Cash flows from investing activities:
Investment in property, plant and equipment (870) (2,833)
Proceeds from sale of property, plant and
equipment 97 321
Purchases of available-for-sale securities and
other investments (228) (793)
Maturities and sales of available-for-sale
securities and other investments 170 516
Payments made in connection with business
acquisitions, net of cash acquired - (141)
Proceeds from business divestiture, net 6 87
------------ ------------
Net cash used in investing activities (825) (2,843)
------------ ------------
Cash flows from financing activities:
Issuance (repayment) of commercial paper and
notes payable, net 239 (2,553)
Issuance of debt 48 5,100
Payment of debt (561) (3,222)
Issuance of common stock under employee stock
plans 76 710
Repurchase of common stock (365) (1,495)
Excess tax benefit from stock-based
compensation - 12
Cash dividends paid (260) (755)
------------ ------------
Net cash used in financing activities (823) (2,203)
------------ ------------
Increase in cash and cash equivalents 1,198 1,466
Cash and cash equivalents at beginning of period 8,311 8,043
------------ ------------
Cash and cash equivalents at end of period $ 9,509 $ 9,509
============ ============
HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
SEGMENT INFORMATION
(Unaudited)
(In millions)
Three months ended
----------------------------------
July 31, April 30, July 31,
2012 2012 2011
---------- ---------- ----------
Net revenue:(a)
Personal Systems Group $ 8,620 $ 9,452 $ 9,592
Services 8,754 8,831 9,030
Imaging and Printing Group 6,017 6,132 6,183
Enterprise Servers, Storage and
Networking 5,143 5,211 5,348
Software 973 970 822
HP Financial Services 935 968 932
Corporate Investments 19 18 235
---------- ---------- ----------
Total segments 30,461 31,582 32,142
Eliminations of intersegment net
revenue and other (792) (889) (953)
---------- ---------- ----------
Total HP consolidated net revenue $ 29,669 $ 30,693 $ 31,189
========== ========== ==========
Earnings before taxes:(a)
Personal Systems Group $ 409 $ 524 $ 567
Services 959 997 1,240
Imaging and Printing Group 949 808 879
Enterprise Servers, Storage and
Networking 562 585 690
Software 175 172 160
HP Financial Services 97 96 88
Corporate Investments (58) (49) (334)
---------- ---------- ----------
Total segment earnings from
operations 3,093 3,133 3,290
Corporate and unallocated costs and
eliminations (314) (203) (114)
Unallocated costs related to stock-
based compensation expense (150) (168) (130)
Amortization of purchased intangible
assets (476) (470) (358)
Impairment of goodwill and purchased
intangible assets (9,188) - -
Restructuring charges (1,795) (53) (150)
Acquisition-related charges (3) (17) (18)
Interest and other, net (224) (243) (121)
---------- ---------- ----------
Total HP consolidated (loss) earnings
before taxes $ (9,057) $ 1,979 $ 2,399
========== ========== ==========
(a) Certain fiscal 2012 organizational reclassifications have been
reflected retroactively to provide improved visibility and
comparability. For each of the quarters in fiscal year 2011, the
reclassifications resulted in the transfer of revenue and operating
profit among the Services, Imaging and Printing Group, Enterprise
Servers, Storage and Networking, Software and Corporate Investments
financial reporting segments. Reclassifications between segments
included the transfer of the Indigo Scitex support and the LaserJet and
enterprise solutions trade support businesses from Services to the
Imaging and Printing Group, the transfer of the business intelligence
services business from Corporate Investments to Services, the transfer
of the information management services business from Software to
Services, and the transfer of the TippingPoint business from Enterprise
Servers, Storage and Networking to Software. There was no impact on the
previously reported financial results for the Personal Systems Group
and HP Financial Services segments.
HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
SEGMENT INFORMATION
(Unaudited)
(In millions)
Nine months ended
July 31,
----------------------
2012 2011
---------- ----------
Net revenue:(a)
Personal Systems Group $ 26,945 $ 29,456
Services 26,211 26,475
Imaging and Printing Group 18,407 19,757
Enterprise Servers, Storage and Networking 15,372 16,463
Software 2,889 2,344
HP Financial Services 2,853 2,644
Corporate Investments 95 339
---------- ----------
Total Segments 92,772 97,478
Eliminations of intersegment net revenue and other (2,374) (2,355)
---------- ----------
Total HP consolidated net revenue $ 90,398 $ 95,123
========== ==========
Earnings before taxes:(a)
Personal Systems Group $ 1,397 $ 1,772
Services 2,861 3,993
Imaging and Printing Group 2,518 3,134
Enterprise Servers, Storage and Networking 1,709 2,280
Software 509 438
HP Financial Services 284 250
Corporate Investments (155) (711)
---------- ----------
Total segment earnings from operations 9,123 11,156
Corporate and unallocated costs and eliminations (670) (118)
Unallocated costs related to stock-based
compensation expense (492) (426)
Amortization of purchased intangible assets (1,412) (1,196)
Impairment of goodwill and purchased intangible
assets (9,188) -
Restructuring charges (1,888) (466)
Acquisition-related charges (42) (68)
Interest and other, net (688) (294)
---------- ----------
Total HP consolidated (loss) earnings before
taxes $ (5,257) $ 8,588
========== ==========
(a) Certain fiscal 2012 organizational reclassifications have been
reflected retroactively to provide improved visibility and
comparability. For each of the quarters in fiscal year 2011, the
reclassifications resulted in the transfer of revenue and operating
profit among the Services, Imaging and Printing Group, Enterprise
Servers, Storage and Networking, Software and Corporate Investments
financial reporting segments. Reclassifications between segments
included the transfer of the Indigo Scitex support and the LaserJet and
enterprise solutions trade support businesses from Services to the
Imaging and Printing Group, the transfer of the business intelligence
services business from Corporate Investments to Services, the transfer
of the information management services business from Software to
Services, and the transfer of the TippingPoint business from Enterprise
Servers, Storage and Networking to Software. There was no impact on the
previously reported financial results for the Personal Systems Group
and HP Financial Services segments.
HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
SEGMENT / BUSINESS UNIT INFORMATION
(Unaudited)
(In millions)
Growth rate
Three months ended (%)
----------------------------- -------------
July 31, April 30, July 31,
2012 2012 2011 Q/Q Y/Y
-------- --------- -------- ----- -----
Net revenue:(a)
Personal Systems Group
Notebooks $ 4,416 $ 4,900 $ 5,082 (10%) (13%)
Desktops 3,486 3,827 3,777 (9%) (8%)
Workstations 526 537 547 (2%) (4%)
Other 192 188 186 2% 3%
-------- --------- --------
Total Personal Systems
Group 8,620 9,452 9,592 (9%) (10%)
-------- --------- --------
Services
Infrastructure Technology
Outsourcing 3,665 3,669 3,899 0% (6%)
Technology Services 2,634 2,638 2,671 0% (1%)
Application and Business
Services(b) 2,455 2,524 2,460 (3%) 0%
-------- --------- --------
Total Services 8,754 8,831 9,030 (1%) (3%)
-------- --------- --------
Imaging and Printing Group
Supplies 4,005 4,060 4,143 (1%) (3%)
Commercial Hardware 1,445 1,479 1,388 (2%) 4%
Consumer Hardware 567 593 652 (4%) (13%)
-------- --------- --------
Total Imaging and
Printing Group 6,017 6,132 6,183 (2%) (3%)
-------- --------- --------
Enterprise Servers, Storage
and Networking
Industry Standard Servers 3,187 3,186 3,302 0% (3%)
Storage 924 990 976 (7%) (5%)
Business Critical Systems 385 421 459 (9%) (16%)
Networking 647 614 611 5% 6%
-------- --------- --------
Total Enterprise
Servers, Storage and
Networking 5,143 5,211 5,348 (1%) (4%)
-------- --------- --------
Software 973 970 822 0% 18%
-------- --------- --------
HP Financial Services 935 968 932 (3%) 0%
-------- --------- --------
Corporate Investments 19 18 235 6% (92%)
-------- --------- --------
Total segments 30,461 31,582 32,142 (4%) (5%)
-------- --------- --------
Elimination of intersegment
net revenue and other (792) (889) (953) (11%) (17%)
-------- --------- --------
Total HP consolidated net
revenue $ 29,669 $ 30,693 $ 31,189 (3%) (5%)
======== ========= ========
(a) Certain fiscal 2012 organizational reclassifications have been
reflected retroactively to provide improved visibility and
comparability. For each of the quarters in fiscal year 2011, the
reclassifications resulted in the transfer of revenue among the
Services, Imaging and Printing Group, Enterprise Servers, Storage and
Networking, Software and Corporate Investments financial reporting
segments. Reclassifications between segments included the transfer of
Indigo Scitex support and the LaserJet and enterprise solutions trade
support businesses from Services to the Imaging and Printing Group, the
transfer of the business intelligence services business from Corporate
Investments to Services, the transfer of the information management
services business from Software to Services, and the transfer of the
TippingPoint business from Enterprise Servers, Storage and Networking
to Software. In addition, revenue was transferred among the business
units within the Services segment. There was no impact on the
previously reported financial results for the Personal Systems Group
and HP Financial Services segments.
(b) The former Application Services, Business Process Outsourcing and Other
Services business units were consolidated into a new Application and
Business Services business unit in fiscal 2012.
HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
SEGMENT / BUSINESS UNIT INFORMATION
(Unaudited)
(In millions)
Nine months ended
July 31,
------------------------
2012 2011
----------- -----------
Net revenue:(a)
Personal Systems Group
Notebooks $ 14,258 $ 15,929
Desktops 10,519 11,314
Workstations 1,598 1,623
Other 570 590
----------- -----------
Total Personal Systems Group 26,945 29,456
----------- -----------
Services
Infrastructure Technology Outsourcing 11,035 11,329
Technology Services 7,834 7,814
Application and Business Services(b) 7,342 7,332
----------- -----------
Total Services 26,211 26,475
----------- -----------
Imaging and Printing Group
Supplies 12,144 13,113
Commercial Hardware 4,413 4,489
Consumer Hardware 1,850 2,155
----------- -----------
Total Imaging and Printing Group 18,407 19,757
----------- -----------
Enterprise Servers, Storage and Networking
Industry Standard Servers 9,445 10,137
Storage 2,869 2,968
Business Critical Systems 1,211 1,560
Networking 1,847 1,798
----------- -----------
Total Enterprise Servers, Storage and
Networking 15,372 16,463
----------- -----------
Software 2,889 2,344
----------- -----------
HP Financial Services 2,853 2,644
----------- -----------
Corporate Investments 95 339
----------- -----------
Total segments 92,772 97,478
----------- -----------
Elimination of intersegment net revenue and other (2,374) (2,355)
----------- -----------
Total HP consolidated net revenue $ 90,398 $ 95,123
=========== ===========
(a) Certain fiscal 2012 organizational reclassifications have been
reflected retroactively to provide improved visibility and
comparability. For each of the quarters in fiscal year 2011, the
reclassifications resulted in the transfer of revenue among the
Services, Imaging and Printing Group, Enterprise Servers, Storage and
Networking, Software and Corporate Investments financial reporting
segments. Reclassifications between segments included the transfer of
Indigo Scitex support and the LaserJet and enterprise solutions trade
support businesses from Services to the Imaging and Printing Group, the
transfer of the business intelligence services business from Corporate
Investments to Services, the transfer of the information management
services business from Software to Services, and the transfer of the
TippingPoint business from Enterprise Servers, Storage and Networking
to Software. In addition, revenue was transferred among the business
units within the Services segment. There was no impact on the
previously reported financial results for the Personal Systems Group
and HP Financial Services segments.
(b) The former Application Services, Business Process Outsourcing and Other
Services business units were consolidated into a new Application and
Business Services business unit in fiscal 2012.
HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
SEGMENT NON-GAAP OPERATING MARGIN SUMMARY DATA
(Unaudited)
(In millions)
Three months Change in Operating
ended Margin (pts)
------------- -------------------------
July 31,
2012 Q/Q Y/Y
------------- --------- -------------
Non-GAAP operating margin:(a)
Personal Systems Group 4.7% (0.8 pts) (1.2 pts)
Services 11.0% (0.3 pts) (2.7 pts)
Imaging and Printing Group 15.8% 2.6 pts 1.6 pts
Enterprise Servers, Storage and
Networking 10.9% (0.3 pts) (2.0 pts)
Software 18.0% 0.3 pts (1.5 pts)
HP Financial Services 10.4% 0.5 pts 1.0 pts
Corporate Investments (357.9%) 114.3 pts (215.8 pts)
Total segments 10.1% 0.3 pts (0.1 pts)
Total HP consolidated non-
GAAP operating margin 9.2% 0.3 pts (0.6 pts)
(a) Certain fiscal 2012 organizational reclassifications have been
reflected retroactively to provide improved visibility and
comparability. For each of the quarters in fiscal year 2011, the
reclassifications resulted in the transfer of revenue and operating
profit among the Services, Imaging and Printing Group, Enterprise
Servers, Storage and Networking, Software and Corporate Investments
financial reporting segments. Reclassifications between segments
included the transfer of Indigo Scitex support and the LaserJet and
enterprise solutions trade support businesses from Services to the
Imaging and Printing Group, the transfer of the business intelligence
services business from Corporate Investments to Services, the transfer
of the information management services business from Software to
Services, and the transfer of the TippingPoint business from Enterprise
Servers, Storage and Networking to Software. There was no impact on the
previously reported financial results for the Personal Systems Group
and HP Financial Services segments.
HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
CALCULATION OF NET EARNINGS PER SHARE
(Unaudited)
(In millions except per share amounts)
Three months ended
---------------------------------
July 31, April 30, July 31,
2012 2012 2011
---------- ---------- ----------
Numerator:
GAAP net (loss) earnings $ (8,857) $ 1,593 $ 1,926
========== ========== ==========
Non-GAAP net earnings $ 1,973 $ 1,949 $ 2,282
========== ========== ==========
Denominator:
Weighted-average shares used to compute
basic net (loss) earnings per share and
diluted net (loss) per share 1,971 1,979 2,054
Dilutive effect of employee stock plans 4 8 26
---------- ---------- ----------
Weighted-average shares used to compute
diluted net earnings per share 1,975 1,987 2,080
========== ========== ==========
GAAP net (loss) earnings per share:
Basic $ (4.49) $ 0.80 $ 0.94
Diluted(a) $ (4.49) $ 0.80 $ 0.93
Non-GAAP net earnings per share:
Basic $ 1.00 $ 0.98 $ 1.11
Diluted(b) $ 1.00 $ 0.98 $ 1.10
(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)
Nine months ended
July 31,
------------------------
2012 2011
----------- -----------
Numerator:
GAAP net (loss) earnings $ (5,796) $ 6,835
=========== ===========
Non-GAAP net earnings $ 5,754 $ 8,029
=========== ===========
Denominator:
Weighted-average shares used to compute basic net
(loss) earnings per share and diluted net (loss)
per share 1,977 2,129
Dilutive effect of employee stock plans 15 32
----------- -----------
Weighted-average shares used to compute diluted
net earnings per share 1,992 2,161
=========== ===========
GAAP net (loss) earnings per share:
Basic $ (2.93) $ 3.21
Diluted(a) $ (2.93) $ 3.16
Non-GAAP net earnings per share:
Basic $ 2.91 $ 3.77
Diluted(b) $ 2.89 $ 3.72
(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.
HP Reports Third Quarter 2012 Results
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