HP INC - FORM 8-K - EX-99.2 - EXHIBIT 99.2 - May 17, 2011

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8-K - Q211 FORM 8-K - HP INCq2form8-k_0511.htm
EX-99.1 - EXHIBIT 99.1 - HP INCq2ex99-1_0511.htm
 
 
EXHIBIT 99.2
 
 
 
HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS
(Unaudited)
(In millions except per share amounts)
                   
                   
    Three months ended
   
April 30,
2011
  
January 31,
2011
  
April 30,
2010
                   
Net revenue
   $ 31,632     $ 32,302     $ 30,849  
                         
Costs and Expenses: (a)
                        
            Cost of sales
     23,860       24,408       23,569  
            Research and development
     815       798       722  
            Selling, general and administrative
     3,397       3,090       3,096  
            Amortization of purchased intangible assets
     413       425       347  
            Restructuring charges
     158       158       180  
            Acquisition-related charges
     21       29       77  
                        Total costs and expenses
     28,664       28,908       27,991  
                         
Earnings from operations
     2,968       3,394       2,858  
                         
Interest and other, net
     (76 )     (97 )     (91 )
                         
Earnings before taxes
     2,892       3,297       2,767  
                         
Provision for taxes
     588       692       567  
                         
Net earnings
   $ 2,304     $ 2,605     $ 2,200  
                         
Net earnings per share:
                        
            Basic
   $ 1.07     $ 1.19     $ 0.94  
            Diluted
   $ 1.05     $ 1.17     $ 0.91  
                         
                         
Cash dividends declared per share
   $ -     $ 0.16     $ -  
                         
Weighted-average shares used to compute net earnings per share:
          
            Basic
     2,150       2,182       2,345  
            Diluted
     2,184       2,226       2,406  
                         
(a)
 In connection with organizational realignments implemented in the first quarter of fiscal 2011, certain costs previously reported as Cost of Sales have been reclassified as Selling, General and Administrative expenses to better align those costs with the functional areas that benefit from those expenditures.

 
1/5
 
 
 
HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS
(Unaudited)
(In millions except per share amounts)
             
       
   
Six months ended
April 30,
   
2011
  
2010
             
Net revenue
   $ 63,934     $ 62,026  
                 
Costs and expenses: (a)
                
            Cost of sales
     48,268       47,596  
            Research and development
     1,613       1,403  
            Selling, general and administrative
     6,487       6,063  
            Amortization of purchased intangible assets
     838       677  
            Restructuring charges
     316       311  
            Acquisition-related charges
     50       115  
                        Total costs and expenses
     57,572       56,165  
                 
Earnings from operations
     6,362       5,861  
                 
Interest and other, net
     (173 )     (290 )
                 
Earnings before taxes
     6,189       5,571  
                 
Provision for taxes
     1,280       1,121  
                 
Net earnings
   $ 4,909     $ 4,450  
                 
Net earnings per share:
                
            Basic
   $ 2.27     $ 1.89  
            Diluted
   $ 2.23     $ 1.84  
                 
                 
Cash dividends declared per share
   $ 0.16     $ 0.16  
                 
Weighted-average shares used to compute net earnings per share:
          
            Basic
     2,166       2,352  
            Diluted
     2,203       2,412  
                 
(a) 
In connection with organizational realignments implemented in the first quarter of fiscal 2011, certain costs previously reported as Cost of Sales have been reclassified as Selling, General and Administrative expenses to better align those costs with the functional areas that benefit from those expenditures.

 
2/5
 
 
 
HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(In millions)
             
             
   
April 30,
2011
  
October 31,
2010
   
(unaudited)
        
ASSETS
            
             
Current assets:
            
            Cash and cash equivalents
   $ 12,738     $ 10,929  
            Accounts receivable
     18,621       18,481  
            Financing receivables
     3,179       2,986  
            Inventory
     6,778       6,466  
            Other current assets
     14,759       15,322  
                 
                        Total current assets
     56,075       54,184  
                 
Property, plant and equipment
     11,890       11,763  
                 
Long-term financing receivables and other assets
     11,320       12,225  
                 
Goodwill and purchased intangible assets
     45,842       46,331  
                 
Total assets
   $ 125,127     $ 124,503  
                 
                 
LIABILITIES AND STOCKHOLDERS' EQUITY
                
                 
Current liabilities:
                
            Notes payable and short-term borrowings
   $ 8,406     $ 7,046  
            Accounts payable
     14,222       14,365  
            Employee compensation and benefits
     3,563       4,256  
            Taxes on earnings
     848       802  
            Deferred revenue
     7,397       6,727  
            Other accrued liabilities
     16,934       16,207  
                 
                        Total current liabilities
     51,370       49,403  
                 
Long-term debt
     14,512       15,258  
Other liabilities
     17,450       19,061  
                 
Stockholders' equity:
                
            HP stockholders' equity
     41,423       40,449  
            Non-controlling interests
     372       332  
                 
                        Total stockholders' equity
     41,795       40,781  
                 
Total liabilities and stockholders' equity
   $ 125,127     $ 124,503  

 
3/5
 
 
  
HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
SEGMENT INFORMATION
(Unaudited)
(In millions)
                   
                   
    Three months ended
   
April 30,
2011
  
January 31,
2011
  
April 30,
2010
                   
Net revenue: (a)
                  
                   
            Services
   $ 8,977     $ 8,607     $ 8,842  
            Enterprise Servers, Storage and Networking
     5,556       5,634       4,837  
            HP Software
     764       697       653  
                        HP Enterprise Business
     15,297       14,938       14,332  
            Personal Systems Group
     9,415       10,449       9,956  
            Imaging and Printing Group
     6,745       6,630       6,396  
            HP Financial Services
     885       827       755  
            Corporate Investments
     72       78       66  
                        Total Segments
     32,414       32,922       31,505  
            Eliminations of intersegment net revenue and other
  (782
 )     (620 )     (656 )
                         
                        Total HP Consolidated Net Revenue
   $ 31,632     $ 32,302     $ 30,849  
                         
Earnings from operations: (a)
                        
                         
            Services
   $ 1,361     $ 1,375     $ 1,401  
            Enterprise Servers, Storage and Networking
     766       828       624  
            HP Software
     154       123       167  
                        HP Enterprise Business
     2,281       2,326       2,192  
            Personal Systems Group
     533       672       465  
            Imaging and Printing Group
     1,144       1,129       1,098  
            HP Financial Services
     83       79       69  
            Corporate Investments
     (198 )     (183 )     (65 )
                        Total Segments
     3,843       4,023       3,759  
                         
            Corporate and unallocated costs and eliminations
  (153
 )     149       (112 )
            Unallocated costs related to stock-based compensation expense
  (130
 )     (166 )     (185 )
             Amortization of purchased intangible assets
     (413 )     (425 )     (347 )
             Restructuring charges
     (158 )     (158 )     (180 )
             Acquisition-related charges
     (21 )     (29 )     (77 )
             Interest and other, net
     (76 )     (97 )     (91 )
 
                        
Total HP Consolidated Earnings Before Taxes
   $ 2,892     $ 3,297     $ 2,767  
 
(a) Certain fiscal 2011 organizational reclassifications have been reflected retroactively to provide improved visibility and comparability. For each of the quarters in fiscal year 2010, the reclassifications resulted in the transfer of revenue and operating profit among the Enterprise Servers, Storage and Networking, Services, HP Software and Corporate Investments financial reporting segments. Reclassifications between segments included the transfer of the networking business from Corporate Investments to Enterprise Servers, Storage and Networking, the transfer of the communications and media solutions business from HP Software to Services, and the transfer of the business intelligence business from HP Software to Corporate Investments. There was no impact on the previously reported financial results for the Personal Systems Group, HP Financial Services and Imaging and Printing Group segments.

 
4/5
 
 
 
HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
SEGMENT INFORMATION
(Unaudited)
(In millions)
             
       
   
Six months ended
April 30,
   
2011
  
2010
             
Net revenue: (a)
            
             
            Services
   $ 17,584     $ 17,632  
            Enterprise Servers, Storage and Networking
     11,190       9,447  
            HP Software
     1,461       1,316  
                        HP Enterprise Business
     30,235       28,395  
            Personal Systems Group
     19,864       20,540  
            Imaging and Printing Group
     13,375       12,602  
            HP Financial Services
     1,712       1,474  
            Corporate Investments
     150       126  
                        Total Segments
     65,336       63,137  
            Eliminations of intersegment net revenue and other
     (1,402 )     (1,111 )
                 
                        Total HP Consolidated Net Revenue
   $ 63,934     $ 62,026  
                 
Earnings from operations: (a)
                
                 
            Services
   $ 2,736     $ 2,780  
            Enterprise Servers, Storage and Networking
     1,594       1,231  
            HP Software
     277       339  
                        HP Enterprise Business
     4,607       4,350  
            Personal Systems Group
     1,205       995  
            Imaging and Printing Group
     2,273       2,152  
            HP Financial Services
     162       136  
            Corporate Investments
     (381 )     (121 )
                        Total Segments
     7,866       7,512  
                 
            Corporate and unallocated costs and eliminations
     (4 )     (200 )
            Unallocated costs related to stock-based compensation expense
     (296 )     (348 )
            Amortization of purchased intangible assets
     (838 )     (677 )
            Restructuring charges
     (316 )     (311 )
            Acquisition-related charges
     (50 )     (115 )
            Interest and other, net
     (173 )     (290 )
 
                
Total HP Consolidated Earnings Before Taxes
   $ 6,189     $ 5,571  
 
(a)
Certain fiscal 2011 organizational reclassifications have been reflected retroactively to provide improved visibility and comparability. For each of the quarters in fiscal year 2010, the reclassifications resulted in the transfer of revenue and operating profit among the Enterprise Servers, Storage and Networking, Services, HP Software and Corporate Investments financial reporting segments.  Reclassifications between segments included the transfer of the networking business from Corporate Investments to Enterprise Servers, Storage and Networking, the transfer of the communications and media solutions business from HP Software to Services, and the transfer of the business intelligence business from HP Software to Corporate Investments.  There was no impact on the previously reported financial results for the Personal Systems Group, HP Financial Services and Imaging and Printing Group segments.

 
5/5
 
 
 

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