HP's Q2 FY12 earnings conference call is accessible via an audio webcast at www.hp.com/investor/2012q2webcast.
About HP
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printing,
personal computing,
software,
services and
IT infrastructure to solve customer problems. 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 GAAP basis, HP provides non-GAAP net revenue, non-GAAP operating profit, non-GAAP operating margin, non-GAAP net earnings, non-GAAP diluted earnings per share, gross cash and free cash flow. HP also provides forecasts of non-GAAP diluted earnings per share. A reconciliation of the adjustments to GAAP results for this quarter and prior periods is included in the tables below. In addition, an explanation of the ways in which HP management uses these non-GAAP measures to evaluate its business, the substance behind HP 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 management compensates for those limitations, and the substantive reasons why HP 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 earnings per share, cash and cash equivalents or cash flow from operations 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, earnings, earnings per share, tax provisions, cash flows, benefit obligations, share repurchases, currency exchange rates, the impact of acquisitions or other financial items; any projections of the amount, timing or impact of cost savings, restructuring charges, early retirement programs, workforce reductions or impairment 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 impact of macroeconomic and geopolitical trends and events; the competitive pressures faced by HP's businesses; 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 protection of HP's intellectual property assets, including intellectual property licensed from third parties; integration and other risks associated with business combination and investment transactions; the hiring and retention of key employees; assumptions related to pension and other post-retirement costs and retirement programs; 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, 2011 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, 2012. 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 Form 10-Q for the fiscal quarter ended April 30, 2012. In particular, determining HP's actual tax balances and provisions as of April 30, 2012 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 Form 10-Q. 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, January 31, April 30,
2012 2012 2011
----------- ----------- -----------
Net revenue $ 30,693 $ 30,036 $ 31,632
Costs and Expenses:(a)
Cost of sales 23,541 23,313 23,832
Research and development 850 786 815
Selling, general and administrative 3,540 3,367 3,425
Amortization of purchased
intangible assets 470 466 413
Restructuring charges 53 40 158
Acquisition-related charges 17 22 21
----------- ----------- -----------
Total costs and expenses 28,471 27,994 28,664
----------- ----------- -----------
Earnings from operations 2,222 2,042 2,968
Interest and other, net (243) (221) (76)
----------- ----------- -----------
Earnings before taxes 1,979 1,821 2,892
Provision for taxes 386 353 588
----------- ----------- -----------
Net earnings $ 1,593 $ 1,468 $ 2,304
=========== =========== ===========
Net earnings per share:
Basic $ 0.80 $ 0.74 $ 1.07
Diluted $ 0.80 $ 0.73 $ 1.05
Cash dividends declared per share $ - $ 0.24 $ -
Weighted-average shares used to
compute net earnings per share:
Basic 1,979 1,981 2,150
Diluted 1,987 1,998 2,184
(a) In connection with organizational realignments implemented in the first
quarter of fiscal year 2012, certain costs previously reported as Cost
of Sales have been reclassified as Selling, General and Administrative
expenses to better align those costs with the functional areas that
benefit from those expenditures.
HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS
(Unaudited)
(In millions except per share amounts)
Six months ended
------------------------
April 30,
------------------------
2012 2011
----------- -----------
Net revenue $ 60,729 $ 63,934
Costs and expenses:(a)
Cost of sales 46,854 48,213
Research and development 1,636 1,613
Selling, general and administrative 6,907 6,542
Amortization of purchased intangible assets 936 838
Restructuring charges 93 316
Acquisition-related charges 39 50
----------- -----------
Total costs and expenses 56,465 57,572
----------- -----------
Earnings from operations 4,264 6,362
Interest and other, net (464) (173)
----------- -----------
Earnings before taxes 3,800 6,189
Provision for taxes 739 1,280
----------- -----------
Net earnings $ 3,061 $ 4,909
=========== ===========
Net earnings per share:
Basic $ 1.55 $ 2.27
Diluted $ 1.53 $ 2.23
Cash dividends declared per share $ 0.24 $ 0.16
Weighted-average shares used to compute net
earnings per share:
Basic 1,980 2,166
Diluted 1,995 2,203
(a) In connection with organizational realignments implemented in the first
quarter of fiscal year 2012, certain costs previously reported as Cost
of Sales have been reclassified as Selling, General and Administrative
expenses to better align those costs with the functional areas that
benefit from those expenditures.
HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
ADJUSTMENTS TO GAAP NET EARNINGS, EARNINGS FROM OPERATIONS,
OPERATING MARGIN AND EARNINGS PER SHARE
(Unaudited)
(In millions except per share amounts)
Three Three Three
months months months
ended Diluted ended Diluted ended Diluted
April earnings January earnings April earnings
30, per 31, per 30, per
2012 share 2012 share 2011 share
------- -------- ------- -------- ------- --------
GAAP net earnings $ 1,593 $ 0.80 $ 1,468 $ 0.73 $ 2,304 $ 1.05
Non-GAAP
adjustments:
Amortization of
purchased
intangible
assets 470 0.23 466 0.24 413 0.19
Restructuring
charges 53 0.03 40 0.02 158 0.07
Acquisition-
related charges 17 0.01 22 0.01 21 0.01
Wind down of the
webOS device
business(a) (36) (0.02) - - - -
Adjustments for
taxes (148) (0.07) (164) (0.08) (179) (0.08)
------- -------- ------- -------- ------- --------
Non-GAAP net
earnings $ 1,949 $ 0.98 $ 1,832 $ 0.92 $ 2,717 $ 1.24
======= ======== ======= ======== ======= ========
GAAP earnings from
operations $ 2,222 $ 2,042 $ 2,968
Non-GAAP
adjustments:
Amortization of
purchased
intangible
assets 470 466 413
Restructuring
charges 53 40 158
Acquisition-
related charges 17 22 21
Wind down of the
webOS device
business(a) (36) - -
------- ------- -------
Non-GAAP earnings
from operations $ 2,726 $ 2,570 $ 3,560
======= ======= =======
GAAP operating
margin 7% 7% 9%
Non-GAAP
adjustments 2% 2% 2%
------- ------- -------
Non-GAAP operating
margin 9% 9% 11%
======= ======= =======
(a) Primarily includes adjustments to expenses for supplier-related
obligations related to winding down the webOS device business.
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)
Six months Six months
ended Diluted ended Diluted
April 30, earnings April 30, earnings
2012 per share 2011 per share
---------- ---------- ---------- ----------
GAAP net earnings $ 3,061 $ 1.53 $ 4,909 $ 2.23
Non-GAAP adjustments:
Amortization of purchased
intangible assets 936 0.47 838 0.39
Restructuring charges 93 0.05 316 0.14
Acquisition-related
charges 39 0.02 50 0.02
Wind down of the webOS
device business(a) (36) (0.02) - -
Adjustments for taxes (312) (0.15) (366) (0.17)
---------- ---------- ---------- ----------
Non-GAAP net earnings $ 3,781 $ 1.90 $ 5,747 $ 2.61
========== ========== ========== ==========
GAAP earnings from
operations $ 4,264 $ 6,362
Non-GAAP adjustments:
Amortization of purchased
intangible assets 936 838
Restructuring charges 93 316
Acquisition-related
charges 39 50
Wind down of the webOS
device business(a) (36) -
---------- ----------
Non-GAAP earnings from
operations $ 5,296 $ 7,566
========== ==========
GAAP operating margin 7% 10%
Non-GAAP adjustments 2% 2%
---------- ----------
Non-GAAP operating margin 9% 12%
========== ==========
(a) Primarily includes adjustments to expenses for supplier-related
obligations related to winding down the webOS device business.
HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(In millions)
April 30, October 31,
2012 2011
----------- -----------
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 8,311 $ 8,043
Accounts receivable 16,609 18,224
Financing receivables 3,139 3,162
Inventory 7,306 7,490
Other current assets 14,324 14,102
----------- -----------
Total current assets 49,689 51,021
----------- -----------
Property, plant and equipment 12,236 12,292
Long-term financing receivables and other assets 11,018 10,755
Goodwill and purchased intangible assets 54,746 55,449
----------- -----------
Total assets $ 127,689 $ 129,517
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable and short-term borrowings $ 4,252 $ 8,083
Accounts payable 12,900 14,750
Employee compensation and benefits 3,609 3,999
Taxes on earnings 871 1,048
Deferred revenue 7,582 7,449
Other accrued liabilities 13,585 15,113
----------- -----------
Total current liabilities 42,799 50,442
----------- -----------
Long-term debt 25,825 22,551
Other liabilities 17,368 17,520
Stockholders' equity:
HP stockholders' equity 41,288 38,625
Non-controlling interests 409 379
----------- -----------
Total stockholders' equity 41,697 39,004
----------- -----------
Total liabilities and stockholders' equity $ 127,689 $ 129,517
=========== ===========
HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
(In millions)
Three months Six months
ended ended
April 30, April 30,
2012 2012
------------ ------------
Cash flows from operating activities:
Net earnings $ 1,593 $ 3,061
Adjustments to reconcile net earnings to net
cash provided by operating activities:
Depreciation and amortization 1,285 2,588
Stock-based compensation expense 169 344
Provision for bad debt and inventory 95 147
Restructuring charges 53 93
Deferred taxes on earnings (45) (155)
Excess tax benefit from stock-based
compensation (1) (12)
Other, net 196 240
Changes in operating assets and liabilities:
Accounts and financing receivables (832) 1,479
Inventory (91) 89
Accounts payable 525 (1,851)
Taxes on earnings (42) (54)
Restructuring (100) (274)
Other assets and liabilities (332) (2,029)
------------ ------------
Net cash provided by operating
activities 2,473 3,666
------------ ------------
Cash flows from investing activities:
Investment in property, plant and equipment (1,080) (1,963)
Proceeds from sale of property, plant and
equipment 128 224
Purchases of available-for-sale securities
and other investments (565) (565)
Maturities and sales of available-for-sale
securities and other investments 250 346
Payments made in connection with business
acquisitions, net of cash acquired - (141)
Proceeds from business divestiture, net - 81
------------ ------------
Net cash used in investing activities (1,267) (2,018)
------------ ------------
Cash flows from financing activities:
Repayment of commercial paper and notes
payable, net (185) (2,792)
Issuance of debt 2,017 5,052
Payment of debt (2,561) (2,661)
Issuance of common stock under employee
stock plans 321 634
Repurchase of common stock (350) (1,130)
Excess tax benefit from stock-based
compensation 1 12
Cash dividends paid (251) (495)
------------ ------------
Net cash used in financing activities (1,008) (1,380)
------------ ------------
Increase in cash and cash equivalents 198 268
Cash and cash equivalents at beginning of period 8,113 8,043
------------ ------------
Cash and cash equivalents at end of period $ 8,311 $ 8,311
============ ============
HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
SEGMENT INFORMATION
(Unaudited)
(In millions)
Three months ended
-------------------------------------
April 30, January 31, April 30,
2012 2012 2011
----------- ----------- -----------
Net revenue:(a)
Personal Systems Group $ 9,452 $ 8,873 $ 9,415
Services 8,831 8,626 8,916
Imaging and Printing Group 6,132 6,258 6,843
Enterprise Servers, Storage and
Networking 5,211 5,018 5,516
Software 970 946 797
HP Financial Services 968 950 885
Corporate Investments 18 58 42
----------- ----------- -----------
Total segments 31,582 30,729 32,414
Eliminations of intersegment net
revenue and other (889) (693) (782)
----------- ----------- -----------
Total HP consolidated net revenue $ 30,693 $ 30,036 $ 31,632
=========== =========== ===========
Earnings before taxes:(a)
Personal Systems Group $ 524 $ 464 $ 533
Services 997 905 1,372
Imaging and Printing Group 808 761 1,136
Enterprise Servers, Storage and
Networking 585 562 760
Software 172 162 158
HP Financial Services 96 91 83
Corporate Investments (49) (48) (199)
----------- ----------- -----------
Total segment earnings from
operations 3,133 2,897 3,843
Corporate and unallocated costs and
eliminations (203) (153) (153)
Unallocated costs related to stock-
based compensation expense (168) (174) (130)
Amortization of purchased
intangible assets (470) (466) (413)
Restructuring charges (53) (40) (158)
Acquisition-related charges (17) (22) (21)
Interest and other, net (243) (221) (76)
----------- ----------- -----------
Total HP consolidated earnings
before taxes $ 1,979 $ 1,821 $ 2,892
=========== =========== ===========
(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)
Six months ended
April 30,
------------------------
2012 2011
----------- -----------
Net revenue:(a)
Personal Systems Group $ 18,325 $ 19,864
Services 17,457 17,445
Imaging and Printing Group 12,390 13,574
Enterprise Servers, Storage and Networking 10,229 11,115
Software 1,916 1,522
HP Financial Services 1,918 1,712
Corporate Investments 76 104
----------- -----------
Total Segments 62,311 65,336
Eliminations of intersegment net revenue and
other (1,582) (1,402)
----------- -----------
Total HP consolidated net revenue $ 60,729 $ 63,934
=========== ===========
Earnings before taxes:(a)
Personal Systems Group $ 988 $ 1,205
Services 1,902 2,753
Imaging and Printing Group 1,569 2,255
Enterprise Servers, Storage and Networking 1,147 1,590
Software 334 278
HP Financial Services 187 162
Corporate Investments (97) (377)
----------- -----------
Total segment earnings from operations 6,030 7,866
Corporate and unallocated costs and eliminations (356) (4)
Unallocated costs related to stock-based
compensation expense (342) (296)
Amortization of purchased intangible assets (936) (838)
Restructuring charges (93) (316)
Acquisition-related charges (39) (50)
Interest and other, net (464) (173)
----------- -----------
Total HP consolidated earnings before taxes $ 3,800 $ 6,189
=========== ===========
(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 (%)
------------------------------------- -----------
April 30, January 31, April 30,
2012 2012 2011 Q/Q Y/Y
----------- ----------- ----------- ---- ----
Net revenue:(a)
Personal Systems
Group
Notebooks $ 4,900 $ 4,942 $ 5,039 (1%) (3%)
Desktops 3,827 3,206 3,641 19% 5%
Workstations 537 535 541 0% (1%)
Other 188 190 194 (1%) (3%)
----------- ----------- -----------
Total Personal
Systems Group 9,452 8,873 9,415 7% 0%
----------- ----------- -----------
Services
Infrastructure
Technology
Outsourcing 3,669 3,701 3,786 (1%) (3%)
Technology Services 2,638 2,562 2,629 3% 0%
Application and
Business
Services(b) 2,524 2,363 2,501 7% 1%
----------- ----------- -----------
Total Services 8,831 8,626 8,916 2% (1%)
----------- ----------- -----------
Imaging and Printing
Group
Supplies 4,060 4,079 4,612 0% (12%)
Commercial Hardware 1,479 1,489 1,536 (1%) (4%)
Consumer Hardware 593 690 695 (14%) (15%)
----------- ----------- -----------
Total Imaging and
Printing Group 6,132 6,258 6,843 (2%) (10%)
----------- ----------- -----------
Enterprise Servers,
Storage and
Networking
Industry Standard
Servers 3,186 3,072 3,387 4% (6%)
Storage 990 955 980 4% 1%
Business Critical
Systems 421 405 546 4% (23%)
Networking 614 586 603 5% 2%
----------- ----------- -----------
Total Enterprise
Servers, Storage
and Networking 5,211 5,018 5,516 4% (6%)
----------- ----------- -----------
Software 970 946 797 3% 22%
----------- ----------- -----------
HP Financial Services 968 950 885 2% 9%
----------- ----------- -----------
Corporate Investments 18 58 42 (69%) (57%)
----------- ----------- -----------
Total segments 31,582 30,729 32,414 3% (3%)
----------- ----------- -----------
Elimination of
intersegment net
revenue and other (889) (693) (782) 28% 14%
----------- ----------- -----------
Total HP
consolidated net
revenue $ 30,693 $ 30,036 $ 31,632 2% (3%)
=========== =========== ===========
(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)
Six months ended
April 30,
------------------------
2012 2011
----------- -----------
Net revenue:(a)
Personal Systems Group
Notebooks $ 9,842 $ 10,847
Desktops 7,033 7,537
Workstations 1,072 1,076
Other 378 404
----------- -----------
Total Personal Systems Group 18,325 19,864
----------- -----------
Services
Infrastructure Technology Outsourcing 7,370 7,430
Technology Services 5,200 5,143
Application and Business Services(b) 4,887 4,872
----------- -----------
Total Services 17,457 17,445
----------- -----------
Imaging and Printing Group
Supplies 8,139 8,970
Commercial Hardware 2,968 3,101
Consumer Hardware 1,283 1,503
----------- -----------
Total Imaging and Printing Group 12,390 13,574
----------- -----------
Enterprise Servers, Storage and Networking
Industry Standard Servers 6,258 6,835
Storage 1,945 1,992
Business Critical Systems 826 1,101
Networking 1,200 1,187
----------- -----------
Total Enterprise Servers, Storage and
Networking 10,229 11,115
----------- -----------
Software 1,916 1,522
----------- -----------
HP Financial Services 1,918 1,712
----------- -----------
Corporate Investments 76 104
----------- -----------
Total segments 62,311 65,336
----------- -----------
Elimination of intersegment net revenue and
other (1,582) (1,402)
----------- -----------
Total HP consolidated net revenue $ 60,729 $ 63,934
=========== ===========
(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)
------------ ----------------------
April 30,
2012 Q/Q Y/Y
------------ ---------- ----------
Non-GAAP operating margin:(a)
Personal Systems Group 5.5% 0.3 pts (0.2 pts)
Services 11.3% 0.8 pts (4.1 pts)
Imaging and Printing Group 13.2% 1.0 pts (3.4 pts)
Enterprise Servers, Storage and
Networking 11.2% 0.0 pts (2.6 pts)
Software 17.7% 0.6 pts (2.1 pts)
HP Financial Services 9.9% 0.3 pts 0.5 pts
Corporate Investments (472.2%) (389.4 pts) 1.6 pts
Total segments 9.8% 0.4 pts (2.1 pts)
Total HP consolidated non-GAAP
operating margin 8.9% 0.3 pts (2.4 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
-------------------------------------
April 30, January 31, April 30,
2012 2012 2011
----------- ----------- -----------
Numerator:
GAAP net earnings $ 1,593 $ 1,468 $ 2,304
=========== =========== ===========
Non-GAAP net earnings $ 1,949 $ 1,832 $ 2,717
=========== =========== ===========
Denominator:
Weighted-average shares used to
compute basic EPS 1,979 1,981 2,150
Dilutive effect of employee stock
plans 8 17 34
----------- ----------- -----------
Weighted-average shares used to
compute diluted EPS 1,987 1,998 2,184
=========== =========== ===========
GAAP net earnings per share:
Basic(a) $ 0.80 $ 0.74 $ 1.07
Diluted(c) $ 0.80 $ 0.73 $ 1.05
Non-GAAP net earnings per share:
Basic(b) $ 0.98 $ 0.92 $ 1.26
Diluted(c) $ 0.98 $ 0.92 $ 1.24
(a) GAAP basic earnings per share were calculated based on GAAP net earnings
and the weighted-average number of shares outstanding during the
reporting period.
(b) Non-GAAP basic earnings per share were calculated based on non-GAAP net
earnings and the weighted-average number of shares outstanding during
the reporting period.
(c) Diluted net earnings per share included 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)
Six months ended
April 30,
------------------------
2012 2011
----------- -----------
Numerator:
GAAP net earnings $ 3,061 $ 4,909
=========== ===========
Non-GAAP net earnings $ 3,781 $ 5,747
=========== ===========
Denominator:
Weighted-average shares used to compute basic EPS 1,980 2,166
Dilutive effect of employee stock plans 15 37
----------- -----------
Weighted-average shares used to compute diluted
EPS 1,995 2,203
=========== ===========
GAAP net earnings per share:
Basic(a) $ 1.55 $ 2.27
Diluted(c) $ 1.53 $ 2.23
Non-GAAP net earnings per share:
Basic(b) $ 1.91 $ 2.65
Diluted(c) $ 1.90 $ 2.61
(a) GAAP basic earnings per share were calculated based on GAAP net earnings
and the weighted-average number of shares outstanding during the
reporting period.
(b) Non-GAAP basic earnings per share were calculated based on non-GAAP net
earnings and the weighted-average number of shares outstanding during
the reporting period.
(c) Diluted net earnings per share included any dilutive effect of
outstanding stock options, performance-based restricted units,
restricted stock units and restricted stock.
