HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(In millions)
January 31, October 31,
2013 2012
------------ ------------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 12,589 $ 11,301
Accounts receivable 14,236 16,407
Financing receivables 3,316 3,252
Inventory 6,374 6,317
Other current assets 13,037 13,360
------------ ------------
Total current assets 49,552 50,637
------------ ------------
Property, plant and equipment 11,686 11,954
Long-term financing receivables and other assets 10,249 10,593
Goodwill and purchased intangible assets 35,214 35,584
------------ ------------
Total assets $ 106,701 $ 108,768
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable and short-term borrowings $ 6,475 $ 6,647
Accounts payable 11,660 13,350
Employee compensation and benefits 3,520 4,058
Taxes on earnings 851 846
Deferred revenue 7,603 7,494
Other accrued liabilities 14,277 14,271
------------ ------------
Total current liabilities 44,386 46,666
------------ ------------
Long-term debt 21,752 21,789
Other liabilities 17,273 17,480
Stockholders' equity:
HP stockholders' equity 22,895 22,436
Non-controlling interests 395 397
------------ ------------
Total stockholders' equity 23,290 22,833
------------ ------------
Total liabilities and stockholders' equity $ 106,701 $ 108,768
============ ============
HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
(In millions)
Three months ended
--------------------------
January 31, January 31,
2013 2012
------------ ------------
Cash flows from operating activities:
Net earnings $ 1,232 $ 1,468
Adjustments to reconcile net earnings to net
cash provided by operating activities:
Depreciation and amortization 1,163 1,303
Stock-based compensation expense 184 175
Provision for bad debt and inventory 124 52
Restructuring charges 130 40
Deferred taxes on earnings 500 (110)
Excess tax benefit from stock-based
compensation - (11)
Other, net 167 44
Changes in operating assets and liabilities:
Accounts and financing receivables 2,246 2,311
Inventory (149) 180
Accounts payable (1,690) (2,376)
Taxes on earnings (423) (12)
Restructuring (237) (174)
Other assets and liabilities (685) (1,697)
------------ ------------
Net cash provided by operating
activities 2,562 1,193
------------ ------------
Cash flows from investing activities:
Investment in property, plant and equipment (633) (883)
Proceeds from sale of property, plant and
equipment 127 96
Purchases of available-for-sale securities
and other investments (299) -
Maturities and sales of available-for-sale
securities and other investments 161 96
Payments made in connection with business
acquisitions, net of cash acquired - (141)
Proceeds from business divestiture, net - 81
------------ ------------
Net cash used in investing activities (644) (751)
------------ ------------
Cash flows from financing activities:
Repayment of commercial paper and notes
payable, net (105) (2,607)
Issuance of debt 45 3,035
Payment of debt (114) (100)
Issuance of common stock under employee
stock plans 55 313
Repurchase of common stock (253) (780)
Excess tax benefit from stock-based
compensation - 11
Cash dividends paid (258) (244)
------------ ------------
Net cash used in financing activities (630) (372)
------------ ------------
Increase in cash and cash equivalents 1,288 70
Cash and cash equivalents at beginning of period 11,301 8,043
------------ ------------
Cash and cash equivalents at end of period $ 12,589 $ 8,113
============ ============
HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
SEGMENT INFORMATION
(Unaudited)
(In millions)
Three months ended
----------------------------------------
January 31, October 31, January 31,
2013 2012 2012
------------ ------------ ------------
Net revenue:(a)
Personal Systems $ 8,204 $ 8,727 $ 8,892
Printing 5,926 6,080 6,258
------------ ------------ ------------
Total Printing and Personal
Systems Group(b) 14,130 14,807 15,150
Enterprise Group 6,984 7,459 7,282
Enterprise Services 5,919 6,352 6,371
Software 926 1,171 946
HP Financial Services 957 966 950
Corporate Investments 4 10 30
------------ ------------ ------------
Total segments 28,920 30,765 30,729
Elimination of intersegment net
revenue and other (561) (806) (693)
------------ ------------ ------------
Total HP consolidated net
revenue $ 28,359 $ 29,959 $ 30,036
============ ============ ============
Earnings before taxes:(a)
Personal Systems $ 223 $ 309 $ 459
Printing 953 1,067 761
------------ ------------ ------------
Total Printing and Personal
Systems Group(b) 1,176 1,376 1,220
Enterprise Group 1,084 1,229 1,329
Enterprise Services 76 423 145
Software 157 318 162
HP Financial Services 101 104 91
Corporate Investments (65) (78) (50)
------------ ------------ ------------
Total segment earnings from
operations 2,529 3,372 2,897
Corporate and unallocated costs
and eliminations (109) (120) (153)
Unallocated costs related to
stock-based compensation
expense (184) (140) (174)
Amortization of purchased
intangible assets (350) (372) (466)
Impairment of goodwill and
purchased intangible assets - (8,847) -
Restructuring charges (130) (378) (40)
Acquisition-related charges (4) (3) (22)
Interest and other, net (179) (188) (221)
------------ ------------ ------------
Total HP consolidated
earnings (loss) before
taxes $ 1,573 $ (6,676) $ 1,821
============ ============ ============
(a) HP has implemented certain organizational realignments. As a result of
these realignments, HP has re-evaluated its segment financial reporting
structure and, effective in the first quarter of fiscal 2013, created two
new financial reporting segments, the Enterprise Group segment and the
Enterprise Services segment, and eliminated two other financial reporting
segments, the Enterprise Servers, Storage and Networking ("ESSN") segment
and the Services segment. The Enterprise Group segment consists of the
business units within the former ESSN segment and most of the services
offerings of the Technology Services ("TS") business unit, which was
previously a part of the former Services segment. The Enterprise Services
segment consists of the Applications and Business Services ("ABS") and
Infrastructure Technology Outsourcing ("ITO") business units from the
former Services segment, along with the end-user workplace support
services business that was previously a part of the TS business unit.
Taking into account these changes, HP has the following seven financial
reporting segments: Personal Systems, Printing, the Enterprise Group,
Enterprise Services, Software, HP Financial Services and Corporate
Investments.
Also as a result of these realignments, the financial results of the
Personal Systems commercial products support business, which were
previously reported as part of the TS business unit, will now be reported
as part of the Other business unit within the Personal Systems segment,
and the financial results of the portion of the business intelligence
services business that had continued to be reported as part of the
Corporate Investments segment following the implementation of prior
realignment actions will now be reported as part of the ABS business unit.
In addition, the end-user workplace support services business, which, as
noted above, was previously a part of the TS business unit and will now
become a part of the Enterprise Services segment, will be reported as part
of the ITO business unit within that segment.
To provide improved visibility and comparability, HP has reflected these
changes to its reporting structure in prior financial reporting periods on
an as-if basis, which has resulted in the transfer of revenue and
operating profit among the Personal Systems, the Enterprise Group,
Enterprise Services and Corporate Investments segments. These changes had
no impact on the previously reported financial results for the Printing,
Software or HP Financial Services segments. In addition, none of these
changes impacted HP's previously reported consolidated net revenue,
earnings from operations, net earnings or net earnings per share.
(b) The Personal Systems segment and the Printing segment are structured
beneath a broader Printing and Personal Systems Group ("PPS"). While PPS
is not a financial reporting segment, HP provides financial data
aggregating the segments within it in order to provide a supplementary
view of its business.
HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
SEGMENT / BUSINESS UNIT INFORMATION
(Unaudited)
(In millions)
Three months ended Growth rate (%)
---------------------------- ---------------
January October January
31, 31, 31,
2013 2012 2012 Q/Q Y/Y
-------- -------- -------- ------ ------
Net revenue:(a)
Printing and Personal
Systems Group(b)
Personal Systems
Notebooks $ 4,128 $ 4,572 $ 4,942 (10%) (16%)
Desktops 3,321 3,369 3,206 (1%) 4%
Workstations 535 550 535 (3%) 0%
Other 220 236 209 (7%) 5%
-------- -------- --------
Total Personal
Systems 8,204 8,727 8,892 (6%) (8%)
-------- -------- --------
Printing
Supplies 3,893 4,007 4,079 (3%) (5%)
Commercial Hardware 1,354 1,482 1,489 (9%) (9%)
Consumer Hardware 679 591 690 15% (2%)
-------- -------- --------
Total Printing 5,926 6,080 6,258 (3%) (5%)
-------- -------- --------
Total Printing and
Personal Systems
Group 14,130 14,807 15,150 (5%) (7%)
-------- -------- --------
Enterprise Group
Industry Standard
Servers 2,994 3,137 3,072 (5%) (3%)
Technology Services 2,243 2,340 2,264 (4%) (1%)
Storage 833 946 955 (12%) (13%)
Networking 608 635 586 (4%) 4%
Business Critical
Systems 306 401 405 (24%) (24%)
-------- -------- --------
Total Enterprise
Group 6,984 7,459 7,282 (6%) (4%)
-------- -------- --------
Enterprise Services
Infrastructure
Technology
Outsourcing 3,736 3,924 3,980 (5%) (6%)
Application and
Business Services 2,183 2,428 2,391 (10%) (9%)
-------- -------- --------
Total Enterprise
Services 5,919 6,352 6,371 (7%) (7%)
-------- -------- --------
Software 926 1,171 946 (21%) (2%)
-------- -------- --------
HP Financial Services 957 966 950 (1%) 1%
-------- -------- --------
Corporate Investments 4 10 30 (60%) (87%)
-------- -------- --------
Total segments 28,920 30,765 30,729 (6%) (6%)
-------- -------- --------
Elimination of
intersegment net
revenue and other (561) (806) (693) (30%) (19%)
-------- -------- --------
Total HP consolidated
net revenue $ 28,359 $ 29,959 $ 30,036 (5%) (6%)
======== ======== ========
(a) HP has implemented certain organizational realignments. As a result of
these realignments, HP has re-evaluated its segment financial reporting
structure and, effective in the first quarter of fiscal 2013, created two
new financial reporting segments, the Enterprise Group segment and the
Enterprise Services segment, and eliminated two other financial reporting
segments, the Enterprise Servers, Storage and Networking ("ESSN") segment
and the Services segment. The Enterprise Group segment consists of the
business units within the former ESSN segment and most of the services
offerings of the Technology Services ("TS") business unit, which was
previously a part of the former Services segment. The Enterprise Services
segment consists of the Applications and Business Services ("ABS") and
Infrastructure Technology Outsourcing ("ITO") business units from the
former Services segment, along with the end-user workplace support
services business that was previously a part of the TS business unit.
Taking into account these changes, HP has the following seven financial
reporting segments: Personal Systems, Printing, the Enterprise Group,
Enterprise Services, Software, HP Financial Services and Corporate
Investments.
Also as a result of these realignments, the financial results of the
Personal Systems commercial products support business, which were
previously reported as part of the TS business unit, will now be reported
as part of the Other business unit within the Personal Systems segment,
and the financial results of the portion of the business intelligence
services business that had continued to be reported as part of the
Corporate Investments segment following the implementation of prior
realignment actions will now be reported as part of the ABS business
unit. In addition, the end-user workplace support services business,
which, as noted above, was previously a part of the TS business unit and
will now become a part of the Enterprise Services segment, will be
reported as part of the ITO business unit within that segment.
To provide improved visibility and comparability, HP has reflected these
changes to its reporting structure in prior financial reporting periods
on an as-if basis, which has resulted in the transfer of revenue and
operating profit among the Personal Systems, the Enterprise Group,
Enterprise Services and Corporate Investments segments. These changes had
no impact on the previously reported financial results for the Printing,
Software or HP Financial Services segments. In addition, none of these
changes impacted HP's previously reported consolidated net revenue,
earnings from operations, net earnings or net earnings per share.
(b) The Personal Systems segment and the Printing segment are structured
beneath a broader Printing and Personal Systems Group ("PPS"). While PPS
is not a financial reporting segment, HP provides financial data
aggregating the segments within it in order to provide a supplementary
view of its business.
HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
SEGMENT NON-GAAP OPERATING MARGIN SUMMARY DATA
(Unaudited)
Three months Change in Operating
ended Margin (pts)
------------ ----------------------
January 31,
2013 Q/Q Y/Y
------------ ---------- ----------
Non-GAAP operating margin:(a)
Personal Systems 2.7% (0.8 pts) (2.5 pts)
Printing 16.1% (1.4 pts) 3.9 pts
Printing and Personal Systems
Group(b) 8.3% (1.0 pts) 0.2 pts
Enterprise Group 15.5% (1.0 pts) (2.8 pts)
Enterprise Services 1.3% (5.4 pts) (1.0 pts)
Software 17.0% (10.2 pts) (0.1 pts)
HP Financial Services 10.6% (0.2 pts) 1.0 pts
Corporate Investments NM NM NM
Total segments 8.7% (2.3 pts) (0.7 pts)
Total HP consolidated non-GAAP
operating margin 7.9% (2.5 pts) (0.7 pts)
(a) HP has implemented certain organizational realignments. As a result of
these realignments, HP has re-evaluated its segment financial reporting
structure and, effective in the first quarter of fiscal 2013, created two
new financial reporting segments, the Enterprise Group segment and the
Enterprise Services segment, and eliminated two other financial reporting
segments, the Enterprise Servers, Storage and Networking ("ESSN") segment
and the Services segment. The Enterprise Group segment consists of the
business units within the former ESSN segment and most of the services
offerings of the Technology Services ("TS") business unit, which was
previously a part of the former Services segment. The Enterprise Services
segment consists of the Applications and Business Services ("ABS") and
Infrastructure Technology Outsourcing ("ITO") business units from the
former Services segment, along with the end-user workplace support
services business that was previously a part of the TS business unit.
Taking into account these changes, HP has the following seven financial
reporting segments: Personal Systems, Printing, the Enterprise Group,
Enterprise Services, Software, HP Financial Services and Corporate
Investments.
Also as a result of these realignments, the financial results of the
Personal Systems commercial products support business, which were
previously reported as part of the TS business unit, will now be reported
as part of the Other business unit within the Personal Systems segment,
and the financial results of the portion of the business intelligence
services business that had continued to be reported as part of the
Corporate Investments segment following the implementation of prior
realignment actions will now be reported as part of the ABS business unit.
In addition, the end-user workplace support services business, which, as
noted above, was previously a part of the TS business unit and will now
become a part of the Enterprise Services segment, will be reported as part
of the ITO business unit within that segment.
To provide improved visibility and comparability, HP has reflected these
changes to its reporting structure in prior financial reporting periods on
an as-if basis, which has resulted in the transfer of revenue and
operating profit among the Personal Systems, the Enterprise Group,
Enterprise Services and Corporate Investments segments. These changes had
no impact on the previously reported financial results for the Printing,
Software or HP Financial Services segments. In addition, none of these
changes impacted HP's previously reported consolidated net revenue,
earnings from operations, net earnings or net earnings per share.
(b) The Personal Systems segment and the Printing segment are structured
beneath a broader Printing and Personal Systems Group ("PPS"). While PPS
is not a financial reporting segment, HP provides financial data
aggregating the segments within it in order to provide a supplementary
view of its business.
HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
CALCULATION OF NET EARNINGS PER SHARE
(Unaudited)
(In millions except per share amounts)
Three months ended
---------------------------------------
January 31, October 31, January 31,
2013 2012 2012
------------ ------------ ------------
Numerator:
GAAP net earnings (loss) $ 1,232 $ (6,854) $ 1,468
============ ============ ============
Non-GAAP net earnings $ 1,605 $ 2,281 $ 1,832
============ ============ ============
Denominator:
Weighted-average shares used to
compute basic net earnings (loss)
per share and diluted net (loss)
per share 1,953 1,964 1,981
Dilutive effect of employee stock
plans 3 3 17
------------ ------------ ------------
Weighted-average shares used to
compute diluted net earnings
per share 1,956 1,967 1,998
============ ============ ============
GAAP net earnings (loss) per share:
Basic $ 0.63 $ (3.49) $ 0.74
Diluted(a) $ 0.63 $ (3.49) $ 0.73
Non-GAAP net earnings per share:
Basic $ 0.82 $ 1.16 $ 0.92
Diluted(b) $ 0.82 $ 1.16 $ 0.92
(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.
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HP Reports First Quarter 2013 Results
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